Hospital Administrators are Bad at Marketing Strategy that Drives Patient Volume

A lot of hospital marketing strategy is awful.  Especially marketing that is heavily influenced by hospital administrators and physicians. They are usually terrible at understanding the kind of marketing strategy that drives patient volumes.

The Big problem is, they don’t know how clueless they are.

Hospital administrators want data-based decisions but marketing strategy is not data-based and not a linear problem. The “data” they should analyze is admissions data, increases in contribution margin and equivalent procedures after a campaign.

However, when you explain strategy formulation to your executive team, strategy can be explained by two important questions that must work together:

  1. Where will we play?
  2. How will we win?

Let’s quickly look at both questions

#1 In what areas will we compete as an organization: meaning what demographic are we chasing with what service lines?

Look at this Venn diagram: the sweet spot of where you compete is the intersection of your genuine expertise (and capacity), your most profitable procedures, and where you see an under served geographic or demographic group.

For instance, the example we will use here is for a cath lab: we have seen hospitals pour tons of money into Business Development of programs like CV cath labs when they are fighting tooth and nail for every procedure with other local hospitals. So they have expertise and capacity, and they make money doing it, now you have to address question number 2:

#2 How will we gain significant advantage- or avoid competition completely?

In the cath lab example, we recently saw a CV program stop competing for physician referrals because they identified an under served group: the asymptomatic pre-episode patient.

They realized that 1 in 20 adults would find out they had a CV problem from a heart attack. They set up online screenings, events early detection, prevention and wellness seminars that drove over 400 heart procedures in less than six months outside of traditional physician referral.

When forming a strategy, these two strategy questions always go together. It isn’t linear and logical but it works and can help you explain your strategy to the organization. Remember: he isn’t bad CEO, he’s just bad at strategy.

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