Hospital selection by managed care insurers.

This article focuses on which factors influence the ability of hospitals to attract managed care patients. Data for the analysis were obtained from a national sample of 235 acute care hospitals in 1996. The results indicate that the costs of inpatient care, participation in an integrated delivery system network, and hospital size were the critical factors in determining the ability of hospitals to obtain managed care business.

Risk-sharing integration efforts in the hospital sector.

The extent of hospital involvement in integrated delivery systems (IDSs) during 1996 was assessed by a national sample of 235 short-term private general hospitals. Two out of five hospitals were participating in networks with some financial risk sharing, and another third reported membership in IDS networks without financial obligations. Managed care's presence was the only significant factor moving hospitals from a stand-alone status to network membership. The decision to share financial risk was influenced not only by managed care pressures, but also by the level of local hospital competition and the severity of the inpatient case mix.

The effect of managed care on hospital marketing orientation.

Marketing is a central activity of modern organizations. To survive and succeed, organizations must know their markets, attract sufficient resources, convert these resources into appropriate services, and communicate them to various consuming publics. In the hospital industry, a marketing orientation is currently recognized as a necessary management function in a highly competitive and resource-constrained environment. Further, the literature supports a marketing orientation as superior to other orientation types, namely production, product and sales. In this article, the results of the first national cross-sectional study of the marketing orientation of U.S. hospitals in a managed care environment are reported. Several key lessons for hospital executives have emerged. First, to varying degrees, U.S. hospitals have adopted a marketing orientation. Second, hospitals that are larger, or that have developed strong affiliations with other providers that involve some level of financial interdependence, have the greatest marketing orientation. Third, as managed care organizations have increased their presence in a state, hospitals have become less marketing oriented. Finally, contrary to prior findings, for-profit institutions are not intrinsically more marketing oriented than their not-for-profit counterparts. This finding is surprising because of the traditional role of marketing in non-health for-profit enterprises and management's greater emphasis on profitability. An area of concern for hospital executives arises from the finding that as managed care pressure increases, hospital marketing orientation decreases. Although a marketing orientation is posited to lead to greater customer satisfaction and improved business results, a managed care environment seems to force hospitals to focus more on cost control than on customer satisfaction. Hospital executives are cautioned that cost-cutting, the primary focus in intense managed care environments, may lead to short-term gains by capturing managed care business, but may not be sufficient for long-term success and survival. Understanding consumer needs and perceptions, and using appropriate marketing strategies to ensure greater customer satisfaction and repeat business, will be among the key tasks for hospital executives in the future.

Marketing research activities in hospitals. Satisfaction surveys of inpatients and outpatients are the most widely used application.

Virtually unheard of in health care 30 years ago, marketing research by hospitals is expanding at a notable rate, particularly among larger institutions located in highly competitive urban markets. Research applications are particularly pronounced at for-profit institutions, those heavily involved in managed care programs, and hospitals that are part of an integrated delivery system. However, the majority of hospital administrators surveyed indicated they do not invest in marketing research to track the effectiveness of their own institution's advertising.