Planning and marketing health services
Helpm31990
9781284094428_SLID_CH03.pptxChapter 3
The Environment of Marketing Strategy
1
Chapter 3 Learning Objectives
Understand the impact of the five environmental forces on organizational strategy.
Explain how social and economic forces affect marketing strategy.
Describe the impact of technology on health care organizations’ survival and competitive environment.
Know the major regulatory requirements that must be followed when formulating health care marketing strategy.
Introduction
Environmental scanning for potential impact on the organization’s target market is conducted to assess trends in each of the five major environmental forces.
Economic, technological, social, competitive, and regulatory
Then, the health care organization can appropriately adjust its marketing mix strategy.
Learning Objective 1
Five major environmental forces
Economic
Technological
Social
Competitive
Regulatory
Learning Objective 1
Why are these forces important?
Method to continually scan environment
Conducted to assess trends over a period of years
To know what needs to be done to appropriately adjust to the marketing mix strategy
Learning Objective 2
Economic forces
Inflation
Decline in the buying power when price levels rise farther than income
Consumer income
Gross income: Total amount earned by a person or family in 1 year
Disposable income: Amount left after taxes to spend on basic needs
Discretionary income: Amount left after taxes and basic needs for recreation or entertainment
Learning Objective 3
Technology drives the industry.
Impacts health care with improved quality but has cost implications
Impacts information for clinicians and administrative staff
Affects consumer behavior with search on the Web
Transparency has increased due to technology.
Regulatory
Self-motivated
Third parties
Learning Objective 2
Social factors
Demographics
Population—aging population is growing.
Health care organizations responding to aging marketplace
FIGURE 3-11 Population 65 Years Old and Older by Size and Percentage of Total Population
Carrie A. Werner, “The Older Population, 2010 Census Briefs,” United States Census Bureau (November 2011), https://www.census.gov/prod/cen2010/briefs/c2010br-09.pdf
Learning Objective 2
The family
Marriage rates in United States at historic lows
Divorce rates falling except among Boomers
Learning Objective 2
Social factors
Geographic shifts
People are moving west while population in the East remains about the same.
Population increasingly suburban
Learning Objective 2
Social factors (cont.)
Racial and ethnic distinctions
Minority percentage growing
Over 12% foreign born
Learning Objective 2
Social factors (cont.)
Culture
Roles of men and women
More women working outside the home and heads of households
Women more active searchers of health information on the Web
Changing providers
More females are prominent in health care positions (physicians, physician assistants).
Salary disparity exists between male and female clinicians.
Learning Objective 2
Social factors (cont.)
Changing attitudes
Complementary or alternative medicine
Concern for health and fitness
Movement beyond a “sickness” model in health care
FIGURE 3-18 Most Common CAM Therapies Used by Adults
National Center for Complementary and Alternative Medicine, “The Use of Complementary and Alternative Medicine in the United States,” National Institutes of Health (2008),
https://nccih.nih.gov/sites/nccam.nih.gov/files/camuse.pdf
Learning Objective 3
Learning Objective 4
Regulatory factors
Competition
Pricing
Distribution
Promotion
Self-regulation
HIPAA
Learning Objective 4
Competition
Antitrust legislation against monopolies
Clarifications of FTC “safety zones”
Product legislation–trademark protection
Mergers
Herfindahl-Hirshman index
Health care competition
Accountable health plans
International competition
Learning Objective 4
Future of medical tourism
Transparency and reference pricing
Domestic medical tourism
Learning Objective 4
Pricing
Has several regulations that relate to reimbursement
Discounts are allowable.
Price fixing not specifically illegal according to the Sherman Act, but considered illegal overall
Learning Objective 4
Distribution
Exclusive dealing—illegal to require buyer to handle only products of one manufacturer and not competitors
Requirement contracts
Tying arrangements
Learning Objective 4
Promotion
FTC forbids deceptive or misleading advertising and unfair business practices.
FTC can order a company to conduct corrective advertising.
Learning Objective 4
Self-regulation
Gifts must be nominal.
Educational items and patient care items should be used in the marketing process to avoid enticements.
Summary
Marketing strategy must be developed in response to and in concert with the broader macro environment; economic, technological, social, competitive, and regulatory forces can all determine the effectiveness of any organization’s marketing program.
In recent years, the rise in the cost of medical care has slowed. Health care reform, high deductible health care plans, and health savings accounts are alternative insurance forms making consumers view health care as a product to purchase.
Summary (cont.)
Health care is a technologically driven industry. New technological advances dramatically affect the institutions and providers who deliver health care and determine how that care is delivered. The Internet and wireless will dramatically affect how patients interact with their health care providers.
The changing demographics of the U.S. population represent significant opportunities for health care providers. The fast-growing segment of older consumers are major utilizers of health care services and products. Baby boomers are often attracted to alternative medical approaches.
Summary (cont.)
Changing marketplace demographics related to gender, ethnicity, and race require health care providers to be more responsive to the needs and concerns of diverse consumers.
The competitive market can be defined as either a pure competition, a monopolistic competition, an oligopoly, or a monopoly. The differences represent the number of sellers in the marketplace.
Summary (cont.)
The prior movement to managed care is now returning to a fee-for-service market. Inpatient admissions are rising and outpatient surgeries continue to grow.
A wide variety of federal and state regulations exist that affect each aspect of the marketing mix. Mergers and acquisitions have been of great concern for regulators.
The issue of provider referrals is also highly regulated.
HIPAA regulations also impact the marketing activities and communications that can be conducted without a patient’s consent.
