Regaining Market Share for Small City and Rural Hospitals

Big hospitals know the power of brand. Given the intimate and highly individualized nature of healthcare decision making, big hospital marketing departments know that brand plays a key role in capturing market share from other hospitals, particularly smaller hospitals. That’s why they spend millions of dollars annually in advertising directly to prospective patients, re-positioning their brand as safer, better, faster, and more high quality.

The result? This belief emerges: “Larger means better.” In recent years, conventional wisdom has stated that prospective patients in search of quality healthcare will drive right past their local, smaller hospital to endure the maze of admissions, testing and treatments available at much larger hospitals in major urban areas. Even though it may be highly inconvenient, prospective patients were thought to undergo this additional travel because of the belief in the brand that they would receive “better treatment,” or a higher and safer quality of treatment.

Thanks to a recent study by BlueCross Blue Shield in Tennessee, this “conventional wisdom” is now confirmed as fact. Despite the fact that prospective patients can receive equal—even possibly better—care at their local small or rural hospital, they will speed right past the local hospital parking lot and on to the Interstate or major state road to a major urban area.

As the study shows: “In simple terms, almost half of the people in rural areas are not using the hospital closest to them, preferring to go to a larger, non-rural hospital to get care, even if the same services are available locally.” [emphasis in the original]

The irony? In many cases, smaller hospitals are safer than larger hospitals. They often have lower rates of post-treatment infections or incorrect prescription administration. Smaller hospitals also typically offer more personalized care and follow-up than is available in a much larger hospital setting.

How can smaller hospitals compete? It can be argued that prospective patients make the decision to go to a larger hospital because of 1) established brand and perceived value of the larger hospital, and 2) anxiety/fear that they will receive sub-standard treatment options at a local, smaller facility.

The antidote? Many smaller hospitals have receive national or regional positive rankings for patient satisfaction or high quality care. Unfortunately, they often don’t tell anyone, leaving the impact of this critical differentiating element to be delivered by the local hospital newsletter. MEK has won a number of awards for healthcare marketing, so to reclaim the market share that they may be losing, we recommend that smaller hospitals would be well served to strategically consider:

•  How to positively differentiate themselves from their larger competing hospitals in terms of quality care, patient satisfaction and treatment options
•  How to secure local testimonials from satisfied patients and create digital word-of-mouth opportunities
•  How to place “how to” articles through targeted public relations that help local citizens and also profile the expertise of physicians, nurses and medical professionals associated with the hospital
•  How to develop an effective marketing plan that touches and promotes key practice areas that are equal to or better than what is available in major urban medical centers

Many smaller or rural hospitals offer superior services. To compete and regain lost market share, smaller hospitals must consider the power of brand that their larger cousins already understand.

By Michael Snyder, Managing Principal