Managing Hospital Marketing Costs in Difficult Times

The last financial year has been a difficult one for most private healthcare services providers in India. The regulatory headwinds related to the capping of prices of stents and knee implants, the extremely negative media campaigns and unruly patient activism have pegged back revenues and dented profits. The Prime Minister has been running a most undignified campaign of his own caricaturing Indian doctors as blood-thirsty parasites out to mistreat patients and highlighting the fact that he has been able to stop the rot through legislative action. In Delhi, the Chief Minister is busy rolling out his pet half-baked schemes and many states have come up with draconian provisions under the so-called Clinical Establishment Acts.

However, all this has left private healthcare providers in a hard place. They are left with no option but to ruthlessly cut costs and scale back some long-term investments. Many are re-working their growth and investment strategy. Marketing budgets are being slashed, head-counts being ” rationalized” and various kinds of harsh cost control measures are being implemented.

Marketing costs and costs related to patient amenities in the hospital are perhaps the easiest to cut. They do not involve the pain let us say of reducing head-counts by handing out pink-slips. They also do not significantly impact patient outcomes.  A few lesser ads in the newspaper and maybe a water-bottle less in the patient room is unlikely to cause too much of pain.

This is also the commonest mistake hospitals make.

Marketing activities and great patient experiences help spread the word around. Brand communication works quietly in pushing a particular hospital in the consideration set of new patients. It helps build perceptions about the quality of care provided by the hospital. It also helps position the hospital as a possible choice whenever the need arises. The messaging has to be continuously reinforced in an unobtrusive manner, gently working on the consumer’s mind, building the desired imagery of the hospital.

In times of turmoil, when an unforgiving media is hellbent on creating issues where none may exist and when politicians are vying with each other in demonizing a reasonably well-working system the marketing communications put out by the hospital assumes greater significance. Patient stories in the form of nicely crafted testimonial ads can go a long way in reassuring new patients. Announcement ads related to the induction of new technology and equipment can inform patients about new choices available to them. A digital marketing campaign can help patients access the hospital services with greater convenience. A well-executed community outreach program can allow the hospital to enroll patients in long-term relationship programs, binding them together with the hospital.

Great patient experiences also work in a similar manner. Satisfied and happy patients are the finest brand ambassadors. Their credibility based on their own experiences counts for a lot more than any advertising would ever do. It is also foolish to assume that patients will not notice small things, which quietly disappear when stiff cost programs are executed. That nice friendly GDA who takes the wheel-chair, the missing dessert in the meals, the fraying blanket or the worn upholstery on the attendant’s sofa in the patient’s room will always be noticed. Discerning patients will be able to see through these ”small” compromises and will definitely talk about them. This kind of talk is extremely detrimental to the brand equity of the hospital and is almost always impossible to fix later on.

Many years ago I had learned that there is usually a cost associated with cutting cost. Sadly, sometimes this cost is not visible at least in the short run. One has to be very careful while taking drastic cost decisions particularly when they look easy or simple. They often are not. The costs thus cut, have a way of coming back and hitting hard in the future. Marketing and patient experience costs usually return with a much greater vengeance and that too in the not so distant future.

So, what should hospitals do in difficult times such as these?

While they knuckle down to protect their meager profits, they should avoid knee-jerk cost action at least in these two areas. If anything, they should further reinforce their communication and patient experiences to ride out the storms.

The views expressed are personal

 

 

 

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