Hospital-to-hospital integration took a back seat in 1995 as hospitals sought to strengthen vertical links with physicians, according to a recent survey of hospital marketers.
Of all marketing functions, physician-hospital relationships saw the greatest increase in activity. About 72% of marketers reported somewhat or a great deal more emphasis on linkages such as physician-hospital organizations.
Moreover, 46% of marketers reported more activity in physician acquisitions, compared with 39% a year earlier.
"We're seeing an inexorable push toward relationships of a vertical sort," said Steven R. Steiber, president of Evanston, Ill.-based Quality Expectations, a healthcare market research and consulting firm.
The firm's annual National Hospital Marketers Survey of 202 hospital marketing executives, randomized by hospital bed count and geography, included hospitals with 50 or more beds.
All in all, more money is flowing to hospital marketing-$2.3 billion nationwide-than ever before in the 12-year history of the survey. But marketing departments also have more responsibilities than ever.
Hospital networks stagnate. Last year saw no growth in hospital networks or systems. Fifteen percent of marketers reported an increase in hospital acquisitions last year-almost the same number (11%) that reported a decline.
In looser relations such as hospital alliances, 56% of marketers reported an increase, about the same percentage as the previous year.
"The size of a typical network is still about 10 facilities," Steiber said.
Ad spending swells. Total nationwide advertising expenditures exceeded the billion-dollar mark for the first time, reaching $1.2 billion. It's unclear whether that increase is a fluke or a real trend, Steiber said.
The average hospital spent $243,100 on advertising in 1995, up from $175,671 a year earlier. The average marketing budget was $458,400, up from $364,477.
Previous highs were $186,700 for advertising in 1990 and $439,900 for marketing in 1991.
The survey indicates large institutional hubs at the centers of most systems could be fueling the spending surge. Advertising expenditures averaged $779,200-nearly three times the national average-at facilities with more than 500 beds.
In contrast, hospitals with fewer than 100 beds spent about $73,180 on ads.
Print ads are taking a slightly smaller chunk of the advertising pie, while slightly more went to direct mail, which offers a targeted approach and fosters the "relationship marketing" approach being adopted at some hospitals.
Physician linkages gain emphasis. Physicians and hospitals are sharing increasingly close relationships. To better accommodate physician needs, nearly 58% of hospitals have a formal department for physician services or physician networks. These departments vary widely in function, but increasingly are moving from basic practice supports to more formal relationships such as managed-care contracting, Steiber said.
Providers with fewer than 100 beds are least likely to report such a program (41%), and those with 300 to 499 beds are most likely to do so (89%).
Notably, 69% of for-profit hospitals have a physician services department, compared with 56% of not-for-profits.
Customer satisfaction is key. With employers and insurers demanding more data, patient-satisfaction monitoring continued to grow dramatically in 1995, with nearly 70% of marketers reporting more activity on that front.
Predictably, government relations and issues management were de-emphasized in the wake of government-based reform efforts.
Pay climbs. Marketing executives are earning more for their enhanced duties. They reported an average annual salary of $52,610 including benefits in 1995, a 6% increase from 1994. Those in facilities with more than 500 beds received an average of $84,640.
Marketing executives also in charge of planning received an extra $5,180 on average.
Data indicated that the big money in for-profit hospital marketing is at the corporate office, not in the hospitals.
Marketers at for-profit hospitals earned $47,800, compared with $53,390 for their counterparts at not-for-profit hospitals. Of the more than 5% of marketers who earned six figures, none worked inside a for-profit hospital.