According to an article in the Burlington Free Press on Monday, Vermont state representative Steve Maier is proposing legislation to ban hospitals from spending money on advertising or marketing in the state. Here’s a quote from the article:

“‘It’s not producing health care,’ Maier said of the money spent on advertising.”

Given the focus on healthcare costs at a national level, it’s not surprising a politician has latched onto the relatively easy mark of hospital advertising. (It is surprising that it took this long). Let’s put aside the argument surrounding advertising that supports public health issues such as obesity, smoking or wellness for a moment. There are at least three reasons I can think of why such a proposal doesn’t make sense.

First, a hospital’s marketing expense is a tiny fraction of its overall expense. To be generous, let’s say it’s 1% of revenues, including all marketing salaries, external expenses, media, etc. Obviously it’s higher in some places and lower in others, but the point is that eliminating this expense won’t do much of anything to impact the cost of healthcare in the U.S. Of course, this is politics, so the actual impact of something is pretty much beside the point.

Second, there are serious free-speech issues involved, and it’s very rare for the courts to allow a restriction on an industry’s ability to communicate or promote itself. This will likely be the reason legislation of this nature won’t go anywhere, and if it does, why it won’t survive.

The third reason, and the one that is perhaps the most frustrating, is that hospitals and health systems in the U.S. – whether they’re for-profit or non-profit – must compete for patients to succeed. That’s the way the market is set up, and unless we went to a single-payor Canadian-style system, that’s the way it will likely stay. And with that type of market, organizations must be allowed to do whatever it takes to attract the customers (patients) they need to succeed. Many in the public would find this nonsensical or outrageous – “why do hospitals need to spend money to attract patients?” And politicians can prey on the public’s misunderstanding of the business of healthcare to drum up support for this type of legislation. But those who want hospitals banned from advertising their services miss the point that these are businesses that compete in an open market, and that’s a good thing.

If you believe in capitalism, you believe that competition drives innovation, efficiency, service and more. Competition should make healthcare better, not worse, though not everyone agrees with that. But the point is a bit moot – as long as we have the “system” we have of providing care, where providers must compete to find and keep patients, they should be allowed to use the tools other businesses use to pursue the same goals, and that includes marketing and advertising.

What do you think? Is this just an obvious/defensive position coming from a healthcare marketing firm? Will this legislation or others like it take hold? If they did, what would they mean for hospitals and all of us marketers?

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• Beyond ROI: Prove the Success of Your Marketing Efforts webcast:
  http://www.hcmarketplace.com/Prod.cfm?id=8507&s=EW89874C&e_topic=WS_HLM2
• Interval Blog Post: What we tell ourselves is hooey:
  http://www.thinkinterval.com/2010/02/what-we-tell-ourselves-is-hooey/
• Interval Blog Post: Healthcare branding and the law of expectations:
  http://www.thinkinterval.com/2010/02/healthcare-branding-and-the-law-of-expectations/
• Andrew Meyer’s blog: Discussion on consumer perception of advertising on — specifically as it relates to radio and the trend of ad-free blocks of music or programming:
  http://www.meyerprocreative.com/?p=46

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“If you’re like most people, you’re way too smart for advertising. You flip right past newspaper ads, never click on ads online and leave the room during TV commercials. That, at least, is what we tell ourselves. But what we tell ourselves is hooey. Advertising works, which is why, even in hard economic times, Madison Avenue is a $34 billion–a–year business.”

We’ve covered this ground before in this blog (see posts, “The demise of old marketing: ‘I’m not dead yet!’” and “Truth #4: If you want to know what will work in healthcare marketing, don’t ask your customers.”) But we’re encouraged that this type of thinking has found its way to mainstream media. And we’ll keep beating this drum until we see more hospitals and healthcare systems trying different approaches (such as metaphor-based interviews and ethnography) to better learn how consumers really think and act.

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The entire visit took an hour from start to finish, almost all of it waiting. “How could a dermatology practice afford such poor service?” I thought, especially given the multitude of options available to us in our area and the commodity level of care we needed.

Much of the revenue generated by dermatology groups is from elective cosmetic services – botox, microdermabrasions, etc. – and dermatology could be considered one of the surest forms of retail offerings in healthcare. Meaning price, convenience, service and experience all (should) play a significant role in customer choice.

Alas, despite the fact we were 10 minutes early, we waited in the reception area 25 minutes past our scheduled appointment, and after we were called back, waited another 20 minutes in the exam room. At that point, I told my daughter to put her shoes and socks back on, and we proceeded to leave. Coming out of the room we walked smack into the doctor coming in, who apologized for the delay, and we went back into the exam room for the 10 minute visit.

This whole experience amazed me given the elective nature of the dermatology business, and what I would assume is an understanding that serving customers right would be a key to success. But the kicker was the sign posted on the waiting room wall: “If you have been waiting 30 minutes past your appointment time please inform the receptionist.”

Nearly every doctor’s office, lab and waiting room has a sign similar to this, and typically they provide timeframes of 15 or 20 minutes. These signs are meant to acknowledge and allow for the variability inherent in many care encounters. Sometimes physicians or other caregivers need more time, and a delay can’t be helped. Depending on the situation, twenty minutes is either no big deal (the ED) or fairly annoying (scheduled lab visit). But I’d never seen one allowing for 30 minutes in a clinic setting like this. What this sign conveyed to me was that the clinic has accepted the fact that they can’t see patients on time, and they wanted patients to accept that fact as well.

The sign reminded me of one of my favorite business books, “The Feiner Points of Leadership,” by Michael Feiner. The author, a professor at the Columbia University Graduate School of Business, talks about management strategies using real-life stories from his own executive career at Pepsi, and his style is as down-to-earth and cuttingly honest as I’ve read anywhere. In his book, the first “law of leadership” is called the Law of Expectations, where he states:

“People live up to their perception of our expectations of their performance. More simply, people respond to the level of confidence you show in them.”

Now consider that sign again, and the impact it’s having on this dermatology group’s brand. From a brand experience perspective, it’s literally giving staff and physicians a pass on improving service and efficiency, solidifying as policy the idea that a 30-minute wait is not only acceptable, it’s likely the norm. Now consider it from a brand perception angle: How do I feel as a customer of this practice, knowing that I’m pretty much guaranteed to wait, possibly 30 minutes (or more) past my appointment time? Annoyed, angry, irritated, and itching to tell others — feelings the practice will have to work hard to help me forget if it wants me to recommend it to anyone else.

In this case, the brand perception became the brand reality, and when it came time to schedule the next appointment, I walked straight out of the office.

When it comes to your brand messaging, what expectations are you setting? It’s one thing to ensure your brand promise and values are grounded in reality – puffery and exaggeration have their own dangers. But it’s quite another to set brand experience expectations so low that they allow for an unacceptable reality. Doing so will not only assure a poor experience, it will assure your customers will seek a more respectful and satisfying alternative.

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Show Notes

• Reed Smith:
  http://card.ly/reedsmith
  Twitter: @ReedSmith
• Cleveland.com: Lowe’s will bring its workers to Cleveland Clinic for heart surgery:
  http://www.cleveland.com/healthfit/index.ssf/2010/02/post_27.html

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   Scratch ‘n Sniff

The ad also features a number of people who have been directly impacted by organ and tissue donation. Their stories are featured on the campaign website, found at DonateLifeMidwest.org. Other components of the campaign include outdoor, print and online advertising. The campaign is slated to run throughout 2010 in both the Twin Cities and Sioux Falls, South Dakota markets. According to LifeSource, eighteen people die each day in the U.S. waiting for an organ or tissue transplant, and more than 105,000 are waiting for a life-saving transplant.

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Participants will learn to:

• apply baseline measurement to compare consumer awareness, preference, market share, and volumes to periods with no marketing activity
• use relative measurement to compare results against similar marketing activities and prove the true impact of your marketing
• persuade internal stakeholders that these and other measurement strategies have value
• gather, assess, and present data that accurately demonstrates positive consumer activity and behavior

The 90-minute webcast is scheduled for noon CST on Wednesday, March 31. To register, or for more details, visit HealthLeaders Media.

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For example, according to the survey, 53% of marketing leaders surveyed said they are “highly valued” by the CEO, and 42% said they are a “key leader who contributes to overall organizational strategy.” Yet only 24% of CEOs surveyed said their chief marketing officer is represented on the senior executive team that works together on strategic planning. Also, only 11.5% of CEO’s said marketing at their organization was “very strong,” while 30% of marketers rated the quality of their marketing “very strong.”

Said Bevolo: “That tells me that there are a number of healthcare marketers who are either in denial about their role and/or perceived value in the organization, or who are somehow misreading the signals from leadership. Marketers may want to take a more critical look at if they’re really supported the way they think they are.”

Other input from Bevolo focused on how this potential disconnect could impact input from CEO’s that they will turn more to marketing in the next few years to fuel growth.

Read more about the overall survey at HealthLeaders Media.

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1. Chris Bevolo speaks on the new competition in healthcare marketing

• Joe Public doesn’t care about your hospital
• Healthcare marketing needs a serious shake-up
• Great healthcare marketing requires great healthcare leaders
• If you want to know what will work in healthcare marketing, don’t ask your customers
• Healthcare marketing must become less of an art and more of a science

Download a PDF of these articles.

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3. Pointing the Way: A look at new sources that are influencing how your patients choose care