Keeping rural patients 'home' needs broad physician-hospital marketing plan

Physician Compensation Report, August, 2003

Rural physicians, especially specialists, who want their patients to stay interested in getting care near home rather than going to big cities or suburban areas must join with local hospital administrators--who often have the same concerns--and develop a comprehensive strategy to keep patients "home," says a leading health care marketing consultant.

Adrian Percy of Percy & Co. in Baton Rouge, La., explains that because hospitals in rural areas often fill more health care functions (such as main supplier of many key ancillaries) than they do in suburban or urban areas, rural and small-city physicians must work with hospital administrators on new marketing plans when both are concerned about the loss of patients to providers in more populated areas.

While most applicable in rural areas, Percy contends that the following strategic and marketing ideas are applicable anywhere, including suburbs and cities, to rejuvenate a hospital and its affiliated medical practices. Percy's firm serves hospitals and their medical-staff groups mainly in Louisiana and Florida.

If a rural area loses its hospital, physicians there will find it difficult to hold on to patients for purposes other than primary care, he explains, because patients having more sophisticated needs will view the physician as having limited capabilities. Losing a hospital is a real possibility, he adds, citing eight to 10 closures over the last 10 or 15 years in the rural parishes (counties) surrounding Baton Rouge. Hospitals in all locations have lower profit margins today than they had in the mid-1990s.

In general, Percy says, hospitals with fewer than about 150 beds can have a difficult time holding onto their local patients in today's business environment--and physicians who serve those hospitals lose patients as well. Such hospitals need strong marketing plans, he contends.

The costs of putting together such plans usually are borne by the hospitals, he notes. For physicians, the main "costs" are time and a willingness to work creatively with hospital managers and bury old disagreements that often stand between the doctors and the managers.

The basic outline of such marketing plans usually involve at least four main targets, Percy says:

* Physical plant improvements to give the hospital up-to-date capabilities and looks. This is the most expensive part by far of implementing the marketing initiative.

* Service-line expansions and strategic plans to assure that each service line pulls in substantial revenues.

* Physician relationships with hospital administrators focused on keeping local patients "home."

* Fostering a consumer image of substantial local health care capabilities so that the convenience factor takes over and draws patients back in.

The specific methods of addressing these targets vary from one locale to another, but often are surprisingly similar for different rural areas, Percy adds.

Doctor, Consumer Views Polled

St. Ann's General Hospital, a 126-bed institution serving Raceland and Matthews, La., in LaFourche Parish, was losing money and market share several years ago, Percy says. Share was slipping away to two other hospitals, both about 15 miles away--one in Houma, La., and the other in Thibodaux, La. Patients in Raceland and Matthews also can travel to New Orleans, about 40 minutes away across marshland. Percy assisted St. Ann's in addressing the problems.

Only about 25 physicians had been primarily attached to St. Ann's. The only cardiology group in town was acquired a few years ago by another cardiology group that was allied with the hospital in Houma. Following the acquisition, the St. Ann's cardiologists directed much of their "cath lab" work--about 30 cases a month, the source of significant hospital revenues--to the Houma hospital. This was a huge loss for St. Ann's. Some time later, the same cardiology group acquired a four-physician family practice that traditionally had used St. Ann's for hospital needs.

Percy says that he and hospital managers had talks ranging from a half hour to two hours with each of the 25 physicians who had used mainly St. Ann's. "Basically we asked, 'Do you want to keep this hospital?'" he recalls. All answered yes, although some were not pleased with the hospital administrators.

Percy also surveyed consumers in St. Ann's service area. "Everyone wanted St. Ann's for ER and primary care," he says, but had come to think of the hospitals in Thibodaux and Houma as "larger, more high-tech, safer and just plain better than St. Ann's."

The loss of consumer confidence is particularly troubling when it results in the loss of employed patients with health insurance, he notes. If a payer drops a hospital from its preferred-provider list, some of the best revenue streams are lost.

Three-Part Solution Needed

To address the loss of cardiology work, the administrators sat down with the Houma cardiology group and asked whether it was essential to direct patients living near St. Ann's to drive to Houma for cath lab work. Both sides were amenable to accommodations that returned much of the work to St. Ann's, Percy says. Physicians and patients prefer the new arrangement because it saves them substantial driving time, he notes.