Hospitals Rely on Marketing for Good Health : Economics: Officials say increased competition is forcing hospitals to find niches that attract more insured, paying patients.
Los Robles Regional Medical Center in Thousand Oaks recently invited reporters to watch as a surgeon slit open a patient’s chest. It was part of an effort to drum up publicity and business for the hospital’s open-heart surgery program.
About the same time, Pleasant Valley Hospital in Camarillo went the low-tech route. Touting its use of leeches to unclog veins, the hospital latched onto a publicity bonanza aimed at improving its image--and profitability.
This month, Pleasant Valley opened a center for neurological injuries--not because it gets many nerve-damage cases, but because it needs to fill beds--and no other hospital in the area has such a unit.
Simi Valley Adventist Hospital was so desperate for patients a few years ago that it made illegal loans to lure physicians to the area and increase business at the hospital, according to a county grand jury. Management has changed since then, but the hospital is still striving to boost its patient load, a spokeswoman said.
Marketing--the art of spotting a need and filling it, packaging a product and selling it--has become increasingly important to the economic survival of Ventura County’s eight major hospitals.
“We’re having to look a lot more for niches,” said Monty Clark, director of the Ventura County office of the Hospital Council of Southern California. “Let’s call it competition, because that’s what it is.”
Several factors have combined to create the more competitive environment.
For one thing, the typical patient is spending less time in the hospital, thanks to closer scrutiny by government and by insurance companies as well as advances in outpatient treatment. Nationally, the average hospital stay was 7.2 days in 1987--a full day shorter than in 1970, according to the American Hospital Assn.
In Ventura County last year, barely half of the 1,184 licensed acute-care hospital beds were occupied on an average day, according to state figures.
Just as important as filling beds, however, is getting the right type of patient. Ventura County hospitals strive to attract insured, paying customers to offset losses from uninsured patients and inadequate reimbursements from the Medi-Cal and Medicare programs.
“What you have is a competitive environment, with hospitals going after the privately insured patients,” said Lori Aldrete, vice president of communications for the California Assn. of Hospitals. “The marketing you see is geared to attracting private, paying patients who help subsidize the losses.”
Less than a decade ago, Aldrete said, marketing was not part of the industry. “If the hospital had anybody, he was usually called the community relations director whose main function was to hold community events like health fairs and hospital tours--very warm and fuzzy stuff.”
Today, presenting a warm and caring image to prospective patients is only one of the elements in a successful marketing program, hospital officials say. Just as important, they say, are finding a niche in a changing medical marketplace and meeting the needs of physicians and insurance companies.
For smaller hospitals such as Pleasant Valley (81 acute-care beds), Ojai Valley Community (71) and Santa Paula Memorial (60), finding a niche is easy: They provide basic hospital services to a limited geographic area.
Pleasant Valley considers Camarillo, Somis and Moorpark as its service area. Santa Paula Memorial draws from Santa Paula, Fillmore, Piru and Saticoy. Ojai Valley’s name defines its territory. Marketing efforts of all three hospitals are designed to attract nearby residents who need emergency treatment, maternity care, and the more routine types of diagnosis and surgery.
“Most of the things people go to a hospital for, we can take care of here,” said Sheryl Rudie, a Pleasant Valley spokeswoman.
But Pleasant Valley also is licensed for 99 long-term-care beds, many of which are often empty. So this month the hospital carved out a new niche for itself with the opening of a 12-bed unit for patients with head and other neurological injuries.
As a hospital news release noted, it’s the only unit of its kind between San Luis Obispo and the San Fernando Valley. “If you can find a program that fills a need, that you can get reimbursed for, and you can better utilize the space you have, it’s a win-win situation,” said Joe Harrington, assistant administrator at Pleasant Valley.
The county-owned Ventura County Medical Center has its niche defined by state law: to be the “provider of last resort” for indigent patients. But officials there try to attract paying customers to balance the patient mix--and the ledgers.
More than half of the patients at the 180-bed hospital are on the Medi-Cal program, another 10% are on Medicare and about 20% have no insurance, said Phil Wessels, director of the county’s Health Care Agency.
To attract insured patients, Wessels said, the hospital tries to counter its image as the “county hospital” for the poor. A few years ago, it changed its name from Ventura County General Hospital in an effort to enhance its image.
“We want to make the community aware that we’re not just for indigents,” Wessels said. “We have a lot of specialized services.”
As the county’s only teaching hospital, Wessels said, Ventura County Medical Center attracts physicians who want to learn the latest techniques from specialists with the UCLA School of Medicine, which is affiliated with the hospital. But as a county agency, the hospital has no public relations budget, he said. It doesn’t even have an ad in the Yellow Pages.
By contrast, marketing and public relations are major activities at the county’s other large hospitals: St. John’s Regional Medical Center in Oxnard (257 beds); Los Robles (228); Community Memorial Hospital in Ventura (192); and Simi Valley Adventist (115).
In marketing itself to the public, St. John’s emphasizes its affiliation with the Sisters of Mercy. One of six sisters at the hospital visits almost every patient at least once, said Trish Bartel, St. John’s director of marketing. The hospital also sends out a newsletter to 89,000 residences, promoting services such as its emergency room, women’s services, oncology and open-heart surgery.
Earlier this year, St. John’s purchased nearby Channel Islands Community Hospital and turned it into an outpatient center. With the recent conversion of Anacapa Adventist Hospital to substance-abuse treatment, St. John’s became the only full-service hospital in the Oxnard-Port Hueneme area.
St. John’s faces tough competition, however, in high-tech fields such as open-heart surgery, primarily from Community Memorial just six miles away, but also from Los Robles.
“You need a certain amount of surgeries to maintain credibility,” said an official at another hospital who asked for anonymity. “There are a finite number of open-heart surgeries per year in this county. Split among three hospitals, each may end up with barely enough.”
Los Robles spokeswoman Kathy Flaherty said its open-heart program feels some heat from St. John’s, which is planning a major expansion of its cardiology unit. But Los Robles’ main competitors for open-heart patients are hospitals in Los Angeles County, Flaherty said, because many Thousand Oaks residents work in Los Angeles or used to live there.
Los Robles’ marketing efforts address that problem.
“Heart patients don’t have to travel to Los Angeles County for the ‘best’ physicians and treatment,” a recent Los Robles press release proclaimed, noting that local patients can have family members “only minutes away during a most critical time.”
“Research also proves that such a psychological edge promotes faster recovery!” the release added.
Community Memorial considers the county hospital, only two blocks away, to be its main competitor in the city of Ventura, spokesman Michael Lurie said. In 1985, Community Memorial added an emergency room to its service in part because it was losing prospective patients to the county hospital, Lurie said.
But a more basic reason, he said, was the need to be a full-service hospital, both to satisfy physicians and to get insurance company contracts. Without an emergency room, he said, health maintenance organizations and other insurance companies would not include Community Memorial among their approved hospitals.
“It really goes to trying to serve the market,” Lurie said. “In this case, the market is insurance companies. They pay the bills. We have to adapt to meet their needs.”
Hospital marketers say they constantly face the question of how to allocate their efforts among the public, physicians and insurance companies.
“There’s still some controversy over how much advertising to the public makes sense for a hospital,” Lurie said.
He said Community Memorial promotes its emergency room in radio ad testimonials, partly because it is a new service and partly because the patient usually decides which emergency room to use.
Like most Ventura County hospitals, Community Memorial also promotes its obstetrics facilities directly to the public.
“Families have nine months to decide, so they do shop around,” Lurie said. “For open-heart surgery, it’s less clear-cut that you would want to advertise.”
By adding high-tech procedures, hospitals may enhance their image with the public, but the real purpose is to satisfy physicians, officials say.
“Even though patients come in for some things, most things are physician-referred,” said Aldrete of the state hospital association.
Ashby at the county medical center agreed. “Clearly hospitals compete for the favor of physicians in the community,” he said.
To attract physicians--and through them, more patients--hospitals often do more subtle things than provide the latest diagnostic and surgical equipment. Some, such as Los Robles, have lots of professional office space available in nearby buildings. Others provide doctors with a free paging service or a separate dining room in the hospital cafeteria. Some provide a list of staff physicians to emergency room patients who have no regular physician.
“Every hospital has a certain core group of physicians that consider that hospital ‘their’ hospital,” said Dr. Richard Ashby, director of physician service at Ventura County Medical Center. “Hospitals are always trying to solidify that.”
A county grand jury in June accused Simi Valley Adventist of violating state law by making hundreds of thousands of dollars in non-repayable loans and providing low-priced space and equipment to physicians in exchange for referring patients to the hospital.
Tim Patten, a hospital vice president, blamed the practice on the hospital’s former administration. The hospital, however, still makes loans of up to $100,000 to help needed specialists locate in Simi Valley. The physicians are not required to send patients to the hospital, he said.
