Steven G. Hillestad - Health Care Market Strategy: From Planning to Action

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Library of Congress Cataloging-in-Publication Data
Names: Hillestad, Steven G., author. | Berkowitz, Eric N., author.
Title: Health care market strategy: from planning to action / Steven Hillestad and Eric Berkowitz.
Description: Fifth edition. | Burlington, Massachusetts : Jones & Bartlett Learning, [2020] | Includes bibliographical references and index.
Identifiers: LCCN 2018037600 | ISBN 9781284150407 (paperback)
Subjects: LCSH: Medical careMarketing. | Strategic planning. | Health services administration. | BISAC: MEDICAL / Hospital Administration & Care.
Classification: LCC RA410.56 .H55 2020 | DDC 362.1068/8dc23 LC record available at https://lccn.loc.gov/2018037600

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xijian/Getty Images

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T hirty-five years ago, the first edition of this book was published. Since that time, many changes have occurred in the healthcare environment. However, as we look back and re-read our preface from that first edition, much of what was written holds true today. As health care continues to dramatically evolve, the need for well-formulated approaches to market-based planning as this text espouses and helps the reader understand is ever more essential.

Thirty-five years ago, health care was transforming, as we described, from a cottage industry to a competitive market in which organizations were restructuring to be more organized entities to respond to a marketplace of buyers. The provider systems now recognize that it is important to understand the buyers needs and that identifying and deconstructing competitive alternatives are key components in effective market strategic planning.

In todays healthcare environment, the forces of change are rooted in technology, demography, government policies, and structural shifts. All these forces significantly impact the need for healthcare organizations and the leaders of those entities to be more sophisticated in planning their marketing strategy and appropriate tactics considering these forces. As we noted in the last edition of this text, entrepreneurs recognized health care as a place for considerable opportunity. In this edition, many of these entrepreneurial opportunities have resulted in disruptive new services that influence the strategies for others within the healthcare provider ecosystem. Plans must be developed considering the marketplace changes. Demographics impact services in terms of opportunities. Planning must reflect these realties and shape marketing strategies. Over the course of the previous four editions, government policies have changed as health policy has changed. While this book is not a discourse on reimbursement rules and regulations, it is important to link the environment to strategy and to action and to understand the influence of these forces. Finally, the structural shifts that have occurred have been dramatic. As plans are developed relative to the competition, new entrants into the market, realignment with mergers and acquisitions, and the impact of global competitors all are ever more present factors in the 35th year of this texts edition.

These changes today make healthcare market strategy ever more complex. Strategy under the rules of cost-based reimbursement of some 40 years ago for those who may still remember and long for them or those who study healthcare reimbursement and wish they were the rules today recognize the ease of management strategy. Patients were admitted, care was delivered for the necessary procedure, and the costs were passed along to an insurer. Now, there is value-based care, high deductible healthcare plans, individuals who may still buy on an exchange, center of excellence contracting, reference pricing, as well as other variations that may affect the price component of marketing as well as overall marketing strategy.

In promotional planning, technology as well as marketplace behavior has dramatically altered over the decades. Social media strategies are a major component of strategy and resultant tactics. Competitors presencealong with third-party sites for education as well as for evaluative referenceis now utilized by consumers. Here too, healthcare strategy must be linked to these environmental shifts compared to the simpler days of media that were dictated by broadcast and print and message control and tactics under the organizations control.