Increasing efficiency—a top item on every hospital chief executive officer’s agenda—can only go so far. Roger Forgey, senior vice president of regional operations and business development for Erlanger Health System, sums up what every hospital executive knows: “As payments continue to go down, it takes more volume to be successful—or just to survive—in healthcare.”
While many hospitals focus on increasing market share in their primary service area, others are fishing in new waters. But how to reel those patients in?
Wrangell Medical Center, a tiny critical-access hospital, uses flowers and greeting cards to woo discharge planners from larger facilities. Erlanger, an academic medical center, specifically avoids advertising to some of the patients it hopes to treat. And Cleveland Clinic, ranked among the top providers in the nation, places its own employed physicians in other hospitals around the country.
Although each has a different mission—and different strategies—the three hospitals are all increasing patient volume by casting their nets broadly.David helps Goliath
Wrangell Medical Center is a city-owned hospital on Wrangell Island in southeast Alaska. The facility, which has eight acute-care and 14 long-term care beds, does not handle surgeries or baby deliveries, so Wrangell escapes the pressure to constantly upgrade expensive equipment for specialty care. But Chief Executive Officer Brian Gilbert shares the same basic challenge—how to survive financially—that nearly every hospital administrator faces. After all, it’s hard to break even when the typical daily census is two patients.
Two years ago, Wrangell started looking beyond the island for patients to fill up its beds. Success has come from solving a problem for the larger hospitals in Juneau, about 120 miles away, and elsewhere in the region.
“What we’ve done is marketed ourselves to bigger hospitals that do not want swing-bed patients,” Gilbert says, referring to Medicare patients whose hospital stay is likely to drag on for weeks. General acute-care hospitals lose money on those patients and want to free up the bed for someone with acute needs. But Wrangell, designated as a critical-access hospital, is paid $1,900 a day for those patients.
Flying to Wrangell for a long inpatient stay has to be the patient’s decision, so Gilbert and his staff want to make sure hospital discharge planners speak highly of the option. The main selling point: Wrangell’s physical therapist—and indeed, all staff members—have more time to spend with patients than their counterparts at a busier hospital.
“We printed up a very nice glossy brochure, and we make darn sure that whenever we’re in one of these towns, we go get the discharge planners and take them to lunch,” he says. “I send them candy and I make sure on Valentine’s Day they get a valentine.”
The strategy is helping Wrangell fill beds. “I haven’t lost money for 32 months,” Gilbert says.Positioning as a partner
Like most tertiary-care hospitals, Erlanger Health System stations helicopters throughout its service region, prepared to fly trauma and critically ill patients to Chattanooga, TN, for emergency treatment. Unlike many regional hospitals, however, Erlanger does not want to pull market share away from the 46 smaller hospitals on its radar screen.
Smaller hospitals are concerned that a tertiary-care facility is going to come in and effectively steal their patients, says Forgey. “That’s what the fear has always been in the region: If I give you my patient, will I ever get this patient back?”
Forgey’s staff of service line managers—one manager represents cardiovascular, renal and urology, for example, while another covers trauma, general surgery, neurosurgery and neurology—and regional coordinators are assigned to develop mutually beneficial relationships with hospital executives and physicians in the region. “I don’t want to compete with you for the business that you have,” Forgey says. “But I do want you to think of me when it’s beyond the level that you can take care of that patient.”
Such a strategy means the small towns of southeastern Tennessee are not seeded with Erlanger-owned primary-care practices or Erlanger billboards luring patients to drive past their local hospital on the way to Chattanooga. But if a small hospital’s administrator expresses a need—say, the goal of recruiting an orthopedist—Erlanger’s business development staff kicks into action. The University of Tennessee College of Medicine, with which Erlanger is affiliated, is notified of the opportunity with the goal of creating a match between an Erlanger-trained physician and that community hospital.
Building partnerships is a long-term proposition, but Erlanger’s regional strategy appears to be working: The health system is averaging annual patient volume growth of at least 5 percent. Meanwhile, Forgey is spared the challenge of trying to funnel all the profitable patients in the region to his hospital. He sums up his partnership philosophy: “If an administrator wants to start doing cardiac cath and I try to prevent that cath business, then how successful am I going to be long-term in having them refer other business to me?”Marketing to the world
The majority—58 percent—of Cleveland Clinic’s inpatient discharges come from the seven-county area around the organization’s flagship campus in northeast Ohio. But home turf may not always account for more than half of the health system’s inpatient volume.
“We are drawing more of those specialized, highly acute cases from around the country,” says Paul Matsen, the health system’s chief marketing, communications and planning officer. “That’s good, because our core market is essentially flat in the seven-county region. So it’s important for us to grow our specialized tertiary care on a national basis.”
One unusual way of building the brand: installing Cleveland Clinic physicians to run heart programs in other hospitals around the country. The clinic, ranked by U.S. News & World Report as the No. 1 heart program for the past 12 years, began managing cardiac surgery services at another Ohio hospital in 1994. Since then its thoracic and cardiovascular surgery affiliate program has grown to include six hospitals in Ohio and four in other states. The most recent addition is Swedish Medical Center in Seattle, which became an affiliate in 2006.
Through the affiliate program, Cleveland Clinic provides medical direction, physician management and recruitment, quality assurance and other management activities. Cleveland Clinic hires the medical director, and the heart surgeons in those hospitals are Cleveland Clinic affiliated medical staff.
Cleveland Clinic’s primary national marketing strategy targets physicians who need to refer seriously ill patients. The central message focuses on the fact that Cleveland Clinic has the highest acuity index of any hospital in the country. In an ever-expanding direct market campaign, the health system disseminates so-called “outcomes” books that detail the hospital’s clinical trends benchmarked against national norms in areas ranging from cardiovascular medicine and neurology to pain management and nursing. Lola Butcher is a Springfield, Mo.-based freelance writer and a frequent contributor to