The Georgia Scroll
January 1998
Marketing in a
Transitioning Suburban Community:
A CFO’s Perspective
By: Frank Powell, FHFMA, CPA,
Vice President and Chief Financial Officer
Henry Medical Center, Inc.
In today’s health care environment, resources are scarce and there must be an attempt to reach a balance organizationally for the allocation of those resources. The marketing agenda can get buried, especially in light of declining reimbursement and increased administrative cost associated with compliance and managed care issues.
A CFO can support the market-orientation of a hospital or assist in its demise. A wise CFO will take advantage of the finer points of the marketing initiative in the health care system. There is more "bang for the buck" when measures are taken that incorporate a broad view of the marketing emphasis in your system. Unfortunately a myriad of other projects tend to rob from the CFO’s attention to the market agenda.
Henry Medical Center, Inc. (HMC) is in a county transitioning from a rural to suburban locale on the fringes of the Atlanta metropolitan area. Henry County is the sixth fastest growing county in the nation. The community has watched its small original hospital facility, built 18 years ago, grow to provide an extensive menu of services offered by a general acute care medical center. This includes an expanded outpatient services area that provides surgery, an endoscopy suite with video capabilities, diagnostics that encompass a fixed site MRI, CT scan, ultrasound, nuclear medicine, cardiac catherization and a full service lab, a level two neonatal intensive care nursery, as well as a level three trauma center. Women’s services through maternity care and our Breast Center has been a niche well suited to our demographics. HMC faces the growth pains of a new hospital on the edge of a major metropolitan market.
Since its inception, the marketing department has focused its efforts on changing community perceptions and allegiance from larger, downtown facilities to its community hospital. Participating as CFO in the marketing initiatives of HMC has proven to be an adventure.
As CFO of this hospital, I enjoy a good working relationship with the marketing director. I have input as to which services are marketed and we agree on the annual marketing budget. Numerous projects have been addressed from vision to marketing and final implementation. Fortunately the marketing director has a strong sense for finance which makes for a compatible team.
Recently, we worked together with the directors of perioperative services and radiology to forecast utilization and financial analysis for a new technology called ABBI, an innovative stereotactic breast biopsy instrumentation. The hospital had the opportunity to become the first in the state to offer the technology. It was understood that the new service probably would not generate a significant volume for some time, however, the decision was made to purchase the equipment and offer the service because of image enhancement possibilities. In other words, this decision was not supported by any return on investment calculation, at least not in the direct sense. It was based on the "hi-tech" image that it would add to our existing women’s services. Marketing efforts for the Breast Center, which includes mammography, ABBI, scinti-mammography, and ultrasound, were increased, resulting in a 23 percent increase in the number of mammograms over the prior year. The number of ABBI’s are increasing proportionately as the number of mammograms increase.
It is important to realize that marketing is not just the responsibility of individuals with a marketing title. Marketing activities involve everyone employed by the hospital. At our hospital, management has endorsed the vision statement "Quality is Our Vital Sign". We wear it on our identification badges and hopefully on our faces. To put some teeth into this vision, money is allocated in the budget for a team incentive program for all employees, which incorporates patient satisfaction survey results. The hospital solicits patient satisfaction surveys from inpatients, outpatients, and emergency room patients. Each employee is involved in marketing the hospital through his/her job function, even if it’s just physically taking a patient to a service area in the hospital rather than pointing and giving directions. All participate in making the customer feel valued and at ease. If the Medical Center does not achieve the board-approved goal in patient satisfaction, the employees forfeit this part of their incentive.
Customer satisfaction extends beyond the patients. Positive interaction must take place with physicians, employers, and managed care payers. With my traditional tie to medical records, registration functions, and managed care, I try to foster positive communication with constituents. Issues such as ease to access for the physician and his office staff is an area we constantly try to enhance. Through our managed care newsletter, we disseminate information on managed care plans to physicians. This is vital to maintaining and increasing market share. The Medical Center stresses the importance of tactful and professional communication with the managed care payers when problems are presented: even when the maze and bureaucracy that is often presented by precertifications and payment would cause any normal person to be less than professional.
It’s quite apparent that in today’s market, cost is the focus. This focus is likely to shift as the customer adds quality to the equation. All hospitals are either capturing key indicators or developing those indicators that we think are important to the employer and consumer. We monitor our weaknesses and strengths and use them to our advantage in our marketing efforts. Through the Internet and other technological advances, this data is increasingly available to the public.
Many of my peers believe that managed care payers dictate where a patient receives services. I agree with that statement and have personal experiences to support it. However, in the short run there is still a fee-for-service book of business left on the table and the managed care patient still has a choice among approved providers. Until capitation is strong in the market, I will support the hospital’s current marketing efforts to capture that remaining discretionary business. I believe that the customer-friendly hospital will be successful over the long term.
Community education’s contribution to the bottom line is hard to measure. HMC supports numerous outreach efforts in the community it serves. Health fairs, health status screenings, diabetes education, arthritis self-help, prepared childbirth classes, and free foot clinics are only a few of the offerings that support our mission ‘to maintain and strengthen our leadership position in the operation of a patient-oriented institution for the delivery of quality, cost-effective health care and to promote an atmosphere of wellness and preventative medicine to the community we serve’. Marketing is beginning to focus on wellness and disease prevention through community collaboration. It is apparent to me that exposure in the community and some real life examples of early detection of disease are the best publicity a hospital can receive, not to mention the future goodwill of the patient.
Administration meets regularly with an advisory committee, which creates a forum for valuable feedback. Customer service issues in need of attention that surface in these meetings are immediately addressed. Members of this committee feel valued and are one of our greatest ties to the community.
At this point, Henry Medical Center has limited investment in sophisticated market management systems such as referral teleservices, marketing databases and performance measurement capabilities. However, I believe our future will include marketing management systems that enhance our ability to build relationships with our customers and incorporate quality into the equation. We take advantage of the current resources we have in the form of internal and external databases. We utilize our employees, our greatest marketing asset, and promote the comfortable community hospital that cares and offers a quality service. Our customers appreciate what we have to offer.