New School Marketing Shifts that Boost Service Line Profitability

January 1, 2015

Stewart Gandolfby Stewart Gandolf

Clinical service department profitability is a constant challenge for hospitals. That’s nothing new. What’s changed, however, is just about everything else.

The newly empowered patient now regards medical services with the critical eye of a retail shopper. The dynamics of health care reform, facility mergers and acquisitions and increasingly intense competition have business savvy CEOs and marketing pros laser-focused on Return-on-Investment (ROI).

Change is so rapid and pervasive that relatively recent marketing goals, strategies and tactics are being challenged as “old school.” One course—usually the longer path—is to create a completely new service line and seek payback over the long term.

But for most hospitals, the more natural starting point is to apply fresh thinking to the process of attracting patients to departments that already harbor the widest appeal, best margins and maximum profitability.

Traditionally, service departments representing the best business opportunities include cardiovascular, general surgery and orthopedics. And, depending on market dynamics, geriatrics, neurosurgery, urology, PCP/FP, oncology and others have demonstrated business strength.

Shifting to a new course for greater success

Hospital executives understand that being the generic medical commodity in a community—being all things to everyone—is no strategy at all. Specific services differentiate hospitals in the mind of the public and lay claim to a competitive advantage in the marketplace.

style=”padding-left: 30px;”>An innovative model is service line marketing to keep patients out of the hospital. Promoting “wellness” appears counterintuitive to “filling beds.” But with revenue increasingly tied to prevention, traditional service department marketing, and the spectrum of care, take on a new starting point.

This new school model embraces wellness, prevention and lifestyle. The Kaiser Permanente Thrive program has become a system-wide, wellness-driven theme that appeals to health-aware, proactive patients and employers who appreciate that prevention trumps catastrophic care.

The Thrive campaign and others like it engage patients through promotions such as health screenings, nutrition, education and prevention. This extends the patient care continuum, creates trust for later clinical needs, and shifts from episodic, transactional encounters to a relationship-based environment.

The nation’s health care delivery system continues to reinvent itself, and to be successful, hospital marketing plans need to regularly evaluate new “new school” concepts that grow your most profitable service departments.

Stewart Gandolf, MBA, is the CEO and Co-Founder of Healthcare Success Strategies, a national health care consulting and marketing company. Stewart has written for dozens of leading health care publications and has spoken at hundreds of venues on various topics including marketing strategies, patient experience, and reputation management. Additionally, Stewart has personally consulted for over 1,500 hospitals and practices. (800) 656-0907.