Health Care Marketing Analysis, Research Paper Example

The University of Minnesota’s Ampaltz Children Hospital opened its doors in the spring of 2011. The hospital’s opening in one sense was monumental, the first specialized children’s hospital opened in Minneapolis; in another sense, the opening was quite paradoxical.  In addressing the paradoxical aspect: Several children’s hospitals operate in St. Paul; in addition, the University of Minnesota/ Fairview hospital system is one of the most respected systems in the state of Minnesota and the upper Midwest with existing services for children, albeit in the general hospital. Indeed, the hospital departments primarily related to childcare, such as the neo-natal care unit and the autism research center, were subsumed as part of the larger Fairview hospital system, and enjoyed ample recognition along with the medical center.[1] The paradox emerges in understanding why Fairview decided to invest substantial capital (estimates range from 250-400 million dollars) in building a standalone hospital for a unit that already garnered substantial state and regional attention.  One answer to this question, although there may be numerous others, is hospital administrators likely saw an opportunity to differentiate and segment existing care provided in new hospital, while also attracting additional clientele from a wider geographical area than the Twin Cities (Huber, 2006).

Of the four P’s related to marketing, place was likely the easiest to decide.  The main Fairview hospital center is located adjacent to the University of Minnesota’s East Bank campus.  The synergy between the two organizations is obvious: The Fairview hospital system has essentially been integrated as part and parcel of the University of Minnesota’s Medical School and Academic Health Center.  Indeed, the affiliated hospitals not only serve as a key training ground for future doctors, but also attract many of the best and brightest medical students from the state and region for positions after medical school. The decision to place Ampaltz adjacent to the current hospital was likely a conscious marketing decision to leverage upon the existing resources of the Fairview system, as well as tap the human capital associated with the medical school. In addition, Ampaltz is located roughly 10 minutes away from downtown Minneapolis, 20 minutes from downtown St. Paul, and a half hour’s drive from the Minneapolis St. Paul Airport; a busy thoroughfare that would not only attract residents from across the state of Minnesota, but also close for residents from the upper Midwest who could fly in reach the hospital quickly

Ampaltz Children’s Hospital has leveraged traditional and social media as a key route to deliver marketing messages.  When the hospital first opened in April of 2011, all types of traditional media including newspapers, television, and radio, mediums that are consistently used by doctors, covered the opening.  Indeed, many of the doctors and administrators went out of their way in order to arrange interviews and promote the hospital’s opening.  In addition, Ampaltz has successfully leveraged the medium of social media to reach individuals in new and innovative ways.  Ampaltz Children’s Hospital has opened a Twitter account from which it offers daily updates of activities of what is happening at the hospital; in addition, the hospital offers health “tips” to parents that helps to bridge the gap often times between the hospital and potential patients.  Finally, Ampaltz has also created a Facebook page that not only serves as a depository for existing media coverage of the hospital, but also allows the hospital to interact one-on-one with parents who have questions about the hospital but do not necessarily want to call.

From a product positioning perspective, the hospital has tried to brand itself as a horizontal “one-stop” shop for health care needs related to children.  Indeed, this is likely one of the main reasons that Fairview likely decided to create a standalone children’s hospital versus the unintegrated model that it previously demonstrated.  Previously, all the hospital’s medical resources were subsumed in more general departments (such as oncology) where parents and the press might not have been aware of the existing expertise in certain areas related to children and across a range of clinical and non-clinical service offerings. Now with a standalone hospital specifically related to the needs of children, the product offerings, and particularly the scope of the offered products, can be featured in a marketing campaign. For example, Ampaltz now has the ability to promote the specialized diagnosis and care that is offered under the clinical umbrella of the autism center that not only includes clinicians, but also includes psychologists, psychiatrists, and social workers to integrate the care necessary for an autistic child.  This product placement not only allows Ampaltz to differentiate itself from other hospitals in the areas of scope and depth of expertise, but also may allow the hospital to increase the business and the margins involved in providing care for children.  Indeed, while the pricing of the product at Fairview hospital systems is not known to be inexpensive; however, with new facilities and a new marketing campaign, perhaps customers may be willing to pay more for the convenience and brand.

Turning to the issue of partnerships, Ampaltz has successfully leveraged off of the Fairview and University of Minnesota brand in order to build its case against the main local competitor: Children’s Hospital located in St. Paul.  Indeed, as alluded to earlier, the partnership between Ampaltz and the University of Minnesota’s Academic Health Center has turned out to be a win-win for both parties.  Ampaltz, as an up and coming hospital, can leverage of the intense brand recognition of the University of Minnesota- both the educational quality of the institution and its tradition for world-changing research. The Academic Health Center, in turn, finds a partner that can serve as a training field for future doctors- as well as a key fiscal partner that will offer critical training support to AHC doctors (Briendel, 1987).

In addition, Ampaltz has also sought to partner with various specialized NGOs that focus on charity care and the training of physicians and surgeons world side.  For example, the hospital has announced a partnership with Children’s Heart Link to provide training and care for infants in Lanzhou, China, [2] Ampaltz is associated with the Children’s Cancer Fund and has used the partnership as a key platform to develop its expertise in the area of cancer.

Assessing the target market of Ampaltz is somewhat difficult, largely because the hospital is aiming to attract two different types of patient.  First, the hospital is obviously looking to establish market share in the Twin Cities metropolitan area and upstate areas.  According to the latest census estimates, there are roughly 350,000 potential children in the Twin Cities area. [3]Because there are a number of different hospital systems that offer specialized children’s care, this population of clients may not be as fluid as commonly believed.  Arguably, however, Ampaltz is not only aiming to tap the existing market for children’s care in the state, but also out-of-state patients who are looking for top-rated care in highly specialized areas.  Ampaltz has the top-ranked cancer program and kidney disorders in the five-state region of the Midwest[4]; one could argue the next highest ranked center would either be in Seattle, Washington (which draws patients predominantly from the western region) or from the University of Indiana-Indianapolis (which predominantly draws from the eastern region).  If one adds the five state (North Dakota, South Dakota, Iowa, Wisconsin, Minnesota) market to the existing Twin Cities demographics for children, the hospital is looking at a potential patient market from 8-10 million children.  Thus, it is vitally important for the hospital not only to maintain a high level of general care in order to stay competitive in the metropolitan area, but also to develop highly-ranked specialization in departments that will allow it to draw from the region and beyond.  This is clearly on the map as Ampaltz has announced initiatives to partner with hospitals outside the Twin Cities area for diagnostic and other services.

Overall, Fairview’s decision to open a standalone children’s hospital was a function of realizing that, at least from a marketing perspective, a children’s hospital would allow for greater resource development and recognition by the consumer not only in the Twin Cities, but also on a regional and national basis.

References

Huber, D. (2006).  Leadership and Nurse Management.  New York: Elsevier Press.

Eudes, J.A. & Divis, K.L. (1992). Marketing the academic medical center group practice.  Medical Group Management Journal. 39(3): 50-1, 53.

Breindel, C.L. (1987).  Marketing in the academic health center. Health Care Strategic Management. 5(1): 8-10.

Notes

[1] The identified departments are perennially ranked at the top of the U.S. News Hospital Rankings.

[2] http://www.childrensheartlink.org/documents/Childrens_HeartLink_Press_Release_China_10-2010.pdf)

[3] Based on 2010 census figures.

[4] According to the US News and World Ranking for Hosptials in 2010.