Hospital Marketing

By Milan 63 Cristiel 83 Yash 99

Hospital Marketing

Overview of health care sector in India:
India’s healthcare sector has made impressive strides in recent years. It has transformed to a US$ 17 billion industry and is surging ahead with an annual growth rate of 13% a year. The healthcare industry in India expected to grow in size to Rs 270,000 core by 2012. The healthcare industry employs over four million people, which makes it one of the largest service sectors in the economy of our country. The healthcare industry in India has come a long way from the days when those who could afford it had to travel abroad. Today patients from neighboring countries, Middle East, UK and now even USA are flocking to India for specialized treatment. Healthcare is dependent on the people served; India’s huge population of a billion people represents a big opportunity. People are spending more on healthcare.

Also since the quality of work done can be determined only after the service is performed the providers have to be well trained in case of performing the service process. hears.e. Infact in case of hospitals the service is created . The customer has to be present when the service is performed. impossible for customer to taste. • Interaction between customer and provider may vary from customer to customer. For e.g. The customers can’t really realize the service provided until they get well. Inconsistency: It’s also referred to as heterogeneity or variability. Also a patient may not each diagnosis in a different way. the hospitals provide extra facilities like television. Inseparability: Inseparability means that the service can not be separated from the creator-seller of the service. The only way they can provide tangible clues to make the service provided a success.I’s of hospital industry Intangibility: Intangibility indicates that the service has no physical attributes and as a result. Here too the customer. delivered and consumed simultaneously through interaction between customer and service producers. i. or then friendly personnel’s can make a difference. For this they have to provide good supplementary services. Standardization is hard to maintain. Hospital industry is where the customers (patients) get treated for physical problems they have. the patient has to come up to the hospital to get the treatment. The inconsistency occurs largely because of • Different service providers perform differently on different occasions. Infact there are many services which are created. feel or smell before they actually use it. Every doctor is not the same and may not give the same diagnosis.

Here the costs are more subjective and are related to capacity utilization for e.and delivered simultaneously. E. The type of service to be provided depends on the customer. if a doctor is available but there’s no patient during that period. Inventory: Services can not be easily saved. the fixed cost of the idle physicians salary is a high inventory carrying cost.g. Also due to demand fluctuations the services can not be stored. .g. there’s a lot of rush at the dentists clinic in December and January as that’s the time when there are lots of tourist visiting India. This is all due to the perishable nature of the services. OBJECTIVE Teaching cum research for developing medicines and promoting research to improve the quality of medical aid. General hospital for treating general ailments. Also there’s inventory carrying cost associated with inventory. stored or inventoried. Special hospitals for specialized services in one or few selected areas. Classification of Hospitals On the basis of: 1.

Ayurved. which is partially shared by the government. Primary health centres – generally have 6 beds. Unani Homeopath Others 4. Hospital marketing mix The service marketing mix comprises off the 7’p’s. which is owned. which is based on the Indian system where herbals are used for preparing medicines. OWNERSHIP Government hospital. which can be adjusted in tune with number of students.2. 3. Taluka hospital – generally have 50 beds that can be raised to 100 depending on the requirement. which can be raised to 300 in contingencies. Charitable trusts also runs hospitals. SIZE Teaching hospitals – generally have 500 beds. District hospital – generally have 200 beds. PATH OF TREATMENT Allopath which is the system promoted under the English system. which can be raised to 10. These include: • Product • Price . managed and controlled by government Semi-government hospital. Voluntary organizations also run hospitals.

in a true sense determine the quality of services made available by medical and paramedical personnel. Health equipments The service product is an offering of a commercial intent having features of both tangible and intangible seeking to satisfy new wants and demands of the consumer. Many hospitals provide additional services such as catering. The service products of the hospitals have the following features: • Quality level Supporting services play an important role having the quality of Medicare. Medical software IV. cafeterias. hospital industry is action oriented and there is a lot of interaction with the customers. radiology and laundry. catering. for the customers who are willing to pay . These services. blood banks. etc. • Accessories This is a very good way of segmenting customers. laundry. yoga sessions. which include laboratory. Hospitals II Medical insurance III. Product Major inputs of health care industry The major inputs of health care industries are as listed below: I.• Place • Promotion • People • Process • Physical evidence.

g. Certain hospitals provide services for the family members of the patients – when they are not the same-city for accommodating and catering. 2. root canal. E.extra. . • Product Line Hospitals through their services offer many choices to the patient and cover a wide range of customer needs. Hospitals today offer the following services: 1. Hospitals have different wards-General and special. • Packaging It is the bundling of many services into the core service. There is hi-tech telecommunication available to a patient in an emergency at any given time. etc. Apollo hospital offers a full healthcare checkup to the patients. The intangibility factor of the service makes it all-important for the hospitals to do so. The hospitals have state-of-the-art ambulances. Emergency services Emergency services and care at most of the hospitals is unique and advanced. The CCU's on Wheels under supervision by medical and para-medical staff. Ambulance services Hi-tech ambulances linked by state-of-the-art telecommunications are fully equipped with doctors that are available to render medical attention and assistance in case of emergencies at the patient's doorstep. to differentiate themselves and their services from others use a brand name. For example: Apollo has a dental department. and within the dental department it has dental surgery. • Brand name Hospitals. cardiology department etc.

Plastic surgery and so on. 4. Orthopedics. emergency services. Oncology. the service offering in a hospital comprises of the following levels: 1. Generally. Pharmacy services Most of the hospitals also have a pharmacy which is open 24 hours. Causality services Causality service includes a 24 hrs. Causality department. services of renowned consultants. that can handle any kind of ailment. air conditioning of the hospital. but also patients from other hospitals who require emergency drugs.3. It caters to the needs not only of the inpatients and outpatients. Core level It comprises of the basic treatment facilities and services offered by the hospital like diagnostic services. 5. which attends to the accident or emergency cases. . they offer a wide range of facilities for instance. Augmented level It comprises of dress code for staff. 3. 2. Neurology. causality services etc. Diagnostic services Modern Hospitals are multi-specialty and multi-disciplinary. Expected level It comprises of cleanliness and hygiene levels maintained in the hospital. use of state of art technology.

which is successful in serving the social interests and generating profits. The ex-checker finds it difficult . Price usually depends on treatment prescribed by the respective consultants and the facilities offered to the patient. Pricing in Government / Trust Hospitals In the Indian setting where a number of persons are below poverty line it is challenging task to formulate a pricing strategy. The pricing strategy is formulated after consulting the concerned heads of department. Hospitals need to invest a lot in sophisticated equipment and technologies to improve the quality of medical aid. Even the affluent sections of the societies expect. Before fixing prices. low cost services form the social institutions in general and hospitals in particular the task of services innovative in line with latest developments in field of physical sciences is difficult. Pricing strategy adopted does not depend on the price offered by competitors. Price charged must be able to target customers and it should co-ordinate with other elements of the marketing mix. Prices of various facilities revised every year depending on the change in technology. It is due to this that the most government hospitals are in deplorable condition. it is very hard for deciding the price of the particular service offered. As a service is intangible.PRICE It is one of the most prominent elements in the marketing mix. government controls are also taken into consideration.

this method is cumbersome because the tracking and identification of costs are difficult. Notwithstanding. the government regulations also close doors foe generating finance from internal sources. • Demand based pricing: .to finance hospitals and further. For social institutions like government hospitals a discriminatory fee structure is preferred since it provides even the weaker sections of society. The fee strategy for all the hospitals should be in proportion to the incomes of users. an opportunity to avail the quality medical services. however can be used by doctors. some hospitals in the private sector follow this method. • Competition based pricing: Using other price as an anchor for the hospitals price. In hospital services. heterogeneity of service across and within providers makes the approach complicated. The societal marketing principles make can advocacy in favor of protecting the public interests but it not meant that the hospitals have a uniform pricing/fee structure for all the users. Since the affluent sections have the options to avail the expensive medical services made available by the hospitals. The ultimate sufferers are the society and specially the poorer sections. This enables hospitals to innovate services to keep pace with the latest developments in the medical sciences. which would engineer a sound foundation for qualitative or quantitative improvements. Fee for services. Pricing in Private Hospitals • Cost based pricing: Price = Direct costs + overhead costs + profit margin.

. Even the doctors visiting fees/consultation charges are different. Internally: There is a price differentiation even between the two wards of the same hospital. Even though the operation to be done might be the same. They are also of the opinion that activity-based costing (ABC) should replace market-based costing. Experts feel that hospitals must do costing of all new services and review the fee for existing ones periodically. the prices differ. pricing differs due to the kind of service provided pre and post operation.Cost based pricing and competition based pricing do not consider certain criteria. Prices are based on what will par for the services provided. Differential pricing in the hospital industry happens • Externally (between 2 hospitals) • Internally (within a hospital) Externally: Between two hospitals. and so the hospital is bound to charge the patient for it. Cost is associated with the kind of service you provide. Demand based pricing involves price setting consistent with customer perception of value. Thus the pricing would be different. There is difference between the general ward and special ward where the rooms are air-conditioned and extra services are provided. even to provide the same treatment. Sometimes if the patient is very poor then the doctor may halve his fees.

There is not a single Indian hospital which has packages for more than 8-10 procedures. which includes indexed time cost of physicians. Prices are revised on a percentage basis every year. Costing should be done when a new procedure. or activity is introduced.Ideally prices should be fixed based on a cost-plus formula. PROMOTION . The mark-up over cost should factor in things like urgency and seriousness of treatments. “For all other procedures. lumpsum (package) prices should be fixed for at least number procedures. etc. New hospitals get price lists of existing hospitals and mark-up or markdown is arrived at based on how they want to position the brand. the hospital gives an estimate of cost . the actual billed amount is higher than the original estimate Hospital rates should be arrived at by logical process of first making a detailed study of all the costs involved.and 90 per cent of the time. Also. at best. equipment. doctors & other staff. volumes. without doing actual profit and loss analysis on each item or procedure. frequency.

Promotion includes advertising. To crease the clientele. sales promotion and publicity. both indoor and out-reach programmes. check-up camps for public. play a significant role in marketing of healthcare institutions. master health programmes and diabetes health checkups apart from annual health checkups offered to different companies. now the corporates prefer a long-term association with the healthcare institution by signing a memorandum of understanding (MoU) Marketing experts believe that a sound Client Relationship Management (CRM) forms the basis for soliciting corporate tie-ups. Hospitals generally advertise in health and fitness magazines Though there are no specific strategies for hospital marketing. Customers need to be made aware of the existence of the service offered. conducting interviews of specialists on visual media. printing and making readily available various emergency or appointment numbers . a hospital may continuously introduce different health services like the accupressure clinic. old age homes. they rely a lot on a favourable word of mouth. Hospitals conduct camps in rural areas to give medical check ups at a reasonable price so that the rural people approach the hospital again in the future. informative and interactive website.Promotion function of any service organization involves the transmission of message to present. personal selling. awareness sessions for general public. a systematic approach to marketing has evolved over the past few years. today. etc. Hospitals do not normally undertake aggressive promotion. Continuous medical education. (Corporate clients) Events. Unlike earlier. past and potential customers. organizing events on various health days. They also sponsor frequent visits to the spastic society.

Many of these companies are spending a lot in corporate advertising for image building. three fourth of the total doctors have engaged themselves in this part. Sponsorships/placement of advertisements in medical journals/magazines/news dailies. brochures. patient information material.e. One factor that is likely to have significant impact of the health care scene is the growing hospital chains such as Apollo. expansion of ventures. It may also do Public Relations i. It may engage in brand enhancement through publication. VIP and visitor hospital tour and conduct patient satisfaction evaluation. website.are the commonest marketing tools. etc. medical tourism As patients are the best ambassadors. It also organizes market research for new facilities / services and enhances market reach through franchising. artificial heart transplants and other complex operations although are few in number and generate a small potion of the total revenue. . which was aimed at educating and creating awareness amongst children and parents. exhibitions. It can be associated with co-branding.In this business. every satisfied customer brings thousand new customers. corporate film. and camps. Hospitals have even started various days like” Liver day” etc. loyalty programmes and outreach programmes through disease specific clubs / support group programmes. which is association with other established brands for increased visibility and awareness and increase utilization. it is important to take care of their needs and provide them with best possible care. Their apprehensions should be addressed so that they have the courage to come back to the same facility. Although one fourth of our population stays in urban India. press and media relations. Birla health centers. they help in generating word of mouth which health care providers are actually interested.

inviting foreign faculty and holding joint symposiums with the foreign delegates to share their skills. Noida Fortis was the first hospital to organize an exhibition in the National Capital Region. code of conduct and corporate social responsibility. One of the most effective marketing tool is a web site (www. Other marketing strategies involve that the hospital conducts free health check-ups like diabetes and cardiac check ups for the general public. Mumbai The marketing strategy of Jaslok Hospital involves tying up with corporates. The hospital has a tie up with Stanford University Medical Centre. Bhabha Atomic Research Centre (BARC) and Air India. Fortis launched a dialysis technician programme for women from the weaker section of society in which they were given free training by the hospital and they will be assimilated in the hospital itself. knowledge and experience. Mumbai Port Trust (MBT). US and they hold video conferencing every month with the doctors of the centre. Chennai All marketing endeavours at Apollo are based on strict ethics. who interact with the faculty of their hospital.Some examples of promotional strategies adopted by world-class hospitals in India Fortis. wherein the general public could visit all departments of the hospital and get answers from experts. They interact with doctors on one on one basis. Apollo Hospital.jaslokhospital. some of them being Oil and Natural Gas Commission (ONGC). Jaslok Hospital. Secondly. which is constantly updated by their technical staff.net). They regularly conduct seminars and continual education programmes to explain to doctors the .

To reach the consumers. Being a hospital chain. they have the advantage of leveraging their brand. local infrastructure. . good road access facilities and public transportation network. they rely mostly on public relations. Accessibility refers to the ease and convenience with which a service can be purchased. location of potentially attractive consumer segments. The kind of services a hospital is rendering is also very important for determining the location of the hospital. Whenever their doctors perform pioneering surgeries or winning awards for their achievements.advances in the medical sciences and the infrastructure that their hospital has. This element in the marketing mix leads to the identification of a suitable location. used or received. used and received. Factors influencing the placing decision are market size and structure by geographical regions. PLACE It refers to contact point between the customer and the service provider. Availability refers to the extent to which a service is obtainable or capable of being purchased. who gets the benefit of the service. The two major issues considered regarding the decision of a place in case of hospital are accessibility and availability of the service to customers. They regularly present various health programmes to the corporates who form a significant chunk of their customer base. they talk to the media and when people come to know about their achievements they get confidence to go for their services. number and types of competitors in the region. A hospital must be ideally located and must be easily accessible to all.

the earliest and best way of having control on the quality of people will be by approving professionally sound doctors and other staff. PEOPLE The People component reflects the important role played by individuals in the provision of services.Example: Tata memorial hospital specializes in cancer treatment and is located at a center place unlike other normal hospitals. The people of the hospital should be constantly motivated to give best of their effort. . Hospital is a place where small activity undertaken can be a matter of life and death. The patients in the hospitals are already suffering from trauma. For that they will have to be independent on the hospitals in the urban areas. In a country like India which is geographically vast and where majority of the population lives in the rural areas place factor for a hospital plays a very important role. Under hospital marketing a right person for the right job has to be appointed and they should be adaptable possess versatility. which you can find all over other places. which has to be understood by the doctors and staff. supporting staff etc. so the people factor is very important. A typical small village or town may be having small dispensaries but they will not have super specialty hospitals. It is necessary that the staff in the hospital are trained to offer quality patient care with human touch using state of the art technology. Under hospital marketing mix people includes all the people involved in the service providing process which includes doctors. People are also an important element in the marketing mix. nurses.

There should be active participation of the employees in the activities of the hospital. always wearing a smile. whereas in a hospital. free from any kind of tension. In a hotel. There are many other ways to motivate the employees. the staff has to cater to the needs of sick. Warm ambiences with efficient and cheerful staff help make the experience of the public a memorable one. Private Hospital: They have pleasing manners and behave softly with the . dedicated and loyal to the organization. There should be regular liaison with them at all times. depressed and an agitated lot. Therefore.  Offering regular on-job training of employees to ensure continuous improvement in health care. Government Hospital: In Indian government hospitals except a few almost all the hospitals and their personnel hardly find the behavioral dimensions significant. Knowing what the employees want is very important.  Utilizing services of professional competent medical consultants. the job of the staff becomes much easier.The objective of offering quality service to the patients can be attained by: Motivating employees to be efficient. it is very important that the staff of the hospital is friendly and comforting. where the clientele is happy. Hence even if the patients get the correct treatment they are often dissatisfied with the behavioral pattern of the staff.  Motivation is not necessarily by giving high salaries.  Use of latest technology. Concessions should be given to the employee's near ones.

2. which sets a standard for action to take place and to implement the service. PROCESS Process is a set of activities that take an input. convert it and add value to the input and finally create an output. The Joining Phase It includes the following: * The arrival of the patient. Process has only recently been given much attention in the service sector although it has been the subject to study in manufacturing for many years. the process is divided into three phases. The Intensive consumption Phase It includes the following: . 1.patients. They provide timely care and are present always in times of need. * Registration – where a patient has to make an initial deposit at the in-patient billing counter after which a file is opened in the patient's name to know the patient's medical history. Processes are designed by blue a print. In a hospital.

the medication to be taken. The detachment Phase It includes the following: * Discharge of the patient – a patient can be discharged from the hospital on the advice of the consultant * Payment – after the patient is discharged.Diagnosis – where the consultant diagnoses the illness by making the patients undergo various tests. 3. when to consult him again in the future and so on. Feedback At this stage. valued and considered and many times are very useful for improving the services of the hospital. Information about further actions – the consultant will instruct the patient regarding the diet to be followed. General Process Organization in a Hospital . Patients' suggestions are always welcomed. the bill will be paid at the billing counter. Treatment – when the illness is treated with proper medication or surgery and so on. which assists the hospital authorities to know the level of satisfaction derived by the patient. the patient is requested to fill an evaluation form. 4.

it has found that this kind of a customer-supplier relationship helps to offer an important system of checks and balances and gives the organization a more focused customer orientation. Only when each unit of the hospital understands who their customers are and what their needs are. the purchase department serves the needs of the stores. . for example. Private Hospital: With the advent of information Systems in hospitals all . However.Within the hospital. each department or unit should consider itself to be a service provider serving the needs of the customer department. each department is looked. Each department is an "internal customer" of the other departments. each department is a customer to another department. the world-over in many organizations that have used this concept. Government Hospital: There is lot of paper work involved in the whole process. it is noticed that each department serves the needs of another department. In a superficial level. Hence the whole process from admission to discharge is tedious. while at the same time it might be a supplier to another department. So in a way. will the hospital develop basis for giving the best service in the most efficient way to the patient. it may seem as if each department is working as an independent unit rather than a team. the billing department serves the needs of the finance department and so on. In a way.

Special care should be taken to maintain hygienic. The ambience plays an important role because when a patient walks into the hospital he immediately forms an opinion about the hospital.the paper work is reduced and the process is smooth and fast. The entire hospital requires to be centrally airconditioned with good lighting. A hospital has to keep in mind both the aspects of . PHYSICAL EVIDENCE Physical Evidence is the element of the service mix which allows the consumer again to make judgments on the organisation. Physical evidence is an essential ingredient of the service mix. Right from the reception one finds very cordial and comforting staff. The staff follows a dress code to show professionalism and to maintain discipline. This is taken care of by the housekeeping department. The staff is trained to be understanding. Physical evidence plays an important role in hospital services. It is necessary for a hospital to be well organized and segregated into different departments. cleanliness and whole hospital must be well lit. warm and comforting because the clientele that goes to the hospital is usually disturbed or unhappy. All the doctors should be offered with a wellequipped cabin. Ventilation is taken care of by airconditioning. Modern hospitals need to create a good ambience. consumers will make perceptions based on their sight of the service provision which will have an impact on the organisations perceptual plan of the service.

which helps. Physical evidence particularly plays an important role in the hospital where the patients are already depressed or traumatized and a good atmosphere could make all the difference. Government Hospital: Government hospitals have a huge building. Another reason that it plays an important role in the health care services because the core benefit the customer seeks is proper diagnosis and proper cure of the problem. in developing the minds of the people.physical evidence that is essential and peripheral evidence. Physical evidence can be in the form of smart buildings. logos. Private Hospital: Private hospital like Bombay Hospital has got a smart building. but are not properly maintained. mascots etc a smart building infrastructure indicates that the hospitals can take care of all needs of the patients. hence it creates a bad impression among its patients that the hospital is unhygienic. . the impression that it is the safest option among the different hospitals available to the people.

More and more of the Indian population is taking up insurance which results in increased spending on healthcare.1. According to an ICRA industry report on Healthcare.1 percent of its GDP on health. A majority of the private sector hospitals are small establishments with 85% of them having less than 25 beds. The private sector accounts for 82% of all out patient visits and 52% of hospitalization at all India level. smaller hospitals and nursing homes and clinics run by qualified personnel. Future Increasing private sector participation in healthcare services is stimulating change in the Indian healthcare industry. Private tertiary care institutions providing speciality and super speciality care account for only 1 to 2% of the total number of institutions while corporate hospitals constitute less than 1%. This has had a cascading effect with more and more hospitals in the private sector upgrading their facilities to land a slice of this business. 408 billion . Of late India is becoming a preferred healthcare destination for neighboring countries and the West due to low cost and high quality of treatment available giving rise to the term medical tourism. India spends 5.Market Trends Over the last five decades India has built up a vast health infrastructure and manpower at primary. Medical insurance which was non existent earlier has now opened up. The health market is estimated at Rs. Currently private sector health services range from those provided by large corporate hospitals. secondary and tertiary care in government. voluntary and private sectors.

The proportion of households in the low-income group has declined from 58. it is estimated that the demand for quality healthcare in India will increase. In view of the growing population and higher incidence of noncommunicable diseases. which also present a vast opportunity. the higher levels of income. The rise in literacy rate. The role of the private sector is likely to further increase with preference for private care and government’s constrains of limited resources.8% in 1990.8. Good Healthcare in India is in extreme short supply and it is this gap that Corporates are looking to plug. medical and diagnostic equipment and supplies.($30 billion) and includes retail pharmaceutical. India's huge population of a billion people. People are spending more on healthcare.000 and Rs. has constituted to greater attention being paid to health. At the same time. to 49% in 1996.000 in the late -1980s. The middle-income group in this vast base is also a large 250 million. the middle & higher income-group has increased from 14% to 20%. Since healthcare is dependent on the people served. and an increased awareness through the deep penetration of media. healthcare services. spends between Rs. There are various gaps in the Indian Healthcare Market. represents a big opportunity. Today.12.000 a year on healthcare . .compared to just Rs.2. a middle-level manager with a family of four. Most users of healthcare have been paying from their own pocket and preferring private services to government ones. in the same period.

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