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Marketing of Employed Doctors Is All Over the Map; Strategies to Keep Abreast of the Scramble and Get It Right

Featured Article from Strategic Health Care Marketing

by Michele von Dambrowski

“The growth of employed physicians has occurred so fast in some systems that … it has outstripped the ability of the marketing department to keep up,” says David Marlowe, principal of consulting firm Strategic Marketing Concepts in Ellicott City, MD. Marlowe’s observation comes in part from a qualitative “convenience” survey that he and Kriss Barlow, a principal with consulting firm Barlow/McCarthy, conducted recently.

Marlowe and Barlow interviewed representatives of 21 client and colleague organizations of varying size and number of physicians they employed – anywhere from less than 25 doctors to more than 1,000. “There [was] no consistent pattern” in their approach to marketing, Marlowe told attendees of the annual conference of the Society for Healthcare Strategy & Market Development held in Philadelphia in September.

In total, the organizations employed more than 6,800 doctors, including care extenders such as nurse practitioners. The majority of participants reported, somewhat unexpectedly, having a higher percentage of specialists than primary care physicians. Half of the organizations reported having a single employed group brand identity. In the case of the other half, “the marketer was desperately trying to get” a single system name, says Barlow, who commented during Marlowe’s presentation.

Less than one-third of the organizations stated they had marketing staff dedicated to employed doctors. Almost half had a dedicated marketing budget, with the remainder stating that dollars for marketing employed physicians was part of the overall marketing budget. The budget range per physician was huge, says Marlowe, from a paltry $55 to a princely $8,333.

Drawing on a 32-year career as a practitioner and consultant in health care marketing and planning, Marlowe also provided advice on how marketers can have a significant, positive impact in supporting employed physician groups and protecting their organization’s investment.

Understand practices

Given that hospitals are frequently criticized for not knowing how to run physician practices, Marlowe says, how can they be expected to know how to market them? Since there aren’t many role models for medical practice marketing, hospital and health system marketers need to spend time with doctors and practice administrators, attend Medical Group Management Association programs, and do other research and reading. “There’s a culture, and nuance, to practices that you must understand before you can effectively market them,” Marlowe states. Most practices are small businesses, he adds, and they run accordingly.

Getting inside the heads of physicians is also critical, such as realizing the emotional implications for doctors who cede control of their practices. Marketers also must grasp that their own job can involve more tactical thinking.

Critically, marketers must understand any given physician’s financial and legal arrangement with the organization. “Don’t assume that because you have 200 doctors in your employed group, they all have the same deal. Are they really employed? There are a whole bunch of contractual structures … and only at a certain end of the spectrum do they cross the Stark lines and allow you to [legally] market the practice,” says Marlowe.

Knowing the financial model is also important in understanding a physician’s goals. Marlowe notes that a doctor who is on a pure salary arrangement isn’t likely to resist having a new physician join the practice, unlike a doctor who is solely compensated on the basis of patient volume.

Balance employed and independent

“Strategically, it’s untenable for a hospital or health system to remain half independent and half employed [in makeup of the medical staff] for too long,” Marlowe says. “It will just tear your organization apart” in being confronted by marketing, political, and structural challenges. It’s his view that once employed physicians exceed 50 percent of the organization’s volume and revenues and the trend upward is clear, there is a need to commit to marketing the employed group.

Marlowe notes that more than five years ago, a real but unnamed two-hospital system fully committed to marketing its employed physicians – currently about 90 percent of the area’s primary care physicians. The system’s independent orthopedic groups responded by banding together to open a surgery center and eventually a hospital. The system countered by hiring its own orthopedic group, to which primary care physicians direct referrals. “This is a marketing issue,” Marlowe observes.

Deal with leadership promises

Hospital and system leaders frequently make marketing promises in their efforts to recruit physicians or negotiate practice purchases. As one New Jersey hospital marketing department found, the result was the acquisition of eight groups that each maintained its own name. “One group went out and bought radio ads,” says Marlowe. “Another wanted its own logo.”

The best practice calls for having a clear onboarding process that gives specific levels of support and has leadership’s blessing and backing. To head off potential chaos, the marketing department of one Midwest system designed a three-tier method of support. The third tier, representing physicians without any capacity for additional patient volume, receives only maintenance support. The first tier, representing high-opportunity growth services, receives two or three times the money of the second tier, including mass media advertising and customer relationship management support.

Handle physician expectations of marketing

“Your job is to show the doctors what they really need as opposed [to a billboard],” Marlowe points out. Among the areas to address are customer service, relationships with referring physicians, and access.

“Capacity is a huge issue,” he says. Mystery shopping of physician practices, he adds, “should be as routine as doing your consumer survey every year or two. If patients can’t get in to your channel of access … then you have a significant marketing problem.”

Efforts to open up more practice slots through changes in office hours and operations or recruitment of additional providers should come before promotional support. Addressing access issues “is part of the marketer’s job,” Marlowe observes.

Move to dedicated resources

As employed physician groups become larger, they will demand dedicated marketing support from the system, and failing to get that support, they will hire people on their own. Some organizations, says Marlowe, are viewing these groups as a service line and assigning marketing resources accordingly.

Boost familiarity and referrals within the group

Marlowe notes that it’s not unusual for physicians within newly formed employed groups not to know one another. Marketers need to delve into their basic toolbox to create social event opportunities, take physicians to meet other doctors in their offices, deploy print and electronic communications vehicles, and develop other avenues to promote intragroup cohesiveness and referrals. “One communication methodology between doctors doesn’t cut it,” he warns.

Barlow recommends that at the time physicians sign on, marketers assess the new physician’s familiarity with the other doctors in the group. “Inventory some of those referral patterns and begin right away to assign a liaison to start introductions,” she says. “The bad thing is that we sit tight for six months and let them continue with their old patterns.”

Limit leakage

Marketers need to keep close tabs on referral patterns for each provider, including nurse practitioners and physician assistants, and determine the reasons – and solutions – for referrals leaving the group. Is the driver of leakage a case of old habits that die hard? Lack of access on the part of in-group doctors? Absence of service capability in-house? Insurance requirements? Quality concerns? My-patient-requested-the-referral reasoning should be “taken with a grain of salt,” says Marlowe. “It’s true to a degree, but it’s rarely true to the percentage that you will hear it.”

In one case, Marlowe relates, a hospital found that many of its 125 employed physicians tended not to refer to the organization’s three employed urologists. After discovering that one urologist had a six-week wait for an appointment and the other two were of marginal quality, the hospital encouraged one of the marginal physicians to retire and recruited two new, high-quality doctors in the course of one year.

In the absence of quality or access concerns, dealing with a physician who continues to send only half of his referrals in-house begins with discussion and persuasion. An intermediate step might be to structure group financials, whereby the group is penalized by a member’s out-of-group referrals. Ultimately, the system can choose not to renew a physician’s employment contract, Marlowe notes.

Build a group brand identity—and value

“I don’t believe it’s a fatal strategic flaw to not have a branded über group,” Marlowe says. “But if you ever want to have the dominant physician brand in the market, it won’t happen if you have 28 different names.”

Marlowe reminds marketers that the brand also has to provide value to its market – a tough job given that most groups have been in existence for less than five years. He relates that a large group of 200 providers established its value by adding a number of desirable services and marketing them to consumers. The value-added services included full access to an electronic medical record, centralized scheduling, after-hours primary and urgent care coverage, and specialized screenings. A measure of the group’s success is the fact that it added 30,000 new active patient charts in a year. “You start differentiating your group from the other options in town,” says Marlowe.