The Price Water Coopers report on the state of the healthcare industry in the US published in 2017 posited that players in the industry are faced times of uncertainty and opportunity. The scenario is not restricted to the US as healthcare industries worldwide have spent considerable time adapting to affordable health care, amidst challenges in shifting to the much needed value-based care. As a result, traditional healthcare organizations and new entrants face the challenge of responding to the shift in care paradigms. According to PWC report (2017), adapting, innovating, and building new programs and strategies are the three main tactics organizations in the industry are using to address the shift to value-based care. However, progress is limited by the evident absence of competition.
According to a study by Dafny and Lee (2016) on the state of America’s healthcare, the number of Americans with access to healthcare has risen tremendously compared to previous years courtesy of the Affordable Care Act. The downside of these developments is that the quality of care remains wanting because the healthcare systems continue to be chaotic, inefficient, unreliable, and exorbitantly expensive. A diverse array of solutions has been proposed towards the improvement of the industry, but Dafny and Lee (2016) argued that what the industry needs more is competition. Competition has been proven to improve quality and efficiency, spur innovation, and drastically reduce costs in other economic sectors, and the healthcare industry is no exception. Nevertheless, new entrants and alternative care providers face the biggest challenge in unsettling the established status quo as traditional players in the industry have opted to blunt completion through consolidating as reports have indicated a significant rise in the number of hospital mergers in the US over the past decade.
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This paper proposes marketing as the most relevant approach for surmounting the challenges and meeting the needs of the modern healthcare industry, and links organizational structure and plan to marketing, through evaluation of their capacity meet the new demands of the healthcare industry. The critical aspects of marketing in the healthcare industry are examined in Berkowitz (2016) where the variables that are central to the transition in healthcare present marketers with both opportunity and challenges. The most significant variables are the evolution of healthcare from a fee-for-service payment system to a model where transparency, quality outcomes, and patient satisfaction are key; and the rise of the empowered consumer. The changes have not only transformed the role of physicians but also affect the “how” and “who” of healthcare marketing strategies. However, the most notable aspect is the shift in decision-making power, which is influenced by the following trends: doctors becoming employees hence losing their status as final decision makers; consumers becoming avid researchers; the rise of targeted marketing; the new possibility from digital marketing compared to traditional channels; and the increased role of digital content in the decision process (Berkowitz, 2016; Lockard, 2017). This paper explores how an organization can employ marketing in its organizational structure and plan to meet the changing needs of consumers in the healthcare industry to achieve competitiveness through value-based care.
Strategic Placement in the Marketplace – Marketing Paradigms
The healthcare industry is both a service and production industry comprising of diagnostic, preventive, remedial, and therapeutic services offered by doctors, nurses, hospitals, and other public, private, and not for profit organizations; insurance firms, medical equipment, and pharmaceuticals. Like in any industry, packaging, and presentation of these services and products can make or break an organization’s placement in the marketplace. According to Lefebvre (2011), social marketing has been central to the evolution of healthcare marketing in the developed and developing countries. However, the approaches to social marketing in the two settings differ in that in developing countries; emphasis is placed on products and services with a concomitant interest in pricing and distribution; while in the developed countries, persuasive communications encouraging behavior change is the main discourse. As a result, theory and practice encounter challenges in achieving equity, regulating the influence of social networks on behavior, sustainability, and critical marketing, scalability, and the need for comprehensive programs. This paper identifies and discusses the main marketing approaches that shape marketing trends in the healthcare industry that can be adopted by respective organizations.
Professional Referrals
The main difference between marketing products and services is that the former is tangible while the latter is intangible. This is the challenge faced by professional service marketers and healthcare organizations offering professional services to patients, health care providers, and other systems within the health sector (Tovian, 2014). As a result, many specialty providers are heavily dependent on the continuous stream of inbound patients referred from other service providers in the industry. An organization cannot take these referrals whether primary or secondary for granted. The referrals do not happen by chance and to succeed in this frontier a well-written plan and an unfailing system for retaining and growing the flow of professional referrals is mandatory. According to Halinen and Jaakkola (2012), the objective of professional marketing is to create a value-based framework that fosters service delivery through relationships. It can also be employed to influence internal marketing. Value creation framework such as the one illustrated below can be adopted for marketing purposes.
Figure 1: Value creation framework for professional services marketing (Halinen & Jaakkola, 2012, p. 225)
Internet Marketing
Internet marketing captures the role of technology and information systems in transforming consumer decision-making process. Online marketing is the mainstream channel through which players in the healthcare industry are gaining milestones in bringing their services and products closer to the consumers. How an organization uses the digital muscle can offer effectiveness and profitability or results to a waste of resources in time and money. Therefore, it is important for players in the healthcare industry to understand the trends in online marketing to ensure they yield maximum benefits through the use of relevant and effective platforms.
The most critical aspect of online marketing highlighted in Berkowitz (2016) is the place of patients as informed consumers and buyers of healthcare services and products. It is important for an organization to understand that the battle for new patients precedes the first phone call for an appointment. The internet is a database of information on diverse healthcare issues and consumers are becoming firm drivers of the decision-making process. They no longer blindly accept what the doctor recommends. Through the internet, consumers of services and products for the healthcare industry can research about health information including information on doctors and other health services providers, hospitals and other medical facilities, medical conditions, treatment options, and dozens more of considerations. Today’s patient holds more power because decisions about treatment and the choice of the physician or health facility are highly influenced by their research. An organization needs to be strategic in ensuring that it channels online traffic to sites that marker its services and products to ascertain relevant information consumed by the target market.
There are a number of internet marketing strategies that can be used by an organization to disseminate relevant information to consumers. Websites, patient portals, social media tools, mobile applications, can all be used to strategically place a company on the market. While these platforms have proven convenient for real-time customer conversations and relationships, an organization must innovate on how it can use them to market itself. The internet also accords the organization the opportunity to use smart content that is authoritative, interesting and thus share-worthy. In the wake of competition for patients’ attention by players in the industry, an organization must earn respect and build trust through online content that is fresh, reliable, and social-sharable, implying that information on new options for prevention, diagnosis, treatment, and management of specific conditions must be made available to the patients.
The internet also presents an organization with the opportunity to personalize or individualize the content in response to the sophisticated marketing delivery systems where the public is shunning broad brush advertising for contemporary marketing approaches that identify their interest, and deliver personalized and relevant content timely on a one-on-one basis. Approaches such as retargeting can be used to display ads for consumers who show interest in the organization’s website. In addition, a digital marketing automation can be used for data mining purposes in creating a user profile with relevant and personalized messaging to generate more interest and response. While undertaking these plans, it is crucial to prioritize the mobile screen first as optimizing for mobile is gaining significance as the new universal bar. The advantage of the internet is that it allows for catering to the unique needs of every consumer. For instance, videos can be used to deliver messages in an authoritative manner compared to texts, and programmatic video for playing targeted content at the most appropriate time. Exploration of telemedicine options is also of paramount importance in increasing efficiency, profitability, and brand differentiation.
Branding
An organization in the healthcare industry must have a strategy for telling its story. According to Kemp, Jillapalli, and Becerra (2014), “brands can imbue unique meaning to consumers, and such meaning and personal experience with a brand can create an emotional connection and relationship between the consumer and the brand” (p. 126). This approach is especially important given that healthcare service is highly of intimate experience implying that emotions are integral to the process of decision making. Establishing effective commitment in consumer brand relationships in the healthcare settings requires the development of trust, referent influence, and corporate social responsibility (Kemp, Jillapalli, & Becerra, 2014). These elements allow the organization to stand out from competitors in a positive way, including in all other undertakings. The reputation of an organization is founded on a powerful differentiating brand for its business model. Therefore, an organization can only ensure meaningful and effective branding through deliberate effort to shape and convey the message at the appropriate time.
The competitive nature of the healthcare industry has seen the impact of hospital brand image on attitudes and behavior of patients became of immense significance. According to Wu (2011), hospital brand image has become central to the enhancement of service quality, customer satisfaction, and customer loyalty. Nevertheless, Berkowitz (2016) recognized the important role of the marketing mix in advancing an organization’s brand. An organization must have a product strategy depending on the class of products it deals in, a pricing strategy that emphasizes of transparency, a distribution strategy for accessibility of services and products, and a promotion strategy that should maximize on the opportunities presented by the internet. While branding products may be less stressful, the same cannot be said where services are concerned. Therefore, it is imperative that the marketing mix captures the key characteristics that separate services from products, namely: intangibility, inconsistency, inseparability, and inventory, to facilitate the design of effective marketing models.
Public Relations
“Patient time is equally valuable as doctor’s time” is a phrase that may be used to summarize the importance of public relations in healthcare marketing. Competitiveness in the patient-centric world is highly dependent on convenience, not just in appointments and waiting rooms, but also in access to information about products and services. A study by Alrubaiee and Alkaa'ida (2011) established that patient perception of service quality was positively correlated with patient satisfaction and patient trust, implying that planning and generating healthcare publicity can have positive and powerful influence.
However, public relations can also be employed in understanding the consumers of healthcare services and products, especially relating to decision making. The role of digital content in the decision process is highlighted in Berkowitz (2016) and Lockard (2017) in reference to where consumers visit before making an appointment. General online searches and visits to hospital sites dominated, while others used insurance firms’ sites, health information sites, and consumer-generated reviews. An organization can enter into a pact with hospitals or insurance firms with the objective to publish its content on the sites of the respective partners.
Conclusion
The healthcare industry is facing a difficult challenge because of the competitive nature of players involved. As the need for affordable care grows, so does the need for value-based services. However, new entrants into the healthcare industry face the obstacle that is traditional established players that have strategically collaborated to lock out any potential competition. Cutting a niche in the market for such new organizations requires market research on what works and what does not. Evidence shows that players in the health sector need to align their strategies with those of other economic sectors to realize intended outcomes. One such strategy is marketing of healthcare services and products using approaches such as professional referrals, internet marketing, branding, and public relations. The implications for success seeking healthcare organizations is that they need to decipher which approach works best for the category of service of product they offer. This means further research to ascertain the effectiveness of their proposed marketing model while taking into consideration other factors such as legal parameters, cultural diversity, and settings in which they are to operate. Such comprehensive strategies are necessary to survive in the highly competitive industry where consumers are increasingly becoming central to decision making, and players in the industry are forced to deal with them directly rather than through doctors as was the case before.
References
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