If you’re in business, you have competitors.
Whether you represent a hospital, health system, or multilocation practice, competing healthcare businesses are developing innovative business models—right now—and they’re targeting your market. What’s more, your highest revenue service lines are likely already facing stiff competition from all angles.
Even worse, the marketplace for virtually every type of healthcare service or product will predictably become dominated by a small handful of competitors. Take LASIK, for example. In the early days when LASIK first became available, most ophthalmologists took a “wait and see” approach. However, the savvier surgeons marketed aggressively early on, quickly generating millions of dollars of revenue, growing their marketing savvy and budgets, building their brands, and positioning their practices as “the place” to get LASIK.
After all, would you trust your own eyes to a surgeon who has done 20 surgeries, or another doctor who has done 2,000 surgeries? Most people choose the latter.
So, most ophthalmologists missed the opportunity entirely, and never caught up. Today, just as Pareto would have predicted, in virtually every US city, only two to three surgeons dominate the market, performing almost all the refractive surgeries.
For these reasons and more, it’s imperative to identify your unique selling propositions, review them, and revise them regularly to remain competitive.
More businesses are developing with innovative ways to disrupt the status quo and drive competition in healthcare. Identifying ways to enhance your business model and focus on relationship-building tactics with your healthcare consumers are crucial for maintaining your competitive edge.
To be successful now and into the future, you must anticipate competitive issues and develop a proactive strategy to stay ahead.
Several factors contribute to an increased quantity of marketing competitors. Each one affects the choices healthcare consumers make—especially as they continue to expect more.
Let’s take a look at a few of these factors in more detail:
Owning a profitable private healthcare practice is becoming more difficult every year. Avalere Health reports only 26.1% of new and young physicians choose private practice over more stable options like hospitals, health systems, or corporate entities. Why? One of the biggest reasons doctors choose employment over private practice is changes to reimbursement. In many cases, doctors are being paid more for the exact same service when they provide it through a hospital.
Larger companies with self-insured plans also leverage this advantage on private physicians, forcing them to deliver services at increasingly competitive (e.g., lower) rates to keep their business.
With increasing pressures from more competition fighting over a perpetually shrinking pie, aggressive marketing tactics almost always increase.
In this environment, regardless of the market or the industry, the businesses with the smartest healthcare SEO and digital marketing strategy, the strongest message, the most aggressive tactics, and the most unwavering commitment inevitably win.
Marketing is no longer ornamental in healthcare; it’s a necessity. Competition in healthcare has grown fierce as hospitals, health systems, pharmaceuticals, device manufacturers, health plans, direct-to-consumer brands, and even internet pure plays embrace traditional and digital marketing strategies more than ever before. And as marketing activity increases, so does the pressure to compete.
Whether you realize it or not, new brands are analyzing your business and creating innovative business models to address the unanswered needs of your healthcare consumers. You may already feel the dip in new patient counts and related income—or worry about a potential decline.
So, how can your brand stay competitive? The answer is twofold.
First, you need to analyze your competitive landscape, identify new business models that could affect patient volume and revenue, and learn how they’re marketing themselves. Second, you need to analyze your current business model, make realistic changes that meet the ever-changing demands of healthcare consumers, and promote your products and services online and across traditional media channels.
Marketing can not be viewed as a cost center. It must be viewed as a revenue center that can generate a positive, self-funding return on investment (ROI).
If you expand your definition of competition to include businesses and human traits that may influence a prospective healthcare consumer not to become your patient, the competitive playing field expands even more.
You would have to be Rip Van Winkle to be unaware of the pervasive direct-to-consumer marketing tactics from “Big Pharma.”
Ads from Johson & Johnson, Roche, Novartis, Merck, Bristol-Myers Squibb, AstraZeneca, Pfizer, GlaxoSmithKline, Eli Lilly, et al that promote everything from cholesterol medications to erectile dysfunction solutions have overwhelmed our eyes and ears through global advertising on television, streaming services, radio, internet, billboard, retail point-of-purchase displays, medical practices, and more.
These ads empower healthcare consumers in two very distinct ways:
SmileDirectClub, Candid, and Byte are perfect examples of manufacturer competition in healthcare. These brands regularly appear when searching for teeth straightening solutions or alternatives to Invisalign or other in-office orthodontia (e.g., braces).
Invisalign is a premium product that requires repeat in-office dental visits. In contrast, SmileDirectClub, Candid, and Byte offer convenient, at-home teeth straightening services at a fraction of the cost.
By listening to healthcare consumers and identifying their desire for more autonomy, faster access to care, and lower prices, they have single-handedly disrupted the teeth straightening market.
These innovative manufacturers also compete amongst themselves for consumer attention online through massive, sophisticated digital advertising campaigns that include paid search, paid social, and retargeting.
Whether or not healthcare professionals like to accept it, the reality is most consumers consider most healthcare to be elective (except perhaps for very serious illness or painful emergencies). This includes procedures that are covered by insurance and those that aren’t.
On the consumer’s list of desirable discretionary marketing priorities, healthcare services generally do not rank near the top of their list.
While obviously we are expanding the definition of competitors here, procrastination is a natural and predictable human response to dealing with life’s problems, hassles, and challenges. We tend to avoid, delay, and defer facing issues as long as possible, even though delaying often creates negative consequences.
Fear of pain is a significant non-traditional competitive factor because it inhibits proactive patient self-referral. In some professions that are frequently associated with pain (such as dentistry), this is unquestionably the most consistent obstacle to patients getting the care they need.
Multiple market forces inspire a more sophisticated and impressive marketing quality among hospitals, health systems, and other healthcare providers.
In the past, many healthcare professionals believed marketing was unprofessional and unethical, but as we’ve already alluded to, disruptors and innovators are changing the rules. Today, marketing is essential for tackling competition in healthcare and is a cornerstone of every successful business.
Embracing new ideas and developing new business models that include alternative methods for healthcare delivery will keep your business relevant.
Unless you’re willing to meet (or exceed) the rising expectations of today’s healthcare consumers, you will slowly (but surely) lose market share, consumers, and revenue.
Marketing is a fact of business life. And because the quantity of marketing competitors continually grows, the quality of marketing has matured, becoming more skillful and sophisticated as healthcare professionals work to differentiate their business from their competitors effectively.
Today, it’s nearly impossible for hospitals and health systems to remain competitive without a sophisticated website and active digital marketing programs, including paid search, paid social, SEO, programmatic display advertising, review management, and more. While some competitors may lag behind, others have often developed an impressive level of sophistication.
Before you can innovate for your hospital or health system, you need to understand the market forces that affect it. How? By conducting a thorough competitive analysis for every marketing branch (e.g., brand and creative, SEO, paid search, and paid social) and identifying how your brand can evolve to meet the changing expectations of your healthcare consumers.
There are many ways to compile good research on your competition. For details, review the competition section of What Is a Marketing Plan?
Grow Patient Volume With Innovative Ideas That Disrupt the Status Quo and Attract New Healthcare Consumers With Sophisticated Marketing Strategies
Today’s healthcare consumers expect more. They’re willing to chase innovative businesses that deliver the patient experience they’re looking for—one that offers affordable, fast, frictionless access to high-quality healthcare.
One of the consumer behavior models I speak about a lot is the diffusion of innovations. Essentially, when new technologies first arise (think electric vehicles), the first consumers to embrace the new product or service are called “innovators,” and they are followed soon by “early adopters.” These two groups tend to be younger, more educated and wealthier than average. They will also become the trend setters. Companies (like Tesla) that make the right strategic decisions, appeal to consumers, and survive the high-risk early days can build brand dominance, huge profits and unshakeable competitive advantages.
Later, as the new technology becomes more common, the “early majority” and “late majority” consumers will enter the marketplace. During these phases, you can expect an economic “shake out,” when a handful of winning competitors will emerge to monopolize the market, while the losers will predictably fall by the wayside.
By the time the “laggards” finally enter the marketplace, the most profitable business opportunities will have long passed. That is of course, until a new disruptive technology appears. Note, these predictable cycles are accelerating in industry after industry, including healthcare.
Note: if you’re not innovating your marketing strategy, product, or business model to meet the changing expectations of your consumers, you’re not just risking losing market share to competitors—you’re jeopardizing the very viability of your business.