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Extracting value

Marketing segmentation could improve NHS efficiency

orange pictureInitiatives put into place over the past couple of years such as patient choice in England, Payment by Results and introducing competition with Independent Treatment Centres (ISTCs), for example, are indications that the NHS is evolving from a treatment- or provider-led service, to a patient-led one.

However, this shift cannot come overnight. The implications for managers are varied and complex, but one fact that emerges clearly is that the challenges of creating a patient-led service are marketing challenges. It is by adapting marketing techniques that have proved their worth in the private sector, that the NHS will reap real benefit and see significant change.

A marketing approach can help NHS managers understand the market better. By segmenting the market they will be able to identify where significant needs are, allocate spend more effectively, and cut out wastage. Marketing identifies where value lies, and helps managers and consultants operate in ways that will increase that value, while working within the confines of existing budgets. A successful marketing approach will not ask for more budget from the government, rather it will seek ways of using what's available more effectively.

An example of this can be seen in the recent recommendation by the NHS Confederation to reduce pressure on A&E departments by increasing the use of GPs through cross-charging. Another is the government's initiative to increase public awareness of how pharmacies can be used in many cases where appointments are currently made with GPs. There's a lack of understanding from the public about the expertise available from pharmacies, and that they also offer facilities such as screening and regular monitoring. A marketing focus could identify and develop these initiatives. It could also 'sell' them to the public by thinking from the customerís point of view and showing how these initiatives are focused on the individual: pharmacies are open at convenient times; you donít have to book time in your diary for the appointment; it takes less time; etc.

Identifying and implementing solutions such as this, ie utilising under-used services in one area to alleviate stretched resources in another, is a key way of thinking strategically about the NHS and extracting greater value.
 
Communicating for effectiveness
Another very useful benefit of a marketing approach is in communications. Better communications can be used both internally and externally to create a more productive service. Internally it can be used to get consultants and managers to co-operate more effectively, and externally to explain to patients (and the media) why decisions have been made in certain ways.

Internally, a patient-focused approach means that both managers and consultants will start to recognise that they are two halves of an important whole, and that one cannot do the job without the other. It may also help some consultants understand that customer satisfaction is a key goal of any paid-for service. Customer satisfaction includes, but is not limited to, the excellent treatment that the consultant provides.

Indeed, internal use of the word 'customer' rather than 'patient' could be key here, because 'patient' implies a passive receiver of advice and treatment whereas 'customer' recognises that the individual is an active player in the process, and needs to be treated accordingly. This in itself will have positive knock-on effects for the NHS' finances.

Externally, adopting effective private sector methods of communicating to customers means you can explain to patients that decisions have been made with their interests at heart, in ways they understand. Such an approach could lead to a de-escalation of complaints from patients and their relatives. A reduction in the NHS' expensive complaints compensation would save money that could be ploughed back into the service.

A focus on staff
A marketing approach recognises that staff are the core asset, and that by motivating, encouraging and mentoring them, you get a more productive workforce. Turning employees into advocates for the organisation, or encouraging them to 'live the brand' are ideas common in the private sector, but vaguely understood and occasionally treated with suspicion in the public sector. Far from being distracting corporate fluff, such initiatives create a workforce that communicates its positive support for the organisation to the customer - creating trust and faith in the NHS.

In an organisation as large as the NHS, and so squarely in the public eye, all managers need to take personal responsibility for how the health service is perceived in the wider world and be able to express, in constructive and reasonable terms, rather than defensively, why decisions are taken. One problem with changing the service, however, is that making changes unilaterally proves to be almost impossible logistically; when regions or trusts are empowered to make changes that are achievable and will benefit patients, the media quickly pick up on differences between the regions and present this as 'postcode lotteries' or unfair discriminations.

Recruiting managers with communications experience, and giving existing managers training in communications, will contribute to resolving such scenarios. Managers will then be able to communicate the rationale behind their decision making, and demonstrate that good planning in the NHS invariably involves difficult choices - this could mean individual complaints emerge from decisions taken for the greater good.

Flawed but inevitable
There is, of course, a problem with the concept of patient choice - the patient is frequently not the best judge of his or her needs. Nothing that the marketer can bring to the organisation should be driven through if it conflicts with clinical judgement. But with less than 50 per cent of staff believing that patient care is the top priority in the NHS, it's clear it is time for an approach that puts the patient, or customer, at the centre of the process.

A caveat to the patient-centric approach is that increased choice does not necessarily mean a better service. For example, the benefits of having a centre of excellence in some specialist fields outweigh the benefits of offering increased patient choice by fragmenting services. When this impacts on what patients want, a balance has to be struck and the rationales communicated more effectively than they are at present.

So far, the evidence shows that a marketing-led approach is working. The competitive marketplace in England has led to dramatic falls in waiting times and the '18-week' target is increasingly being met. While 18-week targets are problematic in themselves, the sound conclusion is that principles from the private sector can be employed to bring about positive change in an organisation that is often perceived as stagnating.

Financially, too, a private sector approach has brought positive change. An Audit Commission report forecast an NHS surplus of £983m for 2007, up from £515m in 2006, and it reports that two-thirds of NHS trusts are now in good financial health. 

Offering choice creates these advantages. A more commercial viewpoint stimulates trusts to offer better services and work more robustly, as it can no longer be assumed that patients will passively accept what is on offer to them. Thanks to the internet, patients increasingly have access to channels of information other than their GPs, and arrive armed with knowledge of their condition and the various treatment options and developments available in clinical practice. Patients expect to participate actively in their programme of care, and not be treated as passive recipients. While any patient-centric approach must not conflict with consultants' decisions, it should be embraced rather than resisted.

The final benefit that a marketing approach can bring is measurement - evaluating the success or otherwise of initiatives - so that managers can decide how to improve or change them in future. Gaps in service or under-utilisation of resources can then be attended to.

A change of image
Marketing should be a popular concept within the NHS, because it is about putting the patient first - the reason most people joined the NHS in the first place. Marketing could help shift the focus away from number-crunching, towards serving and looking after the patient. But for marketing to succeed, it needs to be viewed as a positive and useful concept by managers and employees at all levels, and not as yet another time-consuming project imposed on already stretched employees.

To achieve this, marketing needs support from the CEO downwards, and NHS equivalents for marketing jargon need to be found. NHS-friendly alternatives for concepts such as 'segmentation', 'value' and 'market insight' need to be discovered and applied if marketing is to be viewed without suspicion.

Marketers are change agents, but that process of change can only work if it has broad top-down and bottom-up support; otherwise it is merely tactical and cosmetic.

There's significant distrust from some quarters of the NHS about what marketing is, and what it can do. But contrary to some popular opinion, marketing is not about spin, or about making trusts fight each other to compete for patients, or encouraging them to spend money on unnecessary advertising of services. When done properly, marketing is about thinking strategically in order to improve the service and experience for patients, apply budgets efficiently, help managers and clinicians communicate with each other, and measure the effects of decisions taken, to make the service even better in future.

A recent paper published by The Chartered Institute of Marketing, The real NHS: the benefits of a marketing approach, outlines some of the challenges facing the NHS as it tries to become a patient-focused service, and gives suggestions for managers on how to balance conflicting priorities to offer the right products and services, in the right place, at the right time. Marketing canít solve all of the NHS's problems, but it will help gain patientsí support by helping them see that decisions are made for their benefit. Bringing more marketing knowledge to all levels of the organisation will help clinicians work together more effectively (to the benefit of the patient), create the service that patients want and need (where such wants and needs do not conflict with clinical judgement), communicate the benefits more effectively to the media and give analytics for future improvement.

Customers don't buy a product or service, they buy a solution. More marketing knowledge in the NHS will help deliver those solutions in the long term.

The Author
David Thorp
is director of research and information at the Chartered Institute of Marketing

18th July 2008

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