Health care marketing is interesting when considering military treatment facilities. Naval Hospital Pensacola, according to Ludvigsen and Carroll (2003), is limited in the scope and manner that administrators are allowed to use federal monies to fund marketing efforts. Since budget cuts forced many military installations to close, and with them the attached military treatment facilities, efforts have been made, through programs like Tricare, to redirect the military health care market to the civilian care providers; however, hospitals that remain in operation, such as Naval Hospital Pensacola, have found that their market share has decreased sharply over time.
Naval Hospital Pensacola developed a marketing plan in 2003 to address the 5,000 enrollment opportunities that were left vacant due to military restructuring and Tricare development.
About Naval Hospital Pensacola
Naval Hospital Pensacola, a 60 bed facility, is the second oldest Naval hospital. The services provided by Naval Hospital Pensacola are primarily primary care, but the facility also has five operating suites and also provides urology, orthopedics, obstetrics and gynecology, among other services and operates with a budget of $64.5-million (Ludvigsen & Carroll, 2003). Naval Hospital Pensacola’s pharmacy is said to be the fourth busiest in the Navy, according to Ludvigsen and Carroll (2003).
Marketing Naval Hospital Pensacola
In order to analyze the potential for additional capacity, Naval Hospital Pensacola formed a committee whose recommendation was that an additional 5,000 enrollee capacity was possible. The hospital, at the time of the plan formulation, served approximately 19,000 enrollees. The Managed Care Department of Naval Hospital Pensacola then developed this marketing plan to answer the recommendations of the capacity committee. Additionally, “the hospital implemented a policy which requires TRICARE Prime enrollees moving within [Naval Hospital Pensacola’s] catchment area of 40 miles, to use [Naval Hospital Pensacola]” (Ludvigsen & Carroll, 2003, p. 1). This policy ensured that certain Tricare recipients must utilize services provided by the naval hospital and dissuaded them from using civilian services that other Tricare recipients were allowed to use. This policy, according to Ludvigsen and Carroll (2003), provided additional access to approximately 10,000 Tricare Prime recipients residing within the 40-mile catchment area of Naval Hospital Pensacola.
The marketing plan (Ludvigsen & Carroll, 2003) provided internal and external analyses that showed staffing was adequate for the proposed growth and, unlike the civilian sector, the funding would be made available based on use as Naval Hospital Pensacola is a military treatment facility whose budget relies on enrollment and not on cost-savings. “Because [Naval Hospital Pensacola] derives its funds via Federal appropriations, [Naval Hospital Pensacola’s] administration does not experience the financial pressures that civilian counterparts face, and can focus on quality issues” (Ludvigsen & Carroll, 2003, p. 7). Additionally, Naval Hospital Pensacola relies on the concept of one-stop shopping for enrollee health care needs as a marketing strength.
However, the SWOT analysis detailed within Ludvigsen and Carroll’s (2003) marketing plan admits that the naval hospital suffers access of care issues as a main vulnerability. This, coupled with a broken promise image, allows three other area hospitals to fulfill this marketing void. “Effectively competing requires improving quality of care, creating access, improving facilities, providing amenities, and promoting these accomplishments” (p. 9). Examples of Federal legislation are provided to show the marketing disadvantages of military treatment facilities.
The primary objective of the marketing plan (Ludvigsen & Carrol, 2003) is to increase enrollment by 5,000 Tricare Prime recipients, mainly within the internal medicine, family practice, and pediatric clinics. In order to be viewed as successful, the minimum additional enrollment must be 2,000 over the next two years, again targeting 5,000 additional enrollees.
The marketing plan (Ludvigsen & Carroll, 2003) of Naval Hospital Pensacola utilizes a combination of three models in order to focus the hospital efforts. The first model is the traditional marketing mix model detailed by four components: product, placement, pricing, and promotion. The second model, based on the hospital’s own consumer marketing studies, include four components, “the Four C’s” (p. 21): competence, convenience, communication, and compassion. The final model, based on the Institute of Medicine’s (2001) health care improvement aims and objectives, includes safety, efficacy, patient-centricity, timeliness, efficiency, and equity.
Using a matrix to match the qualities of each of the three models, criteria were developed to further synthesize the goals of the hospital, its marketing theory, and the expectations of the targeted health care consumers. Representation of this combined modeling, however, starts to confound the reader by unnecessary references to concepts of quantum physics. The model is concisely represented by three dimensional representation with patient-focus in the middle of a pyramid formed between product, access, efficiency, and promotion.
Being a military treatment facility and being highly governed by Federal legislation, Naval Hospital Pensacola is not a typical health care organization. In order to market improved or underutilized services, the hospital requires a novel approach, which is outlined within the marketing plan of Ludvigsen and Carroll (2003).
Naval Hospital Pensacola does well to focus, first, on the strengths and weaknesses identified by internal and external analyses, then, developing a plan that exploits the strengths to develop a means of overcoming the identified weaknesses. By focusing on industry-accepted aims and objectives, Naval Hospital Pensacola demonstrates improvement in measurable areas to attract additional enrollment. It is important to note, however, that, being a military treatment facility, the hospital enjoys a rare advantage of being able to pass rules mandating enrollment of certain beneficiaries within the prescribed catchment area.
The plan is an effective means of overcoming certain identified obstacles. It is realistic, allowing for fail-soft situations (or, minimal standard improvement), and comprehensive plan that addresses a true marketing need for both the hospital and the target health care consumer.
Institute of Medicine. (2001). Crossing the quality chasm: a new health system for the 21st century. Washington, DC: National Academy Press.
Ludvigsen, S. M. & Carroll, W. D. (2003). Naval Hospital Pensacola marketing plan. Retrieved from http://www.tricare.mil/familycare/downloads/marketing_plan.pdf