How New Marketing Strategies Could Mean New Opportunities for Hospitals

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Marketing and advertising have become routine for hospitals and health systems today. Competition is fierce, revenue dollars are prized and capturing the attention of a more cost-conscious patient has become paramount.

But the traditional tactic has been hospitals go out into the community and spread their message through billboards, radio messages or TV commercials. Now, advertisements are starting to enter the hospital campus — and it's presenting a new opportunity for both exposure and the bottom line.

Michael Ricciardi is a partner of strategy and business development at Innovare Medical Media. Innovare, founded in 2011, works with hospitals and health systems to build and operate marketing venues, which it calls "community showcase models," at their sites.

"We install various signage throughout the hospital campus," Mr. Ricciardi says, noting that parking garages, elevator banks and cafeterias are untapped assets at hospitals. "But the hospital partners have total control over the program and what it looks like."

StLukesInnovareFor example, earlier this April, St. Luke's University Health Network in Bethlehem, Pa., partnered with Innovare to build electronic signage throughout the multihospital network. St. Luke's incurred zero capital costs, meaning Innovare covered all expenses associated with hospital branding, digital technology, European-style displays and static signage. About 80 percent of all ads feature local services and businesses — such as banks and colleges — while the remaining 20 percent highlight St. Luke's own services.

"Hospitals have hundreds of products they need to market but don't have the budget," Mr. Ricciardi says. "If they want to promote their top orthopedics group in the region, our program gives them a new vehicle to reach existing patients and potentially new patients that are visiting."

Mr. Ricciardi says hospitals gain the new exposure on their own campuses, but they also earn a new line of revenue. Hospitals can generate anywhere from 20 to 35 percent of the revenue. For St. Luke's, the system and Innovare are expected to share $2.4 million in revenue during the life of the multiyear contract.

Several other hospitals and health systems in the Atlantic area — including North Shore-LIJ Health System in Great Neck, N.Y., Winthrop-University Hospital in Mineola, N.Y., and Somerset Medical Center in Somerville, N.J. — have also partnered with Innovare.

"The feedback has been overwhelmingly positive, and we are growing rapidly," Mr. Ricciardi says. "We are working with hospitals throughout the country with plans to have 100 hospital partners by 2018."

Victoria Allen, vice president of marketing for Somerset, said the project has helped her hospital in several ways. "The displays not only gave us an opportunity to reach smaller businesses that we previously had no relationship with, but we were also able to promote our healthcare messages in key areas in a new and different way to a number of audiences," she says. "Other added benefits have included beautifying hospital property, as well as providing our physicians with a new opportunity to promote their practices. Best of all, the displays have generated necessary income for our Somerset Medical Center Foundation."

Although some worry advertisements may consume the sanctity of a community hospital, Mr. Ricciardi says the initiative is more about building new partnerships and increasing community involvement than a typical advertising program.

"We're trying to leverage the opportunity of just how the world is changing," Mr. Ricciardi says, noting that hospitals can only cut costs so much before they have to find new sources of revenue. "Initially when people hear about this program and think of commercialization, they ask, 'What would that look like here?' It's not until they see the program do they get it and are more likely to embrace it.

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