There is no doubt that the economic conditions of 2012 form a new and harsher environment for healthcare. Beyond that, special factors are now threatening those who practice medicine. How do medical practice owners across the country respond in order to survive, protect their bottom lines, and even succeed in this market? For the private medical practice to find its way as a small business, a new set of marketing and management strategies is now vital. However, innovative new solutions are rooted in the same principals that have always guided successful practices. The scale, scope, and implementation tools have changed.

For the medical practice, this is an environment under siege. Despite a declared “recovery” begun in June of 2009, data that reflect real life in the US depict a bleak reality. The Census Bureau told us that poverty rolls last year surged to 46.2 million Americans. The percentage of American living in poverty was the highest since the Census Bureau began tracking this number over 50 years ago.

Beyond that, one million more Americans lost health insurance, and household incomes overall fell sharply. The decade-long erosion in health insurance coverage sent the percentage of uninsured soaring by 16.3 percent—the highest rate of loss ever recorded. A driving factor is the elimination or reduction of health benefits by employers, while healthcare costs continue to climb. That trend has reduced the percentage of Americans who get health benefits through their jobs from a peak of 65.1 percent in 2000 to 55.3 percent last year. In that same span of time, the average annual premium for an employer-provided family health plan more than doubled from $6,438 to $13,770, according to the Kaiser Family Foundation. Median household income—a financial health indicator for the middle of the US population—fell 2.3 percent vs. the previous year to $49,445 in 2010, and seven percent from 2000.

Adding to the challenges of medical practice is the rising number of patients who still have health insurance, yet are forgoing diagnosis and treatment. The reason is clear. In recent years, many employers have sharply reduced benefits while raising deductibles and co-payments, so people have to reach deeper into their pockets. In 2010, about 10 percent of people covered by their employer had a deductible of at least $2,000, according to the Kaiser Family Foundation, a nonprofit research group, compared with just five percent of covered workers in 2008. The phenomenon is so pronounced that the New York Times clearly described the trend in May 2011, stating that Americans are simply “putting off care.” The anecdotal evidence is widespread, and the effects have actually manifested themselves in higher profits for insurance companies, who cite “low levels of medical use” as one of the drivers of their now-strong financial results.

Physicians interviewed by the Times, as well as CNN Money, described patients who put off important procedures such as colonoscopies and mammograms, neglect irregularities that could warn of disease such as skin cancer, and simply discontinue treatment for conditions their physicians have already confirmed. The results of deferred care and treatment are obvious. Certainly, patients' health is likely to suffer. In addition, the business of medical practice will come under even greater threats than it has already.

The question of how to approach medical practice marketing and management in this “new reality” is more challenging, yet vastly more important than ever. It centers on searching out and keeping the “highest quality” patients in the marketplace.

Maximizing market share among this segment of the population is the strategy that industry experts point to as the way to protect and even advance the business results of a medical practice in the new environment. It's the business model on which successful and ascendant practices will base medical practice marketing.

The High Quality Patient

Key characteristics define the ‘high quality' patient. Those with insurance will know their plans and be the most pro-active in utilizing them to protect and promote good health. In addition, these desirable patients—whether they have insurance, are partially insured, or uninsured—take the time to understand what constitutes good health, as well as the specific medical conditions that affect them and their families. Finally, the physician must maximize market share of the potential patients who are able to afford more than the bare minimum health care and are willing to devote the necessary resources. The educated, health-oriented, patient with both the will and the resources to care for their wellness...That's the bulls-eye. While physicians appreciate that sort of patient, it's also the basis for a mutually beneficial client-practitioner relationship.

How to reach this patient and build a relationship is the million-dollar question that needs to be answered by the healthcare professional, whether he or she is in family practice, a dermatologist, or any in any other specialized practice. The practitioner who can answer this question is the one best prepared to not only survive, but to prosper. The dollars in the market will decline sharply from what we know today. Now that mainstream media has shown us that there are private practice doctors going broke, capturing the strongest segment of the market that remains will be key. In fact, desirable patients will need to relocate from practices that have simply closed down.

The idea that a medical practice is a small business with the same financial risks as any other enterprise has been crystallized as media such as CNN Money recently reported a national wave of physicians who simply can't survive. Doctors are cashstrapped to simply make payroll and pay their bills.

Opportunities for Differentiation

It's a different business than it was only a few years ago. However, the ‘good' patients that doctors are looking for are out there. Yes, there are less of them, but they are out there. In different and more robust conditions, a simple marketing strategy of advertising to gain market-share in a local or regional sector might have been viable. That's no longer the case. One reason is the basic factor of affordability. Conventional approaches such as display or direct mail advertising are crowded and marked by unpredictable levels of response and return on investment.

Price promotion and traditional advertising impressions simply don't work as well as before. So how do you stick out? The key here is differentiation: Positive steps that differentiate a practice from its competitors, steps that engage new patients and form the relationship that not only keeps them coming back, but turns them into advocates and ambassadors.

I suggest adapting the model for the business of medical practice marketing, building a strategic model around two key foundations:

• First is building relationships and engagement with the community.
• Second, and closely related, is employing today's communication technology, including social media, to multiply the reach and the value of community outreach.

While there's no substitute for technical skill, education, and a high standard of care, there's more to the picture. Marketing strategist Harry Beckwith tells us in Selling the Invisible that “people don't buy how good you are; they buy who you are.” The thought leader in integrated marketing communications, Joe Phelps, told us in Pyramids are Tombs that even in cases of technically advanced goods or services, customers make decisions based on emotions, and then find the substantive reasons to support that decision. When a business truly connects with customers, then success can be achieved even in the worst environment. People like Baron Hilton, the Goldwyns and the Meyers showed us that during the Great Depression.

Relationships and Engagement

Relationship building can take a wide range of form, some related to clinical topics, and some entirely unrelated to the physician's own area of practice. While a doctor knows how to show good bedside manners to patients and to inspire the patients to refer other customers, how about the community at large? How does one build a tight relationship with the community around him/her? When a physician is engaged with his or her community, constantly building relationships with neighbors, influencers, colleagues, he has a way to reach high numbers of people— the right people—in a cost-effective way.

We advise our doctors not to spend too much time on going to networking meetings or joining rotary meetings or visiting other physicians one on one as those are simply too time-consuming for most physicians to carry out for a long period of time. But get a goodwill event organized, help the needy, and get the news out by engaging the help of free local press. Recently a doctor that we have consulted appeared on the front page of her local town newspaper featured as a local doctor doing good deeds. On the very next day, she received 100 real patient phone calls. That is the power of community exposure...without using advertising!

The second part of the strategy builds on top of the principles of community outreach and engagement. Utilization of today's communication technology, and the “connectivity” it offers, provides the great multiplier that extends the value of community participation. How so? We want to be organically engaged with the community around us all the time, and in multiple ways. Yet what physician—in fact, what businessperson— has that kind of time to devote? The great news is that in this age of digital connection, it can be done with an enormously efficient investment of time. Now a doctor's news can spread through blogs, search engines, digital press releases, utilization of video, and other channels that place the physician digitally into every corner of the community, delivering a positive message and value to his or her neighbors. It is essential to be aware how certain digital initiatives drive others. For example, video items will out draw other items in Internet search results by three to one. It is important to stay up-to-date on utilization of YouTube as extensions of the community. Importantly, YouTube videos should not follow the advertising guidelines, but give good and true information with an educational focus, a bit like an infomercial, but shorter and even less commercialized. The result is awareness on the parts of prospective patients, colleagues, advocates and influencers. The result is differentiation.

The extent of any particular practice's involvement in social media to develop community engagement will depend on the practice, its competition, and the community it serves. Social media allows for efficient engagement with minimal time commitment, but success very often requires that someone other than the physician him/herself manage the effort. Practices can hire experienced social media marketers or even invest in the education and training of an existing and interested staff member. However, the physician must get the knowledge himself or herself by hiring and learning from social media marketing firms. A doctor who wants to hire a staff to start Facebook and yet has little interest to find out how Facebook works will find money being flushed down the toilet. A patient cannot get well by getting his or her assistant to go to the doctor's visit on behalf of him. That patient needs to visit the doctor and educate himself on what he needs to do to get well.

In an environment filled with danger for the medical practice, there will be casualties, survivors and leaders. The most successful will be physicians who evolve as businesspeople through differentiation through community outreach, and robust employment of communication technology.

Helmut Flasch, International Business Consultant and author, is founder of Doctor Relations, Inc. He developed the award-winning marketing strategy “Un-Advertising” and is author of the book “Double Your Business But Not Your Troubles.” Readers can get more information and request a free practice income improvement consultation at www.DoctorRelation.com or call 800-625-2002.

Take Home Tips

For the private medical practice to find its way as a small business, a new set of marketing and management strategies is now vital. Innovative new solutions are rooted in the same principals that have always guided successful practices; The scale, scope, and implementation tools have changed. Medical practice marketing and management in this “new reality” centers on searching out and keeping the “highest quality” patients in the marketplace, building a strategic model around two key foundations: building relationships and engagement with the community and employing today's communication technology, including social media, to multiply the reach and the value of community outreach. The extent of any particular practice's involvement in social media to develop engagement will depend on the practice, its competition, and the community it serves.

How Consultants Help: Automation, Etc .

Most doctors make the mistake of jumping onto the band wagon of having a web presence and social media online by engaging in Facebook, Twitter, or YouTube, etc. without understanding the time and work involved to keep up the online presence. Thus you see many Facebooks or websites not updated and neglected after they were created. If you do not have the time to be on the computer every day, don't try to follow what other doctors are doing. Our advice from Doctor Relations is work with companies that will get you directly to be found on Google and work with internet companies that could automate the process of keeping your social media presence active. For example, we have helped doctors to create videos that could be found on Google's first page without the doctors' time involvement. Now the doctors' patient education videos could be picked up by anyone looking for that information. That is automation. That is smarter time management than spending time on things that you could not keep up forever, like doing entries in Facebook or Twitter or constantly having to write new articles for your site. Go for ‘smart automation' as best as you can when you are considering digital strategies.