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A Prognosis For The Future
Presented by:Karen W. Endresen, Ph.D.The Endresen Institute at The Jackson Organization
Healthcare Marketing:
Research Objectives
How important is the role of healthcare marketing?
On which customer segments are marketing activities focused?
How do healthcare marketing professionals spend their time?
How is “success” measured?
What does the future hold? What market conditions will impact our profession?
What can marketers do to be more effective in their organizations?
Methodology
Web-based survey
Healthcare marketing/strategy development professionals from across the United States
Conducted in Summer 2005
266 respondents
Who Responded?(n=266)
Hospital/ medical center32%
Hospital system
31%
Academic medical center14%
Consulting firm/
vendor11%
Other12%
Work setting: Number of hospital beds:
38%
35%
27%
0% 10% 20% 30% 40%
Morethan 450
250-450
Under250
Who Responded?(n=266)
Northeast23%
West19%
Southeast17%
Central (South and
North)10%
Midwest32%
Manager/Analyst/
Coordinator23%
CEO/ President/
Vice President
34%
Director42%
Are you located in: Is your position:
Increase in importance
84%
Stay the same13%
Decrease in importance
3%
In your opinion, is the IMPORTANCE of the role that
marketing/strategy development plays in the
healthcare industry in America:
In your organization (or your client’s), how do you think the
role of marketing strategy development will CHANGE in
the next 2-3 years? Will it:
Stay the same13%
Decreasing in importance
5%
Increasing in importance
81%
In your organization, how much do you focus on each
of the following:
36%
54%
64%
66%
71%
74%
76%
0% 20% 40% 60% 80% 100%
Board
Employees/Staff
Consumers at large
Primary care physicians
Specialty care physicians
Referring physicians
Patients and families
Major focus Minor focus Not a focus
How Has That Focus Changed?
54%
64%66%74%76%
34%
64%58%
62%
76%
0%
20%
40%
60%
80%
100%
Employees/StaffConsumers atlarge
Primary carephysicians
Referringphysicians
Patients andfamilies
2005 2002
Most Important Customer Segment
Of those, which segment is MOST important? (First Response)
1%
7%
7%
11%
18%
25%
31%
0% 10% 20% 30% 40% 50%
Board
Employees/Staff
Primary care physicians*
Specialty care physicians
Consumers at large
Referring physicians
Patients and families
NOTE: In 2002, respondents were only asked about “physicians” in general and where not asked about PCP and specialty care physicians individually.
How Have Segments Changed In Importance?
15%
29%
22%
32%
19% 18%
25%
31%
0%
10%
20%
30%
40%
50%
Staff Physicians Consumers atlarge
Referringphysicians
Patients andfamilies
2002 2005
High “Focus”Activities
How much are you expected to “focus” on each of the following activities?
58%
62%
69%
72%
73%
0% 20% 40% 60% 80% 100%
Developing successful advertisingPR programs
Growing revenue
Increasing selected service linemarket share
Increasing market share
Growing patient volume
Major focus Minor focus Not a focus
Moderate “Focus”Activities
How much are you expected to “focus” on each of the following activities?
41%
42%
45%
50%
57%
0% 20% 40% 60% 80% 100%
Improving patient satisfaction
Leading the strategic planningprocess
Reporting on progress towardstrategic objectives
Improving physician satisfaction
Defining the strategy for the "brand"
Major focus Minor focus Not a focus
Low “Focus”Activities
How much are you expected to “focus” on each of the following activities?
26%
29%
35%
39%
40%
0% 20% 40% 60% 80% 100%
Improving operatingmargin
Improving employeesatisfaction
Projecting future marketdemand
Developing/implementingnew businesslines/products
Improving preferenceratings by consumer
Major focus Minor focus Not a focus
Which two are most important in measuring success?
11%
11%
12%
18%
19%
23%
29%
31%
0% 10% 20% 30% 40%
Improving operating margin
Leading the strategic planning process
Defining the strategy for the "brand"
Increasing selected service line market share
Developing successful advertising PR programs
Growing revenue
Growing patient volume
Increasing market share
Two Responses
Performance Success Measures
Which of the following performance success measures are used consistently in evaluating the success of your marketing and
strategy development? (Percentage of “Yes” responses)
40%
43%
54%
57%
57%
64%
70%
78%
82%
85%
0% 20% 40% 60% 80% 100%
Internal Customer Satisfaction
Employee Satisfaction
Physician Satisfaction
Operating Margin
Return on Investment
Patient Satisfaction
Revenue Growth
Consumer Awareness
Patient Volume/Occupancy
Market Share
Expected Change in Measures of Success
Remain the same
16%
Change a lot
31%
Change a little53%
In the next 2-3 years, do you think your “measures of success” will:
Anticipated Changes in Market Success Measures
1%
36%
6%
7%
9%
10%
12%
21%
0% 10% 20% 30% 40%
Don't know
Other
Employee/consumer satisfaction improve
Physician/patient satisfaction improve
Metrics/increased quantification
Growth in volume/market share
ROI-greater emphasis
Measures of ROI-more specific/sophisticated
3% 3%
13%
11%12%
21%
19%
15%
2%1%
2%1%
6%
4%
14%
17%
30%
22%
5%
0%0%
10%
20%
30%
40%
[1] [2] [3] [4] [5] [6] [7] [8] [9] [10]
2002 average = 5.62005 average = 6.3
Evaluation of Organization Performance
Terrible, major improvement
needed
Absolutely outstanding, could not
be better
How would you rate your organization’s performance compared to others in your marketplace?
49%
49%
52%
55%
57%
0% 20% 40% 60% 80% 100%
Patient Satisfaction
Operating Margin
PatientVolume/Occupancy
EmployeeSatisfaction
Market Share
Higher About the same Lower
How would you rate your organization’s performance compared to others in your marketplace?
35%
37%
43%
44%
47%
0% 20% 40% 60% 80% 100%
Internal CustomerSatisfaction
PhysicianSatisfaction
Revenue Growth
ConsumerAwareness
Return onInvestment
Higher About the same Lower
Marketing and Strategy’s Influence on Market Dynamics
Market Dynamics
Major Influence
Minor Influence
No Influence
Demographic Issues such as the growth of the “baby boomer” population segment, longer life expectancy, increase in chronic care populations, lower retirement age and an increase in uninsured/underinsured patients
77% 20% 3%
Consumer Issues such as increased consumer involvement in healthcare decisions, improved access in healthcare info, “report cards” and published quality measures
75% 25% --
Physician Issues such as competition from physicians, physician shortages in key specialties, medical malpractice/legislation and disenchanted medical staff
64% 31% 5%
Technology Issues such as the use of electronic medical records, healthcare web sites and healthcare communications via the Internet
60% 38% 2%
Marketing and Strategy’s Influence on Market Dynamics
(Continued)
Market Dynamics
Major Influence
Minor Influence
No Influence
Innovation and Discovery Issues such as new less invasive treatments, the promise of genomics, new drugs and stem cell research
49% 41% 9%
Operational Issues such as lack of capital, pressure to reduce costs, demonstrating ROI and expansion/renovation costs
45% 47% 8%
Management Issues such as workforce shortage, low employee morale, lack of visionary leadership and constraints of being part of a “system”
40% 52% 8%
Which one will healthcare marketing impact MOST?
2%
2%
4%
7%
9%
17%
59%
0% 10% 20% 30% 40% 50% 60% 70%
OperationalIssues
Innovation andDiscovery Issues
ManagementIssues
Techology Issues
Physician Issues
DemograpicIssues
Consumer Issues
Which one will healthcare marketing impact LEAST?
3%
5%
9%
13%
16%
23%
31%
0% 10% 20% 30% 40%
Consumer Issues
Techology Issues
Physician Issues
DemograpicIssues
ManagementIssues
Innovation andDiscovery Issues
OperationalIssues
How can healthcare marketers be more effective?
58%
61%
70%
75%
0% 20% 40% 60% 80% 100%
Understanding the motivations andpreferences of the organization's
leadership
Developing better measures of successto demonstrate the value of healthcare
marketing and strategy
Making marketing strategic rather thanpurely tactical
Getting marketing and strategy to "havea seat" at the executive table
Very effective Somewhat effective Not very effective
How can healthcare marketers be more effective?
(Continued)
16%
48%
48%
52%
0% 20% 40% 60% 80% 100%
Creating more/better educational materials fornew healthcare marketers and strategists
Getting marketing and strategy more involved inoperations
Involving physician leaders in marketing andstrategy activities
Increasing emphasis on "true" marketing andstrategic activities and reducing current
emphasis on advertising/community relations
Very effective Somewhat effective Not very effective
Performance AnalysisWhat segments do you focus on?
% Major Focus
Segment Focus?High
PerformerLow
Performer Difference
Employee/Staff 67% 37% 30%
Board 43 27 16
Primary Care Physicians 72 59 13
Patients/Families 81 71 10
Performance AnalysisHow do you spend your time?
% Major Focus
Profession Activities?High
PerformerLow
Performer Difference
Defining the strategy for the brand 66% 46% 20%
Developing successful advertising/PR 62 51 11
Improve service line market share 72 63 9
Performance AnalysisHow do you measure success?
% Yes
Performance Measures?High
PerformerLow
Performer Difference
Employee Satisfaction 48 37 11
Physician Satisfaction 58 48 10
Revenue Growth 66 74 8
Performance AnalysisHow can marketers be more successful?
% Very Effective
Effective StrategiesHigh
PerformerLow
Performer Difference
Getting marketing and strategy to “have a seat” at the executive table
82% 66% 16%
Understanding the motivations and preferences of the leadership
64 50 14
Making marketing and strategy more strategic rather than tactical
76 63 13
Greatest Difference Between High and Low Performers
Research Items
Difference between High
and Low Performers
Focus on Employees/Staff 30%
Spend their time defining brand strategy 20
Think it is effective to get marketing to “have a seat” at the executive table
16
Making marketing and strategy more strategic rather than tactical
13
How Important is the role of marketing to the healthcare industry
in America
More than four out of five respondents say the importance of the role of marketing in American healthcare is increasing
84% say that healthcare marketing activities in their organization in the coming years will increase
WE ARE OPTIMISTIC ABOUT OUR FUTURE!
On which customer segments are marketing activities focused?
As in the previous research Patients/Families + Consumers are a “major focus” (76% and 64%) AND the proportion has remained exactly the same
Segments with increased focus since the previous study are:
• Employee/staff Up 20%
• Referring physicians Up 12%
• Staff physicians Up 8%
Consumers at large are less frequently selected as the most important segment (18% in 2005 compared to 29% in 2002)
How do healthcare marketers spend their time?
Top named activities are:
1. Growing patient volume
2. Increasing market share
3. Increasing selected service line market share
The most important “success” measures used in determining annual compensation are similar
1. Increasing market share
2. Growing patient volume
How do healthcare marketers evaluate their organization’s
performance
On a 10 point scale, the average performance rating was 6.3 or “Good”, up a statistically significant margin from the 5.6 rating obtained in 2002
A majority of respondents rate their organization’s performance as “Higher than their competitors” for market share, employee satisfaction, and patient volume
69% Know their net operating margin and 59% say it has increased from last year
How is “success” measured? What performance measures
are used consistently?
The most frequently and consistently used measures of success are:
– Market share (85%)– Patient volume/occupancy (82%)– Consumer awareness (78%)
Lowest on the list are:– Internal customer satisfaction (40%)– Employee satisfaction (43%)– Physician satisfaction (54%)
Two out of three respondents expect success measures to “change a little” (53%) or “a lot” (31%) – many in areas related to ROI and more sophisticated metrics
What does the future hold? How can healthcare marketers have a positive
impact given market dynamics?
Healthcare marketers will be most effected in responding to marketing dynamics related to consumer and demographic issues
They can expect to have little impact in responding to operational issues, management, and innovation/discovery issues
WE SHOULD SPEND OUR TIME WHERE WE CAN DO THE GREATEST GOOD
Budget Changes
59%
41%
41%
0% 20% 40% 60% 80% 100%
Compared to lastyear, has that netoperating margin:
In the comingyear, do you
anticipate thatyour marketing
budget will:
Compared to lastyear, has the
marketing budget:
Increased Stayed the same Decreased
