In today’s highly competitive healthcare landscape, effective marketing strategies have become essential if healthcare professionals want to thrive. The traditional marketing mix, known as the five Ps (product, price, place, promotion, people), has long been a staple in marketing for other professions and services. I will share how the five Ps and one Q can be applied to contemporary healthcare practice.
Product
In healthcare, the product usually is not a tangible or a physical item; instead, it encompasses the services and care provided to patients. Healthcare professionals must focus on delivering high-quality, patient-centered care and ensure every patient has a positive experience. This involves continuously improving the quality of care, emphasizing patient safety, and fostering a favorable doctor–patient relationship. Additionally, healthcare professionals need to differentiate their services from other practices in the community or region by focusing on areas of expertise, patient satisfaction, and access to care.
Price
Today, with high deductibles and copays, patients are increasingly cost-conscious. Healthcare professionals must provide transparent pricing information, offer competitive fees, and demonstrate the value of their services. Communicating the benefits and outcomes of treatments can help patients understand the value proposition and be more willing to invest in their healthcare. Furthermore, offering flexible payment options and insurance coverage assistance can enhance affordability.
Place
Place refers to the location of the practice and accessibility of the providers. In today’s digital age and after COVID-19, providers must extend their reach beyond traditional brick-and-mortar practices or face-to-face interaction with patients. Offering telehealth services can increase access to care, especially for patients in remote areas, patients with minor complaints, or those with limited mobility. A user-friendly website that offers online appointment scheduling, virtual consultations, and health resources can enhance patient convenience and engagement.
Example: In one instance, it was noted that an assisted fertility practice was located in a large urban community. The demographics indicated that many of the practice’s potential patients were not married, and they did not need their services for assisted fertility. Most potential patients who were married and older had moved to the suburbs. As a result, the target market of likely patients was more likely to be found in the suburbs, where the practice did not have a brick-and-mortar facility.
Promotion
Promotion is the most well-known aspect of marketing. Healthcare professionals must promote their services effectively to attract and retain patients. Today, it is essential to use both traditional and digital marketing strategies. Conventional methods may include print advertisements, visibility on radio and television, brochures, and participation in community events. However, digital marketing avenues, such as social media platforms including Facebook, Instagram, Twitter, YouTube, and Snapchat, are necessary to reach your target audience for new patients. Also, search engine optimization and targeted online promotions can increase the reach and impact of promotional efforts. Moreover, leveraging patient testimonials and online reviews can enhance credibility and trustworthiness.
Example: One service that the practice offers is fertility preservation via egg retrieval and freezing the eggs for later use. This service would apply mainly to older, single women who wish to preserve their eggs for later use. Egg retrieval and freezing of the eggs requires a comprehensive laboratory. The practice reported that they had decreased their lab capacity, with only one lab, compared with the competitor, who had three labs in the urban area and the suburbs. As a result, they were competing with a rival who could promote a greater number of labs and possibly faster service.
People
In healthcare, the human factor is pivotal in delivering exceptional patient experiences. Healthcare professionals must prioritize and build strong relationships with patients based on trust, transparency, empathy, and open communication. It is imperative to train staff members in effective communication and patient-centered care. Moreover, fostering a positive organizational culture that values compassion and teamwork can enhance the practice’s overall patient experience and reputation. Many physicians are worried that artificial intelligence will replace physicians. However, AI cannot provide empathy and compassion. Therefore, physicians have little to fear regarding incorporating AI, including ChatGPT, into their practices.
Quality
Just a few decades ago, patients had little concern about costs, because their employer paid the bills for medical care. Now, patients have high deductibles and copays. As a result, patients now include cost as one of the metrics for selecting a physician or a hospital.
Patients are surprised when they find a price disparity in the cost of care in various regions of the country. It’s difficult to understand how a CT scan in New York City is worth 10 or 20 times the cost of the same imaging study in New Orleans.
The theory behind sharing price transparency is that when consumers can compare prices for doctor visits, hospital stays, and other services, market competition will lower prices. Doctors and hospitals have rarely competed on cost. Third-party payers still pay the bulk of healthcare bills, and many players in the healthcare industry benefit from keeping their costs and profit margins opaque. The pressure to post and share the cost of care is increasing, however. Consumers are becoming increasingly price sensitive as they shoulder a growing proportion of health costs. In 2018, 38% of Americans with employer-sponsored insurance had a deductible of $1000 or more—up from 10% in 2006, according to the Kaiser Family Foundation. Silver and bronze plans created by the Affordable Care Act carry average family deductibles of $6,000 and $10,386, respectively. More than half of bronze plans also require patients to pay 30% of doctors’ fees. Still, some have mainly shown how confusing healthcare pricing is. Hoping to shine a light on the variations in hospital charges, CMS released a list of the average prices Medicare was charged during 2020 by 3300 U.S. hospitals for the 100 most common inpatient services.
The variations were startling. For example, the average charge for joint replacement surgery ranged from $5,300 in Ada, Oklahoma, to $223,000 in Monterey Park, California. Even in the same city, there were wide variations. The charge for treating an episode of heart failure was $9,000 in one hospital in Jackson, Mississippi, and $51,000 in another hospital in the same city. A month later, CMS released a second database comparing average hospital charges for 30 common outpatient procedures, and the variations were just as significant. A hospital in Pennington, New Jersey, charged $3,036 for a diagnostic and screening ultrasound, whereas one in the Bronx, New York, billed just $88.
Hospital administrators dismiss those list prices as meaningless and misleading, because only some patients pay them. Commercial insurers often use them as a starting point for negotiating large discounts. Medicare itself pays hospitals predetermined rates based on diagnoses, using CPT and ICD codes, regardless of what they charge. List prices also reflect all the costs of running a hospital, including keeping emergency departments, burn units, and other costly services open 24 hours a day. Moreover, many hospital executives say they must increase charges for privately insured patients because Medicare and Medicaid reimbursements don’t cover their costs—a shortfall the American Hospital Association put at $46 billion nationwide in 2017.
Price transparency is well within reach of providers and hospitals. The anticipated cost is readily available information that, together with other information, helps define the value of those services and enables patients and other care purchasers to identify, compare, and choose providers that offer the desired value and quality of care.
A Real-World Example
An assisted reproductive healthcare practice specializing in in vitro fertilization (IVF) has noticed a decrease in market share from the previous year, while the competitor in the region appreciated a slight increase in procedures and market share.
A closer look at the price for each IVF procedure reveals that the competitor offered a lower price. This lower price would influence the provider selection, because IVF cycles are not covered by insurance and require out-of-pocket payment for each cycle.
So, what did we learn from the analysis and comparison of the two assisted fertility practices? First, what is the issue of price? The practice had to lower its prices to compete with the local competitor. Second, they had to decide whether they would open another facility in the suburbs with the more significant potential of patients needing fertility assistance. And finally, they would have to consider increasing the number of labs to accommodate fertility preservation to be competitive.
Marketing is a double-edged sword. It is common for a practice to scapegoat marketing when there is a decrease in revenue for the practice. But that is not the time to consider cutting the marketing budget.
On the other hand, marketing also may be misrepresented as a magic solution for increasing marketing share. I hope this hypothetical analysis of an assisted fertility practice demonstrates that the marketing uncovered issues such as price, place, and promotion that needed to be addressed and explain the decrease in revenue. It wasn’t a failure of the marketing efforts but a problem with the price, place, and promotion that needed to be addressed.
Bottom Line: In the constantly evolving healthcare industry, healthcare professionals must have a comprehensive marketing strategy to thrive. The five Ps of marketing for the healthcare profession—product, price, place, promotion, and people—provide a framework for healthcare professionals to implement their marketing efforts. By delivering high-quality, patient-centered care, demonstrating value, embracing technology such as AI, and fostering strong doctor–patient relationships, healthcare professionals can position themselves for success in a competitive market. Remember, successful marketing in the healthcare profession ultimately leads to improved patient satisfaction, better online reputation management, and perhaps enhanced care outcomes.