RSNA News - April 2005

Competition Drives Need for Marketing at Outpatient Academic Centers

The physician lunches were key to the strategy because they allowed us to develop loyalty in our relationship with the local medical community.
—John A. Pezzullo, M.D.

John A. Pezzullo, M.D.

Brown University Medical School, Providence, R.I.

Outpatient academic radiology centers face increasing competition for imaging services from private radiology practices and for-profit MR imaging facilities.

To survive in this highly competitive environment, academic radiology centers need to develop sophisticated marketing strategies to maintain referrals and revenues, according to John A. Pezzullo, M.D., from Brown University Medical School in Providence, R.I.

Speaking at a scientific paper session on health services, policy and research at RSNA 2004, Dr. Pezzullo described an effective marketing strategy adopted by his academic practice that employs 50 radiologists working in four hospitals.

"Fourteen years ago in the state of Rhode Island, there were 12 magnets (MR imaging machines) serving a population of one million people, most split between hospital and private-practice groups," Dr. Pezzullo said. "Currently, there are 49 magnets in our state with the same population. Most of those are divided among for-profit imaging centers and non-radiologists. The impact is twofold—potential large losses in outpatient revenue and increased marketplace competition."

A number of factors are driving increased competition, he noted, such as higher reimbursement for MR and CT services compared with other imaging modalities, direct marketing by equipment manufacturers and an influx of for-profit imaging companies that have their own marketing departments.

Marketing Your Outpatient Academic Center Hire an in-house marketing staff Develop strategies for direct-to-patient marketing Create a new logo and slogan Advertise on billboards and in local newspapers and magazines Create brochures describing your practice's services Develop a Web site Develop strategies for direct-to-physicians marketing Hold radiology case-review breakfasts for referring physicians Host one-on-one lunches with referring physicians Give continuing medical education lectures Develop a promotion package for physicians

"In order to effectively compete in this market, we developed an overall marketing strategy," he said. The practice hired an external marketing consultant, created an internal marketing department and developed strategies of direct-to-patient and direct-to-physician marketing.

The marketing consultant performed a market analysis of several factors including patient and physician demographics, the location of competitors and patterns of referral. The consultant used focus groups of referring physicians to determine the reasons why physicians chose one provider over another.

"We then developed a comprehensive marketing plan to increase name recognition and to educate the consumer, both physicians and patients," Dr. Pezzullo explained. The practice hired four individuals who work in the in-house marketing department and serve as liaisons between the referring community and the practice.

As part of a direct-to-patients marketing strategy, the practice developed a new logo and slogan, placed ads on billboards and in local newspapers and magazines, created brochures available in the office that described the practice's services and developed a Web site.

As part of the direct-to-physicians effort, the practice held radiology case-review breakfasts for referring physicians once a week and one-on-one lunches with referring physicians three or four times a week, gave continuing medical education lectures and developed a promotion package for physicians with an ordering form, biographies of physicians in the practice and information about services.

"The physician lunches were key to the strategy because they allowed us to develop loyalty in our relationship with the local medical community," he said. "As a result of the marketing effort, we had a dramatic increase in our volume of imaging studies between 2001 and 2004."

In 2001, the practice's MR and CT volumes were 803 and 1,099 exams per month, respectively, at its outpatient imaging centers. After implementing the marketing strategy, MR volume increased 16 percent to 951 exams per month in 2002 and 30 percent to 1,154 exams per month in 2003, despite the fact that six competing MR sites opened in the area in the same time period. CT volume increased 1.4 percent in 2002 and 14 percent in 2003. In addition, the number of first-time referrals rose 20 percent in the same period.

"Our conclusion is that marketing may be necessary in outpatient academic centers to allow them to remain profitable in increasingly competitive environments, and physician-to-physician interaction may be a key component of this marketing strategy," Dr. Pezzullo said.