Marketing in Healthcare - Case Study Example

Marketing in Healthcare: Proposed Therapeutic Acupuncture Service at the Ibn Al –Nafees Hospital Background The proponent of the new product (service) is a nurse supervisor and the Acting Principal Nursing Officer at the Ibn Al –Nafees Hospital in Bahrain. Ibn Al –Nafees Hospital is a small private hospital with a 25-bed capacity. It is located in the Bahraini capital of Manama and is just one of the only two private hospitals in the country. The hospital offers a whole range of expert medical services with state-of-the-art facilities, including the latest medical equipment and technology.. The hospital also enjoys a very high bed occupancy rate of 90- 99 % per day. Surgery rooms are kept busy everyday with an average of around 20- 25 patients per day. The hospital also maintains linkages with reputed medical institutions worldwide to keep abreast of the latest developments in the field of medicine. Ibn Al –Nafees Hospital provides round-the-clock minor emergency services. The hospital also clinics offering medical consultation and related services in the following areas: Cardiothoracic Vascular, Dental, ENT, Gastroenterology, Genetics, Obstetrics and Gynecology, Nephrology Neurology, Ophthalmology, Orthopedic, Pediatrics, Plastic and Reconstructive Surgery, Psychiatry, Skin and Cosmetic, Surgery and Laparoscopy, and Urology. The hospital also houses facilities with high-tech such as an operation theater, laboratory, pharmacy, physiotherapy, radiology (EEG, EMG), etc. Patients choose from an impressive roster of local and foreign doctors in the aforementioned specializations. Needs Analysis A cursory look at the services offered by the other hospitals in the country revealed that majority of the traditional medical specializations being offered at the Ibn Al –Nafees Hospital is also being provided by other hospitals. Practically, therefore, there is nothing unique along the area of traditional medicine which can be offered by Ibn Al –Nafees Hospital that is not yet being provided by many other hospitals in the country. However, looking deeper into the competition, it was observed that there is a virgin area in non-traditional medicine, particularly acupuncture. There are only two places in Bahrain where acupuncture is offered: one is a surgeon who uses acupuncture solely in orthopedic applications, while the other physician practices acupuncture with a very low rate of success. The fact that there are only two private hospitals in Bahrain offers bright prospects for therapeutic acupuncture services for the main reasons: first, the other hospital does not offer acupuncture; and second, even if primary health care is free in Bahrain, it is doubtful if the free clinics and government hospitals can offer free acupuncture services. Since acupuncture is established to be a good therapy for post operative pain, the service can also be marketed among surgery cases confined in the hospital. Given the appropriate motivation through marketing efforts, an average of 20 – 25 surgical procedures in the hospital could be translated into at least 20 acupuncture patrons a day only from confined patients alone. Moreover, the fact that practically all diseases are associated with some kind of pain, connotes that many people may benefit from acupuncture, either as an alternative or complementary therapy applied in a scientific setting. The growing popularity of acupuncture is also an encouraging sign that prospective patients will patronize acupuncture services from Ibn Al –Nafees Hospital. Thus, it is believed that offering therapeutic acupuncture services in Ibn Al –Nafees Hospital as a complementary intervention for pain management will present a profitable venture for the institution. Risk Evaluation and Possible International or Cultural Complications The popularity of acupuncture as an alternative treatment has increased through the years (Gunn 11-12). But just like any other medical procedure, the patient receiving acupuncture treatment is exposed to some form of risk. A number of large-sample-size studies, however, established the safety of undergoing acupuncture, in terms of the incidence of adverse events reported pertaining to the procedure. The team of White, Hayhoe, Hart and Ernst found no serious adverse events from the reports of British doctors and physiotherapists who performed acupuncture, although some 671 per 10,000 minor adverse events were reported with 14 per 10,000 of the minor cases as significant. White, et al, however believed that the rates may be classified as minimal (486). Meanwhile, the study conducted by the group of MacPherson, Thomas, Walters and Fitter reported only 43 minor adverse events or 1.3 per 1,000 treatments (487). The most common minor adverse events associated with acupuncture treatment are needle pain and some bleeding (Ernst 481). From the aforementioned scientific evidence, it may be deduced that introducing acupuncture therapy as a new service does not present significant risk for the Ibn Al –Nafees Hospital as long as only experienced and professional acupuncturists, preferably with medical degrees are trusted to provide the service for hospital patrons. As maintained by Ernst, “those responsible for establishing competence in acupuncture should consider how to reduce these risks” (481). Alternative forms of medicine such as acupuncture and herbal treatment approaches are branching out from their respective countries of origin to help people all over the world. Such gesture of scientific mindedness is being spearheaded by the World Health Organization in their efforts to discover how to synergize the know-how from different cultures and scientific perspectives for the benefit of improving health care (Yale Global Online par. 1). Consequently, the Al-Ahram Weekly Online bared that the “medical profession in the Arab and Islamic worlds is looking beyond the narrow scope of pills and injections onto the wider horizons of alternative medicine” (qtd. inYale Global Online par. 2). Hence, based on the aforementioned positive developments in favor of acupuncture and other alternative medicine approaches in Arab and Islamic countries, it is believed that international or even cultural complications will not arise as a consequence of marketing acupuncture in the Ibn Al –Nafees Hospital as a complementary treatment for pain The Proposed Service The service being proposed is therapeutic acupuncture for pain management. In general, the practice of acupuncture refers to : “a comprehensive system of healthcare using Oriental medical theory and its unique methods of diagnosis and treatment. The treatment strategies include insertion of acupuncture needles through the skin and usage of biophysical procedures for acupuncture point stimulation, including the use of heat, Oriental massage techniques, electrical stimulation, herbal supplemental therapies, dietary guidelines, breathing techniques, and exercise based on Oriental medical principles (Mitchell 60) For the first five years, the Ibn Al –Nafees Hospital will concentrate acupuncture therapy either as an alternative or complementary approach for pain management. Within the same time span and based on patronage, the hospital will study on what other forms of illnesses will be handled by the hospital’s acupuncture section. The service is being proposed to be made available either at the last quarter of the current year or at the start of 2010. Initial consultation is being set at $110 for a two-hour initial consultation and assessment, and $55 for the following one-hour consultations. This pricing scheme is considered competitive, based on prevailing US and UK rates for the acupuncture service. American clinics and hospitals charge from $35 – 75 for a one-hour session, while their British counterparts charge ₤45 or $74 per hour (“Acupuncture” par. 17; “Acupuncture Therapy”, par.1; and “Central” 8). The objectives of introducing therapeutic accounting services at the Ibn Al –Nafees Hospital are: (1) to utilize acupuncture as a complementary therapy for the management of pain from various causes, particularly patients 35-69 years of age; (2) realize respectable profits from the investments made in offering the acupuncture service; (3) establish Ibn Al –Nafees Hospital as the “mecca” of scientific acupuncture in Bahrain. Market Analysis Owing to the frailties of humanity, every living person is susceptible to sickness and pain from various causes. From a macro-viewpoint, therefore, the total market for acupuncture in Bahrain consists of all ages. However, it is believed that the total market for acupuncture will consist of adults from 35-69 years old. Table 1 presents the total market for acupuncture based on an estimated population of 35-69 year-old adults in Bahrain sourced from the US Bureau of Census. Table 1. Estimated market for Acupuncture in Bahrain from 2010-2014. Year Estimated Market (35-69 years old) 2010 2011 2012 2013 2014 305,049 311,149 317,068 322,693 327,936 Marketing of the Acupuncture Service The Unique Product (or Service) Statement. Five catch phrases were developed from which one was selected to serve as the unique product (service) statement. These statements were: (1) At Ibn Al –Nafees Hospital, healing is made possible in more ways than one; (2) At Ibn Al –Nafees Hospital, you get well one way or another … and it is always your choice!; (3) Ibn Al –Nafees Hospital: Offering the best of both worlds to get you well; (4) Ibn Al –Nafees Hospital: Transcending methodical barriers to find more ways to get you well; and (5) Ibn Al –Nafees Hospital: Harnessing complementary medicine to defeat pain and disease. After careful deliberation, the fifth catch phrase was adopted as the unique service statement : Ibn Al –Nafees Hospital: Harnessing complementary medicine to defeat pain and disease. The Target Market. The total market identified for the proposed service is large as shown in Table 1. For 2010, for example, the total market for 35-69 year old is 305,049. The estimated market share will, therefore, be very conservative. On its introductory year, a market share of only 1% or 3050 patrons is believed to be conservative, but comparatively profitable. Market share is, however, expected to increase by 1% each year for the next five years. Table 2 shows the expected market share for therapeutic acupuncture services for the first five years. Table 2. Estimated market share for from 2010-2014. Year Percent Increase in Market Share per Year (with 2010 as base year) Estimated Market Share (Number of Patients) 2010 2011 2012 2013 2014 - 2% 3% 4% 5% 3,050 6,223 9,512 12,908 16,397 As shown in Table 2, the expected market share of 2% accounts for an estimated 6,223 patients in 2011. For the succeeding three years, the market share and the corresponding estimated number of acupuncture patients are: 3% for 2012 at 9,512; 4% for 2013 at 12,908; and 5% for 2014 at 16,397. The expected average patient turn-in for the five-year period is 9,618. Anticipated Revenue from the Operations. In the calculation of the anticipated income from the new service being proposed, the following assumptions are made: (1) Initial and subsequent consultation fees increase by $5 per year; (2) 30% of patients continue therapy for the next month at 1 session per week; (3) Another 30% of the patients continue therapy for the next two months at 1 session per week for the first month and 1 session every other week for the second month; (4) Another 10% of the patients continue therapy for the next three months at 1 session per week for the first month and 1 session every other week for the second and third months; (5) Another 10% of the patients continue therapy for the next four months at 1 session per week for the first month and 1 session every other week from the second to the fourth months; (6) Another 10% of the patients complete a six-month therapy regimen at 1 session per week for the first month and 1 session every other week from the second to the sixth months; (7) The final 10% of the patients quit after the first consultation; and (8) Each room is accommodates one patient per hour of operation Table 3 presents the anticipated revenue from the service for the first five years. Table 3.Anticipated revenue from the acupuncture service from 2010 to 2014 Year Anticipated Annual Gross Revenue in US Dollars 2010 2011 2012 2013 2014 $ 999,951 1,693,273 2,776,564 4,023,336 5,435,539 From the anticipated annual income for the first five-year period, the average income is US$2,985,733 and the expected five-year total is USS$ 14,928,663. However, realization of the above revenue is subject to corresponding expenses, such as the appropriation of rooms with separate cubicles, hiring of experienced and licensed acupuncture practitioners and marketing expenses. Benefits of the Product (Service). In connection with the marketing of acupuncture services, advertising literature should not fail to include the numerous benefits which can be derived from acupuncture. There is ample research-based evidence on the efficacy of acupuncture for treating various illnesses and conditions, such as acute dental pain (Ernst and Pittler 443), cancer pain (Alimi, Rubino, Leandri, Brule, Lemaire, and Hill 4120), chronic pain in general (Lee 17), chronic headache and migraine (Vickers 744), chronic neck pain (Irnich, et al 83), cocaine dependence (Avants, Margolin, Holford, and Kosten 2305), depression in women (Allen, Schnyer and Hitt 397), dysmenorrhea (Helms 51), insomnia (Sok, Erlen and Kim 375), low back pain (Manheimer, White, Ernst and Langenberg 692), migraine in children (Pintov,. Lahat, Alstein, Vogel and Barg 129), osteoarthritis of the knee (Griffith par. 4), pain (Anderson and Lundeberg 271), peripheral diabetic neuropathy (Abuaisha 115) post-operative, nausea and vomiting (Naoki et al 349), pre-operative anxiety (Wang, Peloquin and Kain 1178), and self healing (Han 17). Acupuncture was also found to be an effective antiemetic technique (Vickers 303). Positioning. In business parlance, the term positioning refers to marketing effort to “identify a unique selling proposition for the product” [or in this case, a service] . It involves “arranging for a product to occupy a clear, distinctive, and attractive position relative to competing products [or services] in the minds of target consumers” (Silk 90). Considerations involved are usually formalized in a positioning statement directed to the market segment for which the service is being targeted. For the therapeutic acupuncture service being proposed, the positioning statement is as follows: Ibn Al –Nafees Hospital’s Therapeutic Acupuncture Services harnesses complementary medicine to guarantee your best chance of defeating pain and disease among all hospitals nationwide using highly scientific approach backed up with research-based evidence. Marketing Mix. The marketing mix is a set of tools for marketing which facilitate the realization of the objectives of a business venture. Marketing mix consists of four elements popularly dubbed as the Four P’s : Product, Price, Place and Promotion. The first two elements, product (actually a service) and price have been discussed in the earlier part of the paper. As regards to place, it should be borne in mind that based on the assumptions used in the calculation of the anticipated gross revenue, a market share of 3050 patients means approximately 18,011 one-hour sessions for the year 2010. Appropriations should, therefore, be given to accommodate these sessions. Table 4 shows a comparative tabulation of the number of rooms or private cubicles in terms of the period of daily operations for the service. Table 4. Room requirement for operating an acupuncture service Year Session Per Year Number of Rooms (or Private Cubicles) Needed Based on the Number of Hours of Operation per Day 8 hours 10 hours 12 hours 14hours 16 hours 18 hours 20 hours 24 hours 2010 18,011 6 5 4 4 3 3 3 2 2011 36,726 13 11 9 8 7 6 5 5 2012 56,114 20 16 13 11 10 9 8 7 2013 76,145 27 21 18 15 14 12 11 9 2014 96,744 34 27 23 20 17 15 14 11 For the first year of operation, the hospital is testing the waters, it will, therefore, be in the best interest of the business that 24-hour acupuncture service is offered for the following reasons: (1) at the introductory phase, the service should be available for patients anytime of the day; (2) the hospital is open 24 hours and working patrons may want to avail of the service outside of natural daytime working hours; and (3) Based on the patient turn-in assumptions, 24-hour a day operation would require only 2 additional rooms to start the service. Alternately, it may be a just a bigger room which can comfortably accommodate 2 private cubicles. The last P or Promotion represents all forms of communication that the hospital will use to make the service visible in the market. Promotions includes four element, namely advertising, public relations, word of mouth and point of sale. Advertising. The acupuncture services will be rely heavily in health and leisure magazines, newspapers, the Internet and in billboards all over Bahrain. Occasional television commercials will also be aired on primetime slots for maximum audience coverage. Preferably, testimonies of satisfied patients will be used as part of the television advertisement. Public Relations. Brochures and pamphlets about the acupuncture service will be prepared and distributed by a promotional team within Manama, the capital. Doctors making their daily rounds of their confined patients will also be requested to help in marketing the service by informing their patients experiencing chronic pain and those requiring pain management, of the availability of an acupuncture service and its efficacy as a complementary treatment. Doctors in the out-patient clinics will also be requested to advise their patients regarding the new service. Patients signifying interest will be visited by the acupuncture practitioner with longer talks and possibly pre-assessment. For the first two months, confined patients signing up for a full-six month acupuncture pain management program will be given 20% discount on the initial consultation fee ($92 instead of the regular $115). Names of confined patients who did not show interest in the acupuncture service, but are prospective candidates by virtue of their condition, will be included in a raffle draw during the first month, where 3 winners will be given complimentary (free) one-hour acupuncture treatment. Word of mouth. With excellent service, it is believed that word of mouth will contribute well in the promotion of the acupuncture service. The raffle drawn winners are good candidates to spread the word if they will have positive experience during the free acupuncture session. Point of Sale. Original journal articles of research based evidences, such as those mentioned in this paper will be reproduced and creatively displayed in conspicuous places inside the acupuncture clinic and outside of the clinic. Brochures will be made available at the hospital lobby and near the clinic for interested parties to avail themselves with as they pass by. 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