Marketing Tips After Private Practice Acquisitions
By Stewart Gandolf
Chief Executive Officer
We’re living through a seismic shift in how physicians deliver medical care in the United States.
Here’s a brief timeline:
- In 2012, 60.1% percent of physicians worked in physician-owned practices.
- By 2018, that percentage had fallen to 54%.
- At the end of 2020—for the first time ever—less than half (49.1%) of patient care physicians worked in private practice.
- According to Avalere Health, nearly three in four doctors work for a hospital, health system, or corporate entity today. In other words, only 26.1% of physicians remain in private practice!
COVID significantly accelerated the trend away from private practice. Since the start of the pandemic, tens of thousands of doctors have abandoned their privately-owned medical practices in favor of working in a hospital or larger medical group.
What does this mean for medical marketing, and how can hospitals and corporate entities with new physicians pivot their marketing strategies to meet their changing business needs and objectives?
In this blog post, I share:
- Statistics on private practice physicians (then and now),
- Why more physicians are choosing hospitals and corporate entities over private practice,
- And marketing tips for hospitals, corporate entities with new physicians, and private practice physicians who want to stay independent.
Private Practice Physicians: The Numbers Then and Now
As we mentioned earlier, nearly three in four doctors now work for a hospital, health system, or corporate entity, according to an April 2022 survey from Avalere Health—a 7% increase from 2021 and a nearly 20% jump from 2019.
What’s even more eye-opening is that this trend is expected to continue.
What happened to private physician practices during the pandemic?
Since the pandemic, approximately 83,000 independent physicians have become employees of hospitals or other corporate entities.
First, the pandemic brought with it several economic problems for private practice physicians:
- Loss of patient volume
- Revenue loss
- Increased medical supply expenses
These problems made it easy for larger entities like hospitals and corporations to buy out private practices. It also led to more physicians voluntarily leaving their private practices in favor of more stable business models and the ability to withstand disruptive market trends like a pandemic.
Second, older doctors more likely to work in small, privately-owned medical practices are not being replaced by younger doctors once they retire. Instead, many recent medical school graduates and younger doctors with significant debt choose employment that offers more financial stability and work-life balance.
According to a May 2021 report by the AMA, 58% of doctors ages 55 and older were currently self-employed compared to 48.8% of doctors ages 40-54 and just 30% of physicians under the age of 40.
What does this mean for marketing?
As private practice physicians become a rarity, hospitals and other corporate entities have a unique challenge.
They need to either incorporate newly acquired physicians into their pre-existing marketing goals and objectives, overhaul their entire marketing strategy, or help newly acquired physicians retain autonomy under their corporate umbrella.
Marketing in each of these situations is nuanced and requires thoughtful consideration.
6 Marketing Tips for Hospitals & Corporate Entities with New Physicians
Whether you’re a hospital, health system, or another type of corporate entity (e.g., insurers and private equity firms) that recently acquired new physicians, consider several things to ensure your marketing strategy drives business growth in every service line.
Key factors include:
1. Identify your business model
After you’ve decided how to incorporate your newly acquired physicians, you’ll want to conduct a thorough SWOT (strengths, weaknesses, opportunities, and threats) analysis. This analysis can help you develop a new marketing strategy and long-term plans to achieve your goals.
A SWOT analysis is a comprehensive assessment of everything that could affect your company’s viability, allowing you to create a sound marketing plan and carve a path forward that maximizes your strengths and minimizes your weaknesses.
This step is particularly crucial in an era where new competition enters the market every day.
2. Reconsider your brand strategy
Once you’ve completed a thorough SWOT analysis, it’s time to take a step back, review the current branding of each practice, and determine how to create a sense of synergy between them (including your own).
To successfully deploy your brand for a multilocation practice or health system, one of the most important questions is how do you want to present yourself to healthcare consumers? Do you want to keep your old branding, transition to a new brand, or create a hybrid? Understanding this first will help you navigate all of the other moving parts.
Once you’ve made this crucial decision, it’s time to develop or refine your brand positioning, messaging strategy, content marketing strategy, website, and more.
As you can imagine, that’s a lot of work. But it all starts with a solid brand strategy and a clear understanding of who you are and how you want to communicate your brand to today’s consumers. When done right, you’ll come out of those branding workshops with brand guidelines for your visual identity and your messaging.
3. Strengthen your marketing plan
With new insights that consider your newly acquired practices, you can then revisit your marketing plan from a fresh perspective. While many pieces of your marketing plan may still be applicable, it’s essential to evaluate the viability of each newly acquired product and service as they relate to your overall business objectives.
One of the best ways to do this is through competitive analysis. A competitive analysis should be at the forefront of your branding and digital marketing strategy when launching a new brand, refreshing an existing one, or merging two or more brands. It helps answer such questions as, “Who are your new competitors?” “What are their leading products and services?” “How do they align with your products and services?”, “Which marketing tactics are they doing well?” and “Which could they do better?”
As you conduct competitive research, it’s important to remember that each medical specialty has its competitive landscape.
For example, let’s say you acquired an ENT practice. If you want to compete, you must consider all of your competitors (not just hospitals or other practices). This will include some of the best consumer-direct products and services (e.g., rhinoplasty, hearing aids, facial plastic surgery, balloon sinuplasty, etc.). Creating a strategy for each medical specialty or service line is essential.
4. Identify your new market share
Keeping current and potential market share top of mind is vital as you continue to grow. Market share is a key indicator of how competitive you are in a particular space (e.g., your percent of total sales in an industry). Acquisitions naturally increase your market share, which in turn should improve profitability.
Understanding your competitive landscape and current and potential market share helps you identify, develop, and launch scalable marketing opportunities that attract a larger audience.
5. Launch an integrated marketing plan
When you understand your company’s business model, brand strategy, strengths, opportunities, weaknesses, threats, competitive landscape, and market share potential, you can more easily identify your unique selling propositions (USPs).
These insights allow you to develop and launch an integrated marketing plan that blends just the right amount of digital and traditional marketing and advertising strategies to create long-term returns and position you as a leader in your field.
Integrated marketing plays a crucial role in delivering a unified, holistic message across every sales channel. This consistency helps build trust and eliminate confusion wherever customers choose to interact with your brand.
6. Fine-tune your digital marketing strategy
Since the pandemic began, we’ve seen a substantial shift toward digital marketing and SEO (search engine optimization). These channels are not only more cost-effective than radio, TV, and print, but they’re also proving to be an effective response to the constantly evolving business environment while providing unmatched flexibility and data in their marketing campaigns.
Large corporations and websites require enterprise services, especially when it comes to digital marketing. Make sure your in-house team or agency is experienced in enterprise-level SEO, PPC, Social Media, and Content Marketing.
3 Marketing Tips for Private Practice Physicians Who Want to Stay Independent
If you’re a private physician and decide to stay independent, your first priority (as always) is to prioritize patient experience and deliver high-quality medical care.
But, you also have to add value to stay competitive.
Here are three ways to stay on top:
1. Prioritize convenience
Analyze what your biggest competitors are doing and find a way to do them better.
Do competitors offer online appointment scheduling? Offer online appointment scheduling, live chat or secure communications with your physicians. Are competitors running online ads targeting your audience? Work with digital advertising experts who can create, monitor, and optimize paid search ads.
2. Modernize experiences
Create modern, frictionless access to services—similar to what consumers have come to expect in other service sectors. Today’s healthcare consumers expect more than just high-quality healthcare.
Healthcare competition is huge, and with the acceleration of private practice acquisitions, it’s only getting more daunting. Healthcare is more integrated than ever before with the widespread adoption of corporate players like CVS, telehealth, and electronic access to health records.
3. Maximize marketing
There’s no denying that it’s getting increasingly difficult for independent physicians to compete with hospitals or larger, consolidated medical practices.
Here are a few aspects of marketing you’ll need to prioritize:
With so many physicians opting for employment over independent practices, it will be essential for hospitals and corporate entities that acquire them to examine their marketing plan and develop a comprehensive strategy that caters to physicians, service lines, and business growth.