Finally, there's some good news for hospital marketing departments.
Total spending on hospital marketing rose 12% to $1.81 billion in 1993, according to data compiled by Quality Expectations, a healthcare marketing firm in Evanston, Ill. By comparison, hospitals' total advertising jumped 27% to $768 million.
In addition, the average marketing budget for hospitals climbed to $376,200 last year, up 12.6% from $334,250 in 1992. Advertising remained a significant component of hospital marketing-on average, it represented 43% of a hospital's marketing budget in 1993, the study said.
The results are welcome news for marketers. The redesign of healthcare delivery to meet the expected form of reform recently has called into question the spending habits of many hospitals, specifically aggressive marketing efforts by not-for-profit facilities (Oct. 4, 1993, p. 60).
The increased spending on hospital marketing found by the Quality Expectations survey also seems to contradict earlier studies that questioned the value of hospital marketing and concluded that their marketing departments generally are ineffective and rarely contribute to improving hospitals' market shares, occupancy rates or profits (Oct. 18, 1993, p. 44).
As a result, many hospital marketing departments have been cut back, merged or experienced other cost-cutting measures.
However, marketing and advertising have rebounded significantly from their lows in 1992, said Steven Steiber, president of Quality Expectations. And if the numbers are indicative of marketing activity, marketers will have a lot on their plates this year.
"There still is a nominal upward trend that suggests that, in 1994, things will coalesce around new marketing activities," Mr. Steiber said. "More attention will be paid to the customer . . . patients, physicians and employers. Marketers are adding fuel to that fire."
While the growth for both advertising and marketing have been uneven, the net average annual increase for marketing spending by hospitals throughout the first years of the 1990s is about 8%, he said.
Most marketing growth appears to be occurring at larger hospitals that have been enlarging through affiliations and acquisitions. By contrast, smaller hospitals are having more problems coping with the changes that reform efforts are bringing about, he said.
The survey was based on telephone interviews with 200 marketing executives in hospitals with more than 50 beds. The margin of error is plus or minus 6.9 percentage points.
Also in the study, 75% of hospital marketers report directly to the chief executive officer, compared with 74% in 1992.
Mr. Steiber said he believes that much of what will define the future role of marketing will come from Washington and the Clinton administration's healthcare reform proposal, as well as from local markets.
However, more than basic market demand will affect marketing decisions in the upcoming year, Mr. Steiber said. Community need will continue to force marketers to develop cost-effective methods for delivering their message.
Despite marketers' diverse responsibilities, most continue to target most of their efforts toward the consumer market, the study said. Approximately 61% said public relations was their main duty.