A recent statement from Moody’s Investors Service, New York, indicates that the health care sector in the United States— traditionally thought to be among the most recession resistant—is now showing significant effects of the economic downturn. Disturbing news is also emerging of patients responding to family budget strains by forgoing important health care services. Unfortunately, this trend appears to be especially salient in populations that are among the most in need of regular preventive care (and that are most relevant to radiology practices), such as women and members of minority groups.
According to a December 2008 survey1 by the National Women’s Health Resource Center, almost half of US women decided to forgo medical care due to cost. Data also indicated that this trend was most prevalent among Hispanic women.
Together, the economic and health-behavior data present clear challenges to radiology practices and other health care organizations, from both public-health and practical business standpoints. These circumstances create a greater need for practices to initiate or increase community outreach and marketing programs that communicate to patients the importance of not neglecting their health in a recessionary time.
In an economic context, patients may be receptive to the idea that untreated medical conditions could, in fact, worsen financial problems or impair their ability to work. Undertaking such marketing measures can help protect the business health of practices, as well, by reducing loss of revenue from patients who forgo health care.
For businesses in many categories, however, cutting marketing budgets is a frequent, knee-jerk response to an economic downturn. The idea that this is a bad strategic move is supported by a compelling preponderance of expert opinion, often backed by case studies or empirical research on specific companies and sectors. Mediaweek, for example, cites reports by American Business Press, Inc, indicating that recessionary cuts in marketing have both short- and long-term negative impact on revenue and profitability.
The Wal-Mart Effect
Consumer behavior in the current recession suggests that expenditures viewed as necessities are most immune to reductions. That’s why Wal-Mart’s stock, as of December 24, 2008, was up nearly 30% from its 52-week low.
This Wal-Mart effect makes the trend toward consumer lapses in health care seem all the more counterintuitive, but other consumer research points to a possible solution for medical practices. According to goodpurposeTM, a social-marketing consultancy of the public-relations company Edelman, Chicago, marketing messages that are perceived as socially conscious or cause centered are among those to which consumers are most receptive during an economic downturn.
Consequently, an intelligent strategy for radiology practices would be to put out messages aggressively reminding relevant segments of the public that they should think of health care services, such as annual mammograms, as essential expenditures.
Medical practices are in a position to release socially responsible messages; for example, “You may not be able to afford luxuries in this economy, but can you afford to get sick?” or “The stress of the economy may make you more vulnerable to illness, so now is not the time to neglect your health care.”
Similarly, now is not the time to neglect the health of your practice. While cutting marketing during a downturn is a common response, it’s the wrong response. We might call this response not-so-smart marketing. Let’s turn that concept around and take a look at what we might call a smart-marketing approach for radiology practices. Here are some practical tips that could be the start of a smart-marketing prescription for keeping your practice healthy during the recession, and for positioning it to benefit most strongly from the coming recovery.
First, think strategically, not just tactically. Like any other type of business, medical practices newly venturing into marketing tend to start with a bottom-up rather than top-down approach. Bottom-up marketing focuses on specific deliverables, or tactics (such as brochures, advertisements, or press releases) without prior strategic planning and analysis to place them in the context of overarching goals.
Strategic marketing works from the top down, starting with analysis of the current situation of the business and its strengths, weaknesses, opportunities, and threats. Objectives emerge