Marketing Face Off: L.L. Bean vs. Your Local Hospital

US hospitals take in more than $500B annually, which is more than twice the amount Americans spend on clothing. What if clothing stores and their websites offered a consumer experience similar to that of hospitals? Think pricing opacity, limited information on quality, perplexing store navigation, and a sense that customer experience is a low priority. I suspect that the apparel industry would be much smaller if this were the case. We would simply make do with fewer clothes.

Why, then, do hospitals continue to capture such a large slice of the US economy? Why haven't more patient-friendly institutions grown up to compete with conventional hospitals on the basis of patient experience? [1] The answer is that, on average, patients pay for just 5% of hospital services. Medicare and commercial insurers are hospitals' real customers. And these customers are demanding a stronger focus on patient experience. In particular, the Value Based Purchasing program will use patient survey results to determine incentive payments to hospitals.

Combine this trend with the rise of high deductible plans -- which have tripled in the last five years -- and you have a more consumer-driven market for hospital services. And since higher patient satisfaction is correlated with higher care quality, this could be a good trend for hospitals, payers, and patients alike.

Patient Engagement is the Future of Healthcare Marketing

What if your local hospital considered it their mission to make you the CEO of your health? That is, they provided you with the information and tools you needed to stay well on an ongoing basis. Imagine if hospital marketing departments shifted their focus from promoting their technical superiority via billboards and ads at the airport into a focus on YOU. The best hospital marketing departments will develop a deep understanding of their various customer segements -- based on wellness goals. After all, this goal orientation is the hallmark of the world's greatest marketing teams -- from L.L. Bean to Proctor & Gamble. Hospital Marketing ... this is your time to step up!

[1] To some extent this has happened in the form of surgical hospitals, which dominate the list of hospitals with the highest patient satisfaction scores.