The Children’s Hospital of Philadelphia (CHOP) is a children’s surgical and general medical facility. The third best children’s hospital, and the in pediatric specialties, it is ranked 10 th nationally. Furthermore, CHOP is a teaching hospital. Also, it is one of the oldest and largest children's hospitals globally and the first hospital in the US dedicated to children’s healthcare. CHOP is located close to the University of Pennsylvania, and some of its employees serve as pediatrics at the University of Pennsylvania. It has approximately 527 beds ( Children's Hospital of Philadelphia, 2019) . About 40% of the beds are allocated to pediatric, neonatal, and cardiac intensive care ( Children's Hospital of Philadelphia, 2019) . Annually, it serves about 1.1 million children in the outpatient and emergency departments while it admits more than 28000 children ( Children's Hospital of Philadelphia, 2019) . It is essential to describe the characteristics of CHOP’s clients, analyze its competitive environment, marketing mix, and the best possible pricing strategy for one of the products/services offered at the hospital.
Methodology
The research paper will critically analyze and collect information from peer-reviewed articles and healthcare provider websites.
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Key Characteristics of Users and Program
One of the products offered by CHOP is Children Life Services. The program was launched in 1951, and it was one of the first programs in the country to recognize the therapeutic value and importance of play especially hospitalized children. It is one of the biggest programs in the US dedicated to hospitalized children. Additionally, it has about 60 employees dedicated as Child Activity Coordinators or Certified Child Life Specialists ( Children's Hospital of Philadelphia, 2019) . CHOP recognizes the significance of children’s growth and development as well as the effect of disability, illness, or injury on children. Notably, the users of the product are children and their families. The staff is dedicated to assisting families, and their children cope with disability, illness, and injury through various techniques:
Offering age appropriate play that allows expression, mastery, and coping with feelings for both patients and their siblings.
Developing and encouraging supportive relationships between family members and patients.
Improving familiarity with the hospital’s environment and preparing families and children for medical experiences.
Bridging the gap between homes and hospital by offering familiar activities such as holiday observations, play, and birthdays.
Providing orientation to new activities and procedure, such as having surgical procedures or being admitted to the ICU.
Also, they offer support and leisure education for community re-entry.
Furthermore, the program works with the healthcare team and family to minimize or reduce the stress of an outpatient or hospital visit while achieving healthcare goals.
Competitive Environment
Be it invading a rival’s turf, luring away patients, or recruiting a specialist working for a competitor, competition in the region’s pediatric hospital is quite intense ( George, 2012) . Philadelphia is the only city with at least three major pediatric hospitals: Temple University Children’s Medical Center, CHOP, and St. Christopher’s Hospital for Children ( George, 2012) . Wilmington’s Alfred DuPont Hospital for Children is also located in the region. Therefore, there are four pediatric hospitals with the same target market. However, two of the hospitals are barely profitable or are in the red while the other two are in good health. There is strong competition in the region that has not occurred in other regions. The competition has various advantages and disadvantages. It has offered consumers a greater number of healthcare providers who are closer to home and providers are keen to provide the best services ( George, 2012) . On the other hand, hospitals are spending a lot of resources marketing their services and products.
One of the primary concerns in healthcare is the rising costs. CHOP should consider offering high-quality care at affordable prices. Furthermore, most hospitals in the regions are struggling with high labor costs. CHOP should ensure they increase their market share so that they will collect more revenues and earn more profit to cope with the high labor costs ( George, 2012) . Additionally, CHOP's services should not only end after patients leave the hospital. They can offer to follow up activities that will improve service delivery while building stronger relationships with patients.
Tools of Marketing Mix
Price
Due to the high healthcare costs in the US, price is an issue of concern among most patients especially with families that may not have comprehensive health insurance packages. CHOP should consider more opportunities where they can offer world-class care at the most affordable/lowest price. Additionally, they can offer some simple tests free of charges such as cholesterol tests and blood pressure checks ( Hanks, 2018) .
Place
Essential healthcare services, regardless of their price, should be available to CHOP’s patients efficiently. If the services are only accessible during hours or locations that are not available to patients, they patients will be at risk and healthcare service providers will miss out on the chance to treat them ( Hanks, 2018) . CHOP should consider same-day appointments, seeking out new locations, or expanding office hours, and partner with local communities to improve access to healthcare services.
Product
An office visit is only one of the components of healthcare services that CHOP provides. The hospital must offer products that will enhance the patients’ quality of life. Additionally, they must modify their services so that they can meet the needs of each child instead of the common ‘one size fits all’ practice in most hospitals ( Hanks, 2018) .
Promotion
Although they are one of the best children’s hospitals globally, promotion still plays a vital role in the marketing mix. They still have the potential for growth locally and globally ( Hanks, 2018) . Furthermore, it is essential to advertise their services and improve public relations while improving customer relationships with existing customers.
Pricing Strategies
Achieving both quality outcomes and healthy margins requires an effective pricing strategy that addresses daily operational concerns. Reducing the variation of both processes for common services and products is highly likely to deliver high quality and sustainable healthcare for patients ( Downie, 2017) . Some of the strategies include:
Providing patients with potential estimates before providing services. There should be an effective cost analysis and price modeling that will address patients’ needs ( Workinger, 2015) . Families need to plan so that they can afford some healthcare services.
Having a logical price structure. CHOP should evaluate the financial impacts of the prices of all healthcare services. They should critically analyze the relationship between the cost of providing services and charges, in addition to mark-ups ( Workinger, 2015) .
Making prices understandable and visible. CHOP should educate families on all care components in all healthcare procedures and their associated prices.
Understanding the cost of providing services. Although it is challenging, CHOP should identify the real and actual costs of providing care. Revenue cycle and supply chain teams should work together to evaluate pricing, reimbursement strategies, and payer contracts ( Workinger, 2015) . Understanding the real costs will assist the hospital in determining healthcare costs.
Establishing proactive processes that will maintain healthy margins. The hospital should leverage employees who are trained to identify compliance and margin risks by service lines and payers ( Workinger, 2015) . Other than using the market prices, CHOP should have internal mechanisms that ensure they offer high-quality services at a lower price than the market price to ensure they have a competitive advantage over its rivals ( Downie, 2017) .
Conclusion
The research paper has described the characteristics of CHOP’s clients; analyze its competitive environment, marketing mix, and the best possible pricing strategy for one of the products/services offered at the hospital. Price setting in the healthcare industry is an essential activity as hospital management systems seek to face the eroding margins caused by government payer inadequacies and cost increases. Finally, because of the high competition in the region, CHOP should consider the tools of marketing mix and pricing strategies highlighted in the research paper to improve their market share.
References
Children's Hospital of Philadelphia. (2019). Retrieved from https://www.chop.edu/#
Downie, J. (2017). More than just activity: pricing and funding for quality and safety.
George, J. (2012). Competing for kids. Retrieved from https://www.bizjournals.com/philadelphia/stories/2002/05/06/story3.html
Hanks, G. (2018). How to Implement the 4 P's of Marketing in Healthcare. Retrieved from https://smallbusiness.chron.com/implement-4-ps-marketing-healthcare-68980.html
Workinger, B. (2015). Five keys to hospital pricing: Achieving both healthy margin and quality outcomes require connecting pricing strategy with daily operational concerns. Retrieved from https://www.beckershospitalreview.com/finance/5-keys-to-hospital-pricing.html
