By Benedict A Stanberry, Principal, IHLM.
There is a popular saying, usually attributed to American marketing pioneer John Wanamaker: “Half the money I spend on advertising is wasted. The trouble is I don’t know which half.”
This quotation came to mind during a recent visit to Dubai. Private hospitals and clinics have always appeared to thrive in this city and during recent years the Dubai Health Authority has been working hard to promote medical tourism. In 2016, however, there has been a noticeable proliferation of billboard advertisements by healthcare providers – particularly along Sheikh Zayed Road, the city’s main highway.
Whereas visitors and residents were once exhorted to buy expensive Swiss watches or receive a free Bentley with every off-plan purchase of a luxury apartment, these days the billboards of Dubai are populated by platoons of physicians. One example features a silver-haired doctor seated at a polished grand piano ready to serenade his patients back to health. Another memorable roadside message reassures that “brain surgery has never been safer”, though I do hope none of the passing drivers ever has to put that claim to the test, even if it is a perfectly accurate one.
What might this recent surge in healthcare advertising be telling us about the competitive intensity of Dubai’s healthcare marketplace?
Dubai’s healthcare marketplace is maturing
A review of the published literature pertinent to this question unearths a large cluster of research studies from the USA, all produced in the mid- to late-1980s: a time when regulatory and insurance reforms similar to those recently implemented in Dubai had given patients a greater choice of hospitals and greater participation in the process of selection. This led to escalating competition between healthcare providers and, for some, falling bed occupancy rates. It was now, as the market matured, that hospitals that had never previously done so turned to newspapers, magazines and billboards to promote themselves.
Given the number of new facilities that have opened in Dubai over the last few years, it would make sense for rivalry to increase in some segments of the city’s healthcare economy. Not long ago I spoke to a senior executive from the Dubai Health Authority who observed that profitable sectors such as orthopaedics were becoming saturated while there remained a dearth of services in specialties such as oncology. It was even suggested that the Authority might suspend the issuing of permits for new healthcare facilities in specialties where capacity now exceeded demand.
If we accept that Dubai’s healthcare market has entered a mature stage in its lifecycle, characterised by more intense competition and falling utilisation of some services, then there is another important question to ask. Are the city’s hospitals and clinics investing their money wisely when they commission advertising? Does healthcare advertising actually work?
Patient choice is driven by five factors
If I were to base my view solely upon the published healthcare management research, I would counsel any hospital or clinic to think twice before it calls in a marketing consultant or advertising agency. And here’s why.
One of the biggest challenges any prospective patient faces in choosing a healthcare facility or physician is what is sometimes referred to as ‘asymmetry of information’ – meaning that it is difficult for an ordinary patient to understand, and therefore to evaluate, the quality of a healthcare service before he or she has actually received or experienced it. Even after care or treatment has been received, it can often be difficult to determine how beneficial it has been. In theory, this should mean that advertising could have a powerful influence over a patient’s choices. Indeed, the fear that patients might be misled or deceived by healthcare providers who deliberately conceal information has led most European healthcare systems to ban direct-to-consumer advertising.
Reassuringly, however, most patients behave far more rationally than healthcare regulators realise. Time and again, research has shown that patients base their choices on five critical factors. These were first identified by two professors from the University of Minnesota – William Flexner and Eric Berkowitz – in a pioneering and much-cited research study, and verified again and again in subsequent studies. These factors are:
Advertising, according to the US evidence at least, has a negligible effect on patient choice when compared with these five fundamental drivers.
I believe that some segments of the healthcare industry in Dubai are today at the same point in their lifecycle as many American hospitals were in the 1980s and that patient choice is driven by the same five factors that were first identified by Flexner and Berkowitz.
Ask any group of Dubai residents which are the ‘best’ local hospitals and they will each name the same handful of institutions. Reputation counts for a lot, as does the word-of-mouth advice of the prospective patient’s family and friends. Social media is now growing that circle of advisers to include strangers. Just take a look at the online discussion forums on websites such as expatwoman.com and you can see how powerful the testimonials and past experiences of others can be when choosing a hospital or physician.
That is not to say that traditional physician referral networks no longer count for anything. Speak to hospital executives themselves and many will tell you that referrals are frequently the product of both informal and formal arrangements with Dubai’s primary care clinics.
Be your own best advertisement
So, if advertising really does such little good, where should a healthcare facility spend its money instead? My personal opinion is that it should be spent on improving or transforming the things which the research evidence has told us patients base their choices on: quality, safety, and the patient experience. These are the domains where reputations are built, or destroyed. No amount of advertising can convince a patient to use a hospital where waiting times are unpredictable, processes are chaotic, communication is poor, or staff are rude.
Some of the best hospitals in the world, including the famous Cleveland Clinic, use visual and experiential clues to make sure that the patient always comes first. This includes the way they hire and train staff, the design of their facilities and the way that their healthcare professionals collaborate to deliver integrated care that meets all of the patient’s medical, social, psychological and spiritual needs. The result is that even without advertising, the hospital enjoys greater brand recognition in the region than perhaps any other healthcare institution. Hospitals such as Cleveland Clinic are living, breathing advertisements for themselves.
No hospital can build a reputation for quality overnight. As perhaps the greatest quality expert of our time, W Edwards Deming, once said: “there is no instant pudding”. But quality, and a reputation for it, surely offer a far greater and more sustained return on investment than a poster of a piano-playing doctor, glimpsed briefly from a speeding taxi?
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