Health Care Marketing: How Are Things Different For Health Care Organizations?

By Stewart Gandolf
Chief Executive Officer

blue marketing binderIn many respects, marketing a health care organization or practice is not substantially different from marketing a small business in other industries.

Basic business marketing principles that apply in other industries – including market and competitive research, strategic planning, budgeting, positioning, branding, marketing strategies, tactics, media options, public relations opportunities, implementation processes, tracking processes – also apply in the hospital, health care organization and private practice segment.

However, there are several ways – some subtle and some obvious – that marketing a health care practice is approached differently than marketing for other businesses and industries.

Most owners of health care businesses typically have little (if any) business training, education or experience prior to owning their first private healthcare company. In fact, most health care business owners – and their employees – prefer to view their establishment as a calling, a career, a profession, anything but a business.

The interests that draw people to a career in health care are typically different from (and often the polar opposite to) the interests that draw others toward a career in business.This dynamic often creates the unfortunate but predictable irony that results in a business owner who is ill prepared, ill equipped and often uninterested in the basic requirements of business success.

Because they never learned business and marketing principles, strategies and tactics in their healthcare training curriculum, these business owners are usually at a distinct disadvantage from the very beginning of their business ownership. They are forced to struggle through the process of trial-and-painful-error to compensate for their lack of business training and knowledge.It’s hard enough to succeed in business when you know what you are supposed to do. It’s doubly tough when you don’t even know what you don’t know.

Health care practitioners have a greater concern for their reputation with colleagues (who are also often competitors). Try to imagine another industry where competitors are more concerned with not offending each other than they are with attracting customers.

Granted, for many referral-based health care specialists, their colleagues are their primary customers. However, the concerns that most healthcare providers hold for their standing in the eyes of their colleagues extends in many cases to direct competitors as much as to referral sources.These practitioners frequently express the concern that if they market their business, their colleagues will think they are struggling and desperate.

This is a particularly common concern among more mature providers who started practice before healthcare marketing was as common and prevalent as it is today.What these practitioners usually do not realize is that there are many professional and ethical methods, strategies and tactics that can be successfully employed in a way that does not damage their reputation among their colleagues. In fact, they may be surprised that they are able to enhance their reputation with colleagues by utilizing the proper approach.

Health care organizations have to conform to (or at least respect) marketing and advertising guidelines imposed by their state licensing boards. While state licensing boards cannot legally prohibit healthcare business owners from marketing their services, they can and do often establish restrictive guidelines that they apply to marketing and advertising in private practice.

Many health care practitioners are understandably intimidated by the power of these boards to sanction and penalize them for violations of these guidelines, so they tend to avoid marketing altogether – losing out on all of the positive benefits that effective and ethical marketing has to offer. While each profession and each state establishes its own regulations, when you study the fine print of most of these marketing and advertising guidelines, you will find that they simply restrict or prohibit the most fundamental of illegal or unethical practices.

In essence, you should not present anything in your marketing that is not true or attempts to mislead and/or misinform the public and you should not directly disparage a professional colleague/competitor. The most difficult guideline often imposed by many boards is that you should not state anything in your marketing that makes you appear better than your colleagues. When this guideline is present in a state board’s regulations, it presents a more difficult situation, which is why this restriction is the basis of most complaints, disputes and legal claims related to marketing and advertising by professionals.

The essence of marketing is representing why you believe (and can honestly represent) that you are the preferred/best choice for your desired audience. It is often difficult to make this argument without creating the impression of at least inferred comparisons. While there is no attempt here to represent legal advice or opinion, it is common for most successful marketers in health care to avoid problems by concentrating on promoting what they can honestly represent that they offer, do well and have experience in providing. Ultimately, each practitioner is responsible for interpreting and abiding by the regulations of their licensing board.

In many health care professions and specialties, health care businesses must conform to Medicare and other health care insurance guidelines that limit their ability to offer special pricing discounts and related special offers to their customers. Because we have all been conditioned to expect a lot of “hype” and inflated, exaggerated claims in advertising, marketers in many industries use introductory offers to give new customers a low-risk way to “test the waters” with a new company, product or service and be encouraged to give the new business a chance to impress them with the quality of their offerings.

In healthcare, introductory offers to new patients are more common now than in the past, but still less commonly used than in other industries for reasons both legal and psychological. In medical practices, for example, there are legal restrictions related to Medicare rules. In essence, you are prohibited from offering price discounts or price waivers to any patient on co-payments for any health care service that is covered by Medicare – regardless of whether or not the patient is Medicare-eligible.

However, some health care services that are provided at no charge with no associated insurance billings that are offered as a public service, such as periodic free blood pressure screenings, cholesterol screenings, free educational seminars, etc. are normally legally allowed.

For elective, cash-pay health care services that are not covered by insurance, introductory offers are more common. For example, many plastic and cosmetic surgeons will offer complimentary (free) consultations to prospective cosmetic surgery patients. Some practices offering non-insured services will also advertise special pricing offers on their services.

Irrespective of legal considerations, many health care practice owners have a psychological barrier against making introductory offers to prospective new patients or special offers to established patients for special promotions. Many practitioners believe that this type of promotion is unprofessional and positions them to appear as a low-quality discount service to their patients and colleagues.

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Unlike in other industries, most health care business owners are conditioned and/or inclined to view the fundamental business enterprise of marketing as inappropriate, distasteful, undesirable and even unethical. This attitude and perception is ingrained in most health care professionals from the time they first enter a health care provider career track. It goes to the heart of the motivations and self-perceptions that draw most people toward a career as a health care provider.

These natural perceptions and inclinations are then further reinforced during the clinical training curriculum.As a result, the competitive “playing field” for marketing has been left wide open for the relatively few entrepreneurial practitioners who either never shared these attitudes or got over it at some point in their professional careers.

The irony here is two-fold: a) it has been easier for healthcare practices to be successful in marketing than in almost any other small business environment because so few competitors really engage seriously in the competitive arena; and b) some of the more ambitious entrepreneurs who have enjoyed great personal success in their practice are not considered by their colleagues to be the best or most skilled clinical providers – simply the best marketers.

The practical reality of clinical care is that most patients cannot judge the quality of clinical care unless it’s really bad and/or painful. Patients generally assume most providers to be of roughly equal quality or you wouldn’t have a license to practice.It’s up to the provider to make a compelling positive case for differentiation and to prove their claims with the quality of the care provided. That’s marketing.

Note: We are not representing ourselves as legal advisors or offering legal counsel or opinion. If in doubt, you should check with the appropriate regulatory agencies prior before making any non-standard offerings to the public.

Stewart Gandolf
Chief Executive Officer at Healthcare Success
Stewart Gandolf, MBA, is Chief Executive Officer of Healthcare Success, one of the nation's leading healthcare and digital marketing agencies. Over the past 20 years, Stewart has marketed and consulted for over 1,000 healthcare clients, ranging from practices and hospitals to multi-billion dollar corporations. A frequent speaker, Stewart has shared his expertise at over 200 venues nationwide. As an author and expert resource, Stewart has also written for many leading industry publications, including the 21,000 subscriber Healthcare Success Insight blog. Stewart also co-authored, "Cash-Pay Healthcare: Start, Grow & Perfect Your Cash-Pay Healthcare Business." Stewart began his career with leading advertising agencies, including J. Walter Thompson, where he marketed Fortune 500 clients such as Wells Fargo and Bally's Total Fitness.



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