A good name is rather to be chosen than great riches.-Proverbs 22: 1
Healthcare providers, as they approach a new millennium under the banner of reform, would certainly agree with those words written more than two millennia ago. For many providers, a good name is translating into great riches in the marketplace.
Institutional image has emerged as the key to success in network formation and in integrated health systems marketing. No longer the frosting on the cake, image is the cake itself. Providers with less than stellar images are labeled undesirable partners. On the other hand, those with strong reputations have a clear edge in contracting with purchasers and being the "provider of choice" in health plans.
For purchasers and consumers who must choose from myriad competing integrated delivery systems, institutional image is often the only discernible difference among providers. All systems will feature managed care and a full array of primary-care and specialty services offering "one-stop shopping." Hospitals will no longer compete via product lines such as obstetrics or cancer care, but rather as fully evolved integrated care systems. The whole truly will be more than the sum of its parts.
Since managed-care programs will force most of the delivery systems in a given marketplace to be competitive on price, perceived quality-an institution's image-will be the tie-breaker in the choice of delivery systems or health plans. Already the value of a blue-chip image is apparent. For example, Dallas Medical Resource, a consortium of nine leading academic medical centers, has been able to win major corporate contracts because of cost savings and the recognized quality of its providers.
Even payers are seeing the importance of image in awarding contracts. Aetna is the big winner in the Health Insurance Plan of California, a state purchasing cooperative comprising 22 payers. Despite the perception of being one of the higher-priced insurers, Aetna has won 70% of the contracts to date, due largely to its name equity.
It's hard to overstate the value of a name. Consider the Mayo Clinic. The name evokes state-of-the-art healthcare, so much so that providers such as Universal Health Services and Health Management Associates are trying to borrow a little Mayo cachet by electing former Mayo officers to their boards.
Image management.In spite of the elusive nature of "image," it is an entity that can be defined, and, more importantly, managed. The image of any organization is simply the sum total of the public's perceptions. These perceptions form a complex mosaic composed of everything from direct experience, word of mouth, news media reports, an organization's advertising, and even its signage and the appearance of its buildings. All these factors blend with a history of service that creates a "community memory" of an institution that's the foundation of its image.
All images are deserved in that they are based on perceptions. If the perceptions don't square with reality, it's the fault of the organization for not effectively communicating its attributes. Good institutional images are rarely accidental. They evolve over time through focused attention on quality and proactive communications that tell the organization's story.
An institutional image is not like an edifice, which once built has a degree of permanence. Images are much more ephemeral and will dissipate without active cultivation. Maintaining an image is every bit as important as building one.
The tools for maintenance are public relations, advertising and other communications vehicles. Research is the critical diagnostic tool that allows an organization to assess public perceptions and attitudes. Without knowing what the public thinks, remedies cannot be applied to an image malady. Image maintenance is crucial because the marketplace abhors a communications vacuum. It is an axiom in marketing that if you don't define yourself, your competitors will.
While crises can harm any organization's image, the best defense in a crisis is a good community image. Those with solid images are much more able to sustain a blow without suffering long-term damage. They can draw on the goodwill garnered over the years.
If goodwill is lacking, rebuilding the image can be a daunting task. The root cause of the crisis must be addressed and rectified so the "spin doctors" can repair the damage. One hospital in the Southeast changed its name after a series of crises culminated in the resignation of the CEO and board chairman. Even with a new name and a few years of aggressive marketing, perceptions of the hospital remain negative. The facility can't shake the residue of its past because each public stumble is a reminder to people of the old crises. Marketing messages are only believed when the words match the deeds.
New tools. Image management always has been key to the success of an organization, but it has taken on new urgency for healthcare providers in the milieu of reform. In spite of the new-found importance of institutional image, many providers have not adapted their marketing programs to this reality.
The product-line advertising wars of the 1980s are over. Hospital advertising budgets have markedly declined since 1990 while overall spending on marketing has increased. The importance of image management will reshape healthcare marketing in the following ways:
Image advertising, including advertorials and public service ads, will replace productline advertising.
Public relations vehicles will move to the forefront of the marketing mix because of the importance of the news media and other "third party" endorsers in shaping image.
Community relations will gain priority attention from providers, particularly not-for-profits, which must prove value to their communities to maintain tax-exempt status.
Issues management will give organizations an opportunity to showcase leadership in their communities and on national issues.
Institutional image, however, transcends the role of marketers. The chief executive officer is ultimately keeper of the image flame, and he or she must make sure the image is effectively managed. This means playing a personal role in spearheading major initiatives and being available to the news media. As the "face" of an organization, the CEO must work to stay visible.
Effective image management will show up on the bottom line, but CEOs must pay the same attention to image as they do to profit margins. If you have the former, you will very likely have the latter in the reform-driven environment of healthcare today.