Marketing of Cancer Services Must Include All Payer Modalities

August 1, 1996

SAN DIEGO--Today when almost all payment and delivery models co-exist in every market, marketing approaches to cancer care services must respond to all payer models, including managed care and fee-for-service, said Karen M. Gilden, a senior consulting associate with Oncol-ogy Associates, Inc., Warrenton, Va, and the editor of Cancer Management.

SAN DIEGO--Today when almost all payment and delivery models co-existin every market, marketing approaches to cancer care servicesmust respond to all payer models, including managed care and fee-for-service,said Karen M. Gilden, a senior consulting associate with Oncol-ogyAssociates, Inc., Warrenton, Va, and the editor of Cancer Management.

"One of the biggest challenges of health care marketing todayis stretching marketing budgets to meet the different buying modelspresented by the 'old' payment system as well as the new managedcare model," she said at a symposium sponsored by the Societyfor Ambulatory Care Professionals and Health Technology Assessmentof the American Hospital Association.

"Some experts say that when 30% of employers in your areaare operating on capitated contracts, it is time to switch marketingstrategies from the old environment to the new," Ms. Gildensaid, citing Terrence Rynne's work Healthcare Marketing inTransition.

She acknowledged that this approach begs the obvious question:Is there a role for marketing to consumers in a true managed careenvironment? After all, if everyone is locked into a set of providers,to whom would you market? Ms. Gilden insists that marketing remainsimportant, citing the work of Eric Berkowitz, a marketing expertat the University of Massachusetts, Amherst, and the author ofthe 1996 book Essentials of Healthcare Marketing.

"Berkowitz believes that, eventually, all surviving systemsand all providers will once again be open to all users. The operativeword here is 'surviving,'" Ms. Gilden said. Berkowitz notesthat employers are increasingly edgy about restricting choice,since workers believe that quality comes with choice. Consequently,the current environment of limited choices is probably going tobe a transitional phenomenon.

What Consumers Want

If managed care isn't a significant portion of an institution'sbusiness, marketers need to keep in mind how individual consumerschoose a hospital. In his latest book, Rynne lists the most importantconsumer criterion as the perception of quality physicians onstaff.

Other important factors, according to marketing research, Ms.Gilden said, are "good care," quality nurses, reputationfor providing highly specialized services and care of the verysick, high-tech equipment, modern facilities, a teaching mission,innovative recognized leadership, working for a community's greatergood, and an identification with the community's movers and shakers.

Marketers also need to understand the mindset of the aging BabyBoomers, who represent oncology's future customers. These boomers,Ms. Gilden predicted, "won't accept less aggressive cancertreatment just because managed care is managing their options."Boomers have a history of activism. "If society threatenstheir lives, they will fight back against society's establishedrules," she said.

Hospital marketers will have an easier time promoting an institutionif the hospital develops a true "integrated system"of health care services rather than one in name only, she said(see the table for other factors that can make a hospital moremarketable).

Marketers also need to keep in mind the positive feelings--orhalo effect--a good cancer program can create in the community.Marketing research shows that fields with a strong halo effectinclude cardiology, neurosurgery, oncology, and obstetrics, shesaid.

For example, if a hospital's cardiology service enjoys an excellentreputation, then a potential customer may assume that the institution'sother services also provide excellent care.

"Some experts believe that oncology will overtake neurosurgeryas a highly visible service line sometime in the next 20 years,"Ms. Gilden commented, "particularly if promising treatmentad-vances begin to mitigate the public's perception that a diagnosisof cancer means certain death."

Factors That Give Hospitals An Edge in Marketing

Based on a speech by Eric Berkowitz.