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Marketing of Hospitals in the Modern Era

Vivek Shukla

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India is witnessing an era where new hospitals are being built at a pace like never before. There are exciting challenges that these hospitals are facing while they are being commissioned. One daunting task that every hospital, new or old, small or big, is facing today is the task of marketing itself. I have spoken to countless doctors, who own hospitals, about their marketing strategies. It is rather unfortunate that almost all these doctors had a dismal marketing strategy, if indeed they had one. For the most part, they were not even aware that a marketing strategy needs to be crafted. What pains me is the fact that millions are spent upon creating a product called a hospital and so little is done to promote them in a professional manner. The people who offer this product are very well trained in their profession. But what is pitiable is the way this product called ‘hospital’ is packaged and marketed. For those of you who are not clear as to how the hospitals are marketed, here is a glimpse:

Referrals

There is an attempt from hospitals to generate referrals from the Registered Medical Practitioners (RMPs). The hospitals appoint Public Relation Officers (PROs) for the purpose. The job of the PRO is to visit these RMPs every day and ‘lure’ them into referring patients. I wonder who was the first person to come out with this shoddy idea of luring people with money or other
freebies for sending patients. This is a bad marketing strategy. The simple reason being that once a hospital starts indulging in what is called ‘cut practice’, its competitors will not be far behind to follow suit. They want to lure the RMP with more money. The RMP becomes a pursued commodity
who has to be won over at any cost. Commissions, free gifts, dinner and liquor in the name of CMEs and others are offered on a platter to the RMP sitting in a shady clinic in the outskirts of the city or in the villages.
Yes, we all know that it is not legal to offer commissions for soliciting patients. But let’s face it, the cut practice is still rampant.Coming back to the RMP, all of a sudden, he is made to feel very important. He has discovered a way to make a quick buck. All he has to do is coax a patient to
get surgery done (even if it is not required). Once the patient consents, the RMP rushes to the town to bargain for the ‘best price’ for his newly acquired scapegoat. Now, looking at the strategic business implications of this strategy of alluring RMPs, the hospitals have dug a grave for themselves. All of them are dependent on outsourcing patients. The source that they depend
upon is greedy and has no loyalty. Whatever anyone might say, hospitals have ended up on the losing side of the bargain and the RMPs have pulled the tide in their favour. The profit margins are going down even as I am writing this article. The naive hospital owners have shot themselves in the foot.

Lowering Prices

This is another amateur business strategy. The logic goes-‘We are both physicians with same skills and if I offer my services at a lower price, I will get more clients.’ Why do not the multi nationals learn from these new-found strategists? Why does not Pepsi reduce the
price of its bottle by Rs 2 and spell doomsday for Coke? Going by the same logic, Sony can overthrow Samsung in a month. Thinking the other way round, why does Pepsi not lower its prices? It is because if Pepsi starts this trend, the competitor will follow suit. Do you think Coke will stay silent if Pepsi reduces the price of its 300 ml bottle by Rs 2? Of course not. The result will be that both the players will have shrunken profit margins. This may further result in compromising the quality of both the products. It does make sense if Apollo hospital charges more for a normal delivery than a small town clinic where only one MBBS doctor sits. That is justifiable. But two similar competitors indulging in a price war and shrinking each others’ margins is sheer foolhardy. This brings us to the million rupee question called how to market a hospital in a professional and ethical way?


Vivek Shukla
Healthcare Marketing Consultant
Sai Mahima Hospital, Ram Nagar,
Dharamshala H.P. 176215
India
Phone +91-9816086868
[email protected] Phone +91-9816086868

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