Marketing Health Intervention in Hospitals General Medical Services Ltd - Essay Example

 Marketing Health Intervention in Hospitals – General Medical Services Ltd Executive Summary When designing the structure and the operational framework of a healthcare organization, one of the most important issues is the level of services provided to the general public. The above level has to be in accordance with a series of specific requirements that are related both with the healthcare industry as well as the general commercial and legal environment of a specific country. Current paper examines the marketing strategies followed by General Medical Services Ltd, a hospital operated in the northwest London. The hospital established in 1994 and provides a wide range of medical services covering all ages. Although its position in the healthcare industry has been secured the last 3 years the major problem that the management team has to resolve is the lack of an effective marketing strategy which could help the organization to expand its list of customers and to increase its profits. Such a development could provide to the firm the funds needed for the acquisition of advanced technology equipment (as this requirement has been imposed by the radical increase of demands for specialize medical treatments). I. Introduction In the general area of commercial market, marketing is often considered as ‘an exchange between marketers and consumers that aims to satisfy consumer needs and maximize the return on investment for shareholders; thus, there is an inevitable and omnipresent tension between marketers' interests and those of consumers which forms the basis for different positions on the ethics continuum of marketing practices’. However, it has also been observed that ‘placing consumers' interests against those of marketers on the ethics continuum may be too simplistic, because it may imply that marketing is a zero-sum game and reject the possibility of a win-win outcome; both marketers and consumers may form their perceptions of the ethics of specific marketing scenarios according to ethical principles such as rights, justice, fairness, and equity; in many cases, marketers and consumers agree on the ethical evaluations of certain marketing scenarios and raise no ethical concerns (Choudhury, 2003, 370). From a different point of view marketing has been characterized as ‘a social process by which individuals and groups obtain what the need and want through creating and exchanging products and value with others’. Moreover, traditional marketing has been divided into ‘four segments denominated as place, promotion, product, and price’. Referring to health care, marketing concerns: access "place"- the ability of a patient to get into the health care delivery system as well as the location where health care goods and services are sold; promotion-advertising, personal selling, public relations, and health education; services ("product") in health care, services rather than products are marketed; and cost "price")-anything of value given up by the patient in exchange for health care services such as time, money, or opportunity’ (Clark et al., 1989, 40) Despite the dramatic changes that have occurred in health care in recent years, surprisingly little change has occurred in the way marketing dollars are disbursed. Advertising commands the largest share of marketing expenditures, accounting for nearly 37% of marketing budgets in 1998 (compared with nearly 33% in 1996). On the other hand, support for public relations fell to about 18% from about 22% in 199(little change has occurred in expenditures for community relations covering around 14% and marketing communications staying at about 17%. In marketing dollars spent, strategy and planning activities and business development have gained only marginally, standing at about 9% and around 7% of 1998 budgets, respectively. Market research accounts for nearly 6% of marketing budgets, up slightly from 1996. An "other" category accounts for 19% of the expenditures, representing an area that obviously requires additional explication. More than one-tenth (about 12%) of marketing expenditures go to outside contractors (Marketing Health Services, 1999). The issue of marketing in the healthcare industry has been exposed to a series of changes which have been considered as necessary in order for the public to be protected during the provision of the medical services. In this context, social marketing has been developed as an autonomous area of interest related with both the public (to which the marketing strategies refer) and the government (to the extension that the latter imposes the rules that have to be followed by the marketing services providers). Under these terms social marketing has been characterized as ‘a strategy that uses marketing approaches developed within the business arena to design, implement, and evaluate socially beneficial programs’ (Farmer et al., 2002, 1). Regarding specifically the advertising in healthcare industry it has been noticed that the ‘design, implementation and evaluation of health campaigns involve inherent ethical concerns and dilemmas; many of these concerns, however, are often invisible’. The above dilemmas – always regarding the promotion of healthcare services – are usually related with the following four areas: (a) strategies and content of health communication campaign messages, (b) inadvertent adverse outcomes from campaign activities, (c) power and control, and (d) social values (Guttman, 1997, 155) II. General Medical Services Ltd – background and operational environment General Medical Services is the Northwest London’s biggest and best known hospital. It provides a series of medical services including surgical and dental ones. Made after the merger of two well known hospitals – the Saint George and the Royal Jubilee, General Medical Services has become one of the most known hospitals in the general London region. The hospital is mostly known for its advanced technology and the quality of the services offered to the patients. Currently the hospital has a staff of about 600 and every year treat around 80,000 people – 25,000 as outpatients, 8,000 as emergency admissions, 36,000 inpatient admissions and 11,000 day cases. The hospital has a very good level of annual profits; however it seems that the last 2 years the number of patients has decreased with a following decrease in the financial performance of the company – although in a rather small percentage (8 %). This issues although not significant enough to cause turbulences in the internal environment has although create a sense of anxiety in the management team who tries to reverse the situation but there is no direct result to this effort. IIa. Market Audit The healthcare industry is a very competitive market. Specifically for UK, the hospital operating in the area offer services of high quality using advanced technology and staff that has been especially trained in each particular sector (although there are also cases that the above conditions are not applied). One of the most common phenomena is that the hospitals operating in the current market seek for a co-operator in order to obtain a competitive advantage towards their rivals (Platt, 2000). Although such an effort is justified by the high pressures made on the financial market, it can lead however to very severe results. One of the most important is the creation of two different levels of medical services provided, those provided in large hospitals complex through the use of advanced technology and in high price and the ones provided in the local hospitals using the existed equipment (which is usually of a low level of quality). In a managed care environment, hospitals are challenged to re-examine what they spend for advertising. Health management organizations, health insurance companies, and employers want an accounting of money spent by hospitals—and what the money does for the community (Reichel, 1997). In most non-health-care industries, organizations have a relatively easy time targeting a potential customer base. For example, the new car dealer can readily identify the customer as the one who performs three actions: (1) chooses the specific model and the desired options, (2) determines how to finance the automobile (e.g., cash or instalment loan), and (3) actually uses (or consumes) the product. However, in health care it is not just one person or group who performs these three functions. Rather, from the perspective of the health care provider organization there is a net of customers (comprised of patients, insurance organizations, and employers) involved in choosing, financing, and consuming health care services and associated products such as medications. Historically, a marketing plan has been designed to address four key factors: product, price, place, and promotion. Collectively, these are known as the four Ps.5 When originally conceived in the 1950s and 1960s, the four Ps concept was applicable to both the manufacturing and retail industries. The application to service industries occurred much later. Although marketing was introduced in the health care arena in the mid-1970s it was not until the late 1980s that health care organizations recently began actively applying marketing techniques. In addition to the four Ps, the nature of the health care environment requires the addition of a fifth factor—partners. This addition recognizes that the health care industry has entered a new era defined by the unprecedented number of interorganizational collaborations taking place. The partner component encompasses an organization’s allies along with recognizing that some of these comrades may previously have been competitors (Liberman, 2001) Specifically regarding the area of General Medical Services, there is no other hospital around which could be a competitor to the specific hospital. However, it seems that in many cases the patients choose to use other medical services providers who offer medical services at lower prices regarding the ones provided in General Medical Services (which is considered as a rather expensive hospital comparing the others of its type). So at a first level, the particular hospital does not have to face the competition of other hospitals but has to deal with the promotion of its services in order to be more attractive to the customers/ patients. In the above context, in order to conduct a complete market audit we will need specific information regarding the competitors as well as the healthcare industry in general. The above mentioned information would have to indicate the financial strength and the market position of the competitors as well as the current financial and social trends in the healthcare sector. The relevant research will be conducting using questionnaires provided to the current clients/ patients of the hospitals but also to everyone that will enter the hospital area. Another tool for the gathering of the necessary information, will be the scientific publications as well as the statistical data published by the authorized organizations (always related with the healthcare industry). III. SWOT analysis General Medical Services is a hospital that has created after the merger of two existed hospitals – as mentioned above. This practically means that the hospital has the financial strength to face any possible turbulence that may appear in the specific industry without severe consequences to its operation. On the other hand, the hospital uses medical equipment of advanced technology while the medical staff is being periodically trained in order to be informed to the developments in the specific scientific area. The use of advanced technology and of high qualified medical staff can be considered as the major elements of strength of the particular hospital. The high quality of the medical treatment and the accommodation offered to the patients are also among the hospital’s strengths. At the level of daily operations and referring to the issue of usual medical costs from the patient’s side, the hospital could be characterized as a rather expensive one. Of course the level of the medical services’ prices can be justified by the existence and use of advanced technology and services as already mentioned, however in terms of people’s financial ability to cover a specific medical treatment; this issue should be put under consideration by the specific hospital’s management. On the other hand, the hospital is co-operating only with private insurance institutions but not with the public one, which can be a major obstacle for the people who have chosen the public insurance but would prefer this hospital for a specific problem of health. In general, the options available for the funding of the medical costs are very limited and this issue can be considered as the major disadvantage of the specific hospital. Even if the cost involved is justified by the level of services provided, there should be a specific plan available to the public for the cover of the medical costs. The hospital, as mentioned, does not face competition from other medical institutions operating in the specific geographical area. This is a major advantage which has to be used in order to help the increase of the hospital’s performance (Luck et al., 2000). Moreover, the hospital should promote to the general public the level of medical services provided and the high qualified staff trying to gain the trust of people living in the specific area. The presentation of the above elements of the hospital’s strategy should be combined with an offer for a possible decrease of the medical costs even partially (in particular types of services, like the dental ones). This could result to the expansion of the current supply chain (as referring to patients) to all directions (as can be resulted furthermore to hospital’s stakeholders in general). It should be mentioned that the marketing plan which is going to be designed by the hospital’s management team has to take into account the extremely hard competition of the specific industry, the local people’s needs as well as the turbulences in the financial market (Kenneth et al., 1998). The potential merger of competitors (even if they operate in a significant distance) can be a severe threat for the specific hospital which has for this reason to reconsider its strategy of pricing and adapt the cost of the medical services to the public to the levels applied in the general market. The responsibility of the hospital’s management team is focused mainly to the need for re-design the institution’s general strategic plan in order to meet the requirements of the modern market (which is characterized by hard competition, severe financial pressures and unexpected changes in the political conditions). The application of such a strategy could help towards the increase of the hospital’s financial performance both in temporary and in a long-term basis. However, it should be taken into account that the marketing plan which is going to be used for the promotion of such a strategy (including the presentation of the current hospital’s strengths) has to be adapted in the market’s rules and the ethics applied in the general marketing area. IV. Mission statement According to the hospital’s relevant statement, its mission is to provide the highest quality health care through the most advanced technology by a team of high qualified medical staff. Moreover, the quality of the equipment used as well as the level of accommodation and care provided to the patients are being examined periodically in order to retain their status and be developed in accordance with the needs of people of the specific area. It should also mentioned that the hospital covers all areas of medical services offered a variety of methods (surgery, therapies using equipment of advanced technology, treatment based on the combination of drugs and intensive daily care) available to any potential customer/ patient. V. Objectives Regarding the objectives set by the management team these refer to the provision of medical services of high quality with no dependency from time or cost needed. Of course, such a target can have significant consequences to the level of the hospital’s financial performance (at least the last two years) however the management team seems to believe that the medical services provided to the public have to be of quality and the personnel involved has to meet certain standards of qualifications whereas the cost of services should be regarded as a secondary issue. In practice, the above targets have been achieved (as to the level of quality of services provided and the level of knowledge and experience of medical staff) but the influence of the high cost related with the daily medical treatments (and other types of medical services) provided to the patients has been rather negative. In this context, the use of marketing services has been considered as necessary in order to present the level of medical services provided in the specific hospital to the general public (without specific thoughts for decrease of the medical services’ cost though). Va. Operationalisation As for the designed marketing program, this will be funding by the hospital in cooperation with a public organization (a research should be made in that direction for the offered options). On the other hand, the team that will be engaged in this program would be probably a marketing services provider with a lot of experience particularly in the healthcare industry. The participation of hospital’s employees to the procedure could be helpful for the creation of an appropriate marketing strategy. The above described marketing strategy will use as ‘tools’ of promotion mainly the television and the press without rejecting the idea of posters in the greater hospital area. In this context, the arrangement of social events with the participation of celebrities could be also be a great advantage for the promotion of the whole effort. VI. Resources Evaluation Plan As mentioned above the marketing plan would cover a vast advertising area (media and press) and should be therefore very carefully evaluated as of its cost. The help of the state (through the funding from a public organization) could be really valuable even if limited to a part of the campaign. On the other hand, the persons involved in the calculations and the evaluation of the relevant costs should be experienced and with a very good knowledge of the specific industry (in order to include possible unexpected costs to the whole planning). Moreover, the participation of the hospital’s audit department should be intensive while the briefing regarding the development of the procedure should be constant and detailed. A comparative study of similar marketing campaigns could be very helpful for the successful completion of the above task. VII. Recommendations The position of the hospital in its industry could be characterized as satisfactory given the facts that were presented above. However, the need for an appropriate and effective marketing plan is considered as immediate as the hospital has to face the strong competition from the other hospitals operating in its greater area. In this context and in order to achieve an integrate result, the hospital’s management team should proceed to the evaluation of the whole business planning and make any amendments that would be necessary in order for the business strategy to be aligned with the current market trends. The control over the particular departments should be also become stricter not in the sense of harder human resources rules but meaning the observation of all the events and the variables that may affect adversely the corporate performance. VII. Conclusion The provision of medical services has been a significant part of the general social services market (Bunton et al., 1995). Specifically for UK, the competition and the high level of technology and knowledge involved has led to the provision of medical services of high quality in most hospitals and other medical institutions. However, the cost involved operates as an obstacle to the access of the vast majority of people to certain medical clinics and hospitals (especially those provided very expensive medical services). General Medical Services belongs to this category of hospitals. On the other hand, the cost of medical services has led the vast majority of people to prefer medical services providers that apply a cost-effective scheme of services provided to the public. This situation caused a series of turbulences to the very expensive hospitals complex which observed that their profits keep on decreasing annually (the same problem appeared in General Medical Services). The use of social marketing has been considered as necessary in order to eliminate the consequences of the high cost. However, it seems that such a technique cannot stand separately from the rest of a company’s strategic options but has to be combined with other measures taken in the hospital’s management practices and plans as a whole. 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