Trends In Hospital and Health System Marketing in a Rapidly Consolidating Industry

Following is a transcript of the podcast interview recording that can be found at the top of this page. The transcript has been edited for clarity and length.

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Lonnie Hirsch: My guest today is Alan Shoebridge, Executive Director of Marketing and Communication for Providence St Joseph Health. Alan, thanks for joining us today. I wanted to start off by asking you, in this era of continued consolidation among the health systems, how has your marketing strategy changed in the last few years? Or has it?

Alan Shoebridge: Yeah, it’s an interesting question. To some degree as we’ve seen, the system is getting bigger and more sophisticated. It’s really put pressure on everyone to up their game and become more dialed in and more focused on consumers. When I started in this industry 15 years ago, you could just throw up a billboard and kind of hope for the best.

I think as the competitors have become more sophisticated. It’s really made everyone raise their game. Today, there’s a strong focus on measurement and showing your return on investment for marketing that just wasn’t an issue 10 years ago.

And I think that, in recent years, this trend has really been influenced by some of the disruptors that are entering our industry who are clearly very sophisticated in their marketing strategies.

For example, when the news broke a few weeks ago about Amazon exploring getting in to the hospital space, people’s pulses got raised by that. But that sort of pressure is going to cause healthcare marketers to get better and to really strive to know the customer better.

I’ve also noticed another trend, too, as we’ve gone through this era of greater healthcare consolidation creating more sophisticated marketing and communications departments, we’re also attracting people from those external disrupters to the industry.

We’re getting people who are joining us from retail, joining us from Amazon. And they have a very sophisticated approach to consumers and marketing. So again, that’s raising the bar for our profession.

Another effect of hospital and health system consolidation for marketers who work in these organizations is that, almost overnight, you’re part of an organization that has doubled in size.

So as a Director, VP or Manager, you’ve really got to figure out how to scale your marketing function. The tools, the messaging in your campaigns – you have figure out how to spread that across the organizational footprint.

At least for me, those are some of the main areas that these consolidation trends in the industry are really driving right now. It really boils it down to a lot more need to be sophisticated and a lot more need to be looking for measurement than we ever did in the past.

Lonnie Hirsch: So as you have experienced this since the time that Providence and St Joseph merged, to what extent and how has the organization rebranded itself?

Alan Shoebridge: In addition to Providence and St. Joseph, we’ve had some smaller mergers and acquisitions and partnerships along the way, too.

As our two larger parent organizations came together about 18 months ago, we’re finally now getting into the process of our own marketing communications department being integrated that the rebranding conversation is being driven.

Obviously there’s a branding consideration as to how we are going to brand this new, larger entity and we’re still developing that strategy. So, as we got more into the logistics of putting the two organizations together, we did work at both the corporate and employee level.

Eventually, we started seeing the name Providence St Joseph Health displayed at our corporate offices. But in some ways, we’re still operating our individual brands in the markets where they have a legacy brand reputation.

So there are times when we use the larger, merged corporate brand for certain audiences, like with stakeholders and politicians or with some large policy issue. But when we’re talking to all of the employees, we call all our employees “caregivers.”

You might see the Providence St Joseph Health brand more prominently in certain markets, but we don’t just force the merged brand into a market. We really look at the strategy in each market.

There are some markets where both brands are active and a combined brand identity might make sense in those markets.

We’re exploring that deeply in other markets where that’s not the case, where maybe just Providence operates or just St Joseph operates, we really want to be careful not to degrade the value of those legacy brands, so we’re taking a very careful considered approach to that.

I think overall it’s an area where we’re trying to proceed with caution and validate the value of putting in that larger, merged brand in any specific market, because it requires a huge investment of time, money and resources. We evaluate the risk of confusing our core constituents. So, in some respects, we’re still in the infancy of figuring out what our consumer-facing brand is going to be. And there are a lot of considerations we’re looking at.

Lonnie Hirsch: So as it relates to the time and cost issues you mentioned, how much emphasis do you put on measurable results, in terms of patient acquisition and retention numbers, for example, versus top-of-mind brand marketing and reinforcement?

Alan Shoebridge: We put a tremendous emphasis on measurement. In terms of budget investment in branding in a consolidating industry where we already have pretty well-known and highly-regarded brands, we have to recognize that there is just less money for those types of marketing activities than maybe you had in the past.

I don’t think there are many health systems that haven’t seen their margins shrink over recent years. As a nonprofit, of course, we don’t focus on having huge margins, but in previous times, we had a little bit more budget to work with. We had a little more room to invest in marketing.

When you’re doing marketing these days, I think the vast majority of what you do has to be measurable considering what is going on in the industry.

But if you have a market where you may be trailing your competitors in awareness and preference, you’re not going to abandon branding efforts in those markets. In markets like those, you may want to make some bigger investments in branding to move the needle on awareness and preference.

We are also fortunate today that a lot more of marketing is measurable. It is not always directly measurable to specific revenue, but you can see what sort of impact you’re having.

In a perfect world, you would do both. You would have marketing that moves the needle on patient acquisition and retention, but you would also have a brand awareness and reputation layer.

I think we see that with large, ambitious companies in all industries, like we talked about with Amazon, they’re running TV spots during the Super Bowl because they want to reach people at a certain time when they might be paying more attention, in order to generate interest at a time when the consumer might not be thinking about them.

It’s been the same in healthcare. People are not always thinking about us. So, ideally, there’s some combination of a brand layer and then a very specific layer of marketing that’s trying to drive action, and it’s just an issue of finding the balance.

But I just think overall, with the vast majority of what you’re doing in marketing, you’ve got to be able to tell a story to your stakeholders about the impact it’s having, and that that means you’re going to have to measure it.

Lonnie Hirsch: You were talking earlier about how you look at the brand in various regions based on their legacy in their markets. How much marketing autonomy do your individual hospitals have, and how much is dictated by the system’s marketing department?

Alan Shoebridge: We operate in seven states and there’s a strategic approach in each region. So you may have a southern California region or Oregon region including multiple hospitals, but you usually have a marketing leader who’s making decisions for that entire region. Then we also have a system layer of available marketing resources. The regional autonomy is focused on the specific strategic needs in each market within the region.

At the system level, we don’t want to get in the way of that. The needs have to surface locally and they do that by partnering with our business partners, strategy officer, chief executives in identifying what those needs are.

At the system level, we really want to help them capitalize on those business opportunities. And we do that by offering some centralized services – research, creative analytics and more. I think the type of expertise is really hard to resource locally.

So the local markets really determine the strategic needs and then we help them stratify that and really dig down into where they can have the most impact, what kind of strategies are going to be helpful and in some cases, actually execute it for them. It’s definitely a partnership.

Lonnie Hirsch: As it relates to hospital acquisition of additional outpatient clinics, how have you seen that affect your marketing focus and your budget as it applies to how much of it goes toward marketing hospital service lines versus marketing these outpatient clinics?

Alan Shoebridge: A couple of years ago, we began to take an approach to really looking closely at where the greatest business opportunity can be identified. In the past, we may have made more of a sweeping decision about budgets that we’re going to take 50 percent of the budget, put it here, 25 percent here and another 25 percent there.

But we really move to allocating budget based on our business opportunity in each area. So, potentially, in some markets, you could take 100 percent of the budget and put it toward the outpatient clinics because that’s where all the growth is in that market.

I think you have to look at it by market. As we do that, we have a process that starts with a conversation with a business partner. So it may be the CEO of a region and maybe a strategy officer and identifying the priorities together.

That could be primary care, specialty care or a specific service line. But what rises to the top from the business partners has to be based on what their priorities are. The key is getting agreement on that focus, and then the marketing team needs to build a plan that’s aligned to those priorities and work the plan and make adjustments proactively.

A big shift in the industry and what I believe marketers want to be doing is being more proactive rather than reactive and having that plan and reviewing it frequently is as the key to doing that.

So I think that the proper process is not really to think about how are we going to take the budget and spread it out to all these areas, but rather to start with the strategic needs and assign the budget to those needs.

We’ve seen really good success with that approach. And once you have those priorities, marketing needs to filter all of the specific marketing support requests in the context of the strategic needs that were established.

For example, is this something we identified early on in the year? If there’s a new opportunity, does it bump something else down the list?

I think there’s very few marketers working today who have more budget than they had in the past. So you’re trying to be very smart with the use of the budget you have. Having that agreement up front about business priorities helps us align those priorities very closely to the marketing plan.

So it’s very important as new marketing priorities are identified either proactively or reactively, what are the filters that you can run it through as a marketer and evaluate how it makes sense within the context of the overall plan.

And while it should be very obvious, we’re even asking questions like, “Is there access?” I mean, if you can’t make an appointment for six months, what good will the marketing do? If access is a problem, maybe there’s a better thing to market out there.

For example, if patient satisfaction is higher, more people self refer for a service and maybe tell friends, family and coworkers as well. What’s the financial impact there?

When you can work to identify and assess priorities with your business partners and run it through some of those marketing filters, you’ll be able to say, this is where we should put the dollars because it’s going to have impact and it’s going to have an immediate result in driving business.

That’s the way I like to look at it and decisions naturally shake out from there. So you may have a situation in a particular market where you don’t do any service line marketing because maybe there is no access, but you’ve got a lot of opportunity and access in your outpatient setting or primary care clinics. And I think that’s the right way to go about making those decisions.

Lonnie Hirsch: As we talk about changes in approach to marketing budgets and how they’re not growing, and, in many cases, shrinking, it wasn’t too many years ago when most hospitals or the health system would typically have an outside agency of record that would handle a lot of their creative and other projects. Given the changing landscape as you see it, how much of your branding, messaging and creative output do you handle in house these days versus engaging an agency or several agencies?

Alan Shoebridge: We have been fortunate, given the size and scale of our organization to have a really robust internal creative services team. I can’t estimate a certain percentage of budget that goes to agencies, but the majority of things, especially the bigger campaigns, are done in house.

We do have line partners when there’s overflow or when there’s specific expertise required that we might not have in-house. But as organizations get bigger, there is more opportunity to invest in an internal team.

I think there are very good advantages to having a strong internal team. First and foremost, they live the experience in working in your organization every day.

You can bring in a partner agency from the outside and if you worked for them for many years, they get to know you. But I think it’s still not the same as having people that work for you do the campaigns.

The internal team knows the organization. They know the voice of the organization. We live it every day. There’s a real advantage to that.

For smaller organizations, it’s a bigger stretch to create that type of internal resource. Besides budget, in slower times, you might not have enough work and then you might be worried about flexing the team up or down.

We’re fortunate that we probably have more work than we can ever handle. And the challenge maintaining an internal group is actually trying to filter out all the small stuff, all the work that maybe won’t have that much impact.

We may farm out some of that work so we can really concentrate on the high-level campaign and brand work. That’s the adjustment we’ve made over the last few years. With declining resources, how do we make sure that our internal team is aligned to the highest value campaigns?

Other organizations might say, well we don’t do a lot of large campaigns, so bringing in an agency to do the high level stuff may make sense in those situations so the organization can dedicate some of its internal team to just keep the lights on and the doors open.

I think there’s value in either approach, but for us, we’re fortunate to have that internal expertise to work on some of our more high profile campaigns.

Lonnie Hirsch: What skills and expertise do you look for in staffing your marketing team?

Alan Shoebridge: As a leader of people, a manager, I’ve probably changed my opinion over the years. As I’ve become a little more experienced, I look for different qualities, and a solid marketing background is obviously very helpful.

But what I see making even more of a difference are some of the soft skills. For people with a healthy curiosity, there’s more opportunity to experiment than ever before.

I want someone who’s going to challenge assumptions, think about different ways to do things. Again, we’re so lucky today that it’s not just throwing a billboard out there, there’s so much we can do digitally – social, SEM, other things that are just great opportunities to dig in and think about. Let’s try something, see if it works.

If it doesn’t work, then we’ll focus our efforts somewhere else. But I value that ability to be curious, ask questions. I think those people begin looking for innovative solutions. I

People with good attitudes who do well working with other people are really important, because, frankly, a lot of the marketing skills can be taught and learned, where some of the softer skills are more difficult to find.

So I tend to look for a blend of both. Obviously, some grounding in the basics of marketing is really important, as well as some experience with digital. We like to look for marketers who are well rounded.

I recently heard someone at a conference say that all marketing is digital now. Of course, not everything we do is digital, but if you’re not grounded in that space, I think is going to be really hard to have the right perspective.

So I think those are some of the fundamentals. And the ability to navigate through some of the internal bureaucracy as organizations get bigger and to be able to work with people to get things done is very important.

If you went from having 2,000 employees 10 years ago to 20,000 today, things get more complicated and difficult to do. So having that sort of organizational agility is very important in the marketing space. I can’t emphasize that enough.

Lonnie Hirsch: Alan, thank you very much for sharing your insights with us today.

Alan Shoebridge: I’m glad to have the opportunity.