Small community hospital turnaround requires niche marketing - Turnaround Troubles, Turnaround Truths

Physician Executive, Sept-Oct, 2003 by Robert Aquino

A small community hospital surrounded by large tertiary care facilities must clearly have or develop a niche market in order to survive.

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It must have a clear and concise product line that provides customers (physicians and patients) with distinct advantages over going to larger, more modern and well-known hospitals.

The advantages are usually convenience, efficiency, a small, friendly home-like feeling, and privacy. Also, there is a perception of quality, secondary to having a reputation within a select group for excellence in certain procedures.

In addition, the ability of a small community hospital to compete financially against tertiary care institutions is well documented. Once a community hospital can generate good outcomes for specific procedures, it then becomes relatively easy to contract with managed care companies to these specific items. The profit margins can be significant once the parameters are established.

The most difficult part, of course, is determining these niche product lines, and proving their efficiency and profitability. Needless to say, marketing these lines i a considerable cost factor. And unfortunately, the turnaround process usually doesn't get started until after the facility has plenty of red ink on its books.

Physicians and patients

The initial steps require the identification of a new" product line or renewal of an existing one. This usually starts with the identification of key clients. In this case, it's best to start with the community physicians and community patients.

Dealing with the community physicians takes some serious one-on-one meetings to determine their needs and desires. Unfortunately, these are often not the same In addition, some good old fashioned due diligence will determine whether the needs of their practices will be supported by the patient base.

Often, established community practices need some modernization such as information systems, some new marketing and an office makeover to get the practice jumped started-again.

Usually, the physician wants to develop the practice into a different product line that is perceived to be more lucrative such as internal medicine into alternative medicine. The unfortunate part is when tim due diligence reveals a practice with less than 200 active lives.

No matter how well established, the practice would have minimal effect on a hospital's new product line. The practice should probably be incorporated into another group or be token over by a new physician just out of training.

Evaluating community patients requires a more strategic plan of whom the hospital intends to target. This may include a senior population, a working-class commercial population or an impoverished indigent population.

No matter who is targeted, remember that it takes a long time for patients to start using a new facility, even though they may be extremely unhappy where they are going.

Most patients, regardless of what they say, will continue to use their established facility, even after they have tried the new product at a new facility. The average time for change is usually about one year, even after several positive encounters at the new facility.

At your service

Patients arriving at a facility attempting a turnaround must be provided with services and convenience similar to a nice hotel. These include things like easy parking, a comfortable waiting area, well-run appointment schedules and a generally pleasant atmosphere.

One facility where an innovative vascular procedure was being offered failed because basic hotel services were not corrected.

Marketing and promotion

Facilities attempting turnarounds need to educate patients about their new product line. This can be through advertisements, lectures and testimonials. Going to meeting places of the target audience is also very effective.

It is imperative that only one new product line is promoted at a time and that all stakeholders support the move. In a hospital turnaround this includes administration, the board of directors and staff. The physicians and patients must be well-educated and constantly updated on the new product.

Promotion should begin prior to opening and continue throughout the first year.

Any problems or difficulties should be remedied immediately.

This is to prevent the patient or physician with a bad experience from being the "town crier" about their experience.

Address bad experiences and outcomes at once, inviting file individual back to demonstrate how their bad experience will never be repeated.

Finding a champ

One other critical ingredient for successfully launching a new product line is the selection and empowerment of a champion.

The champ is someone whose sole existence in the institution is to make the new product line work, improve and develop. This is not for the already overburdened administrator or medical director, but rather someone empowered to make decisions and changes based on the needs and success of the program.

It is someone with both the medical and administrative background to understand the product and also anticipate and solve the problems. This person must have their reputation and job on the line for this product's success.