MH0047 – Public Relations and Marketing of Healthcare Organization

Q.1. Health care management an emerging discipline.

Sol-

Health care or healthcare is the treatment and prevention of illness. Health care is
delivered by professionals in medicine, dentistry, nursing, pharmacy and allied health.

The social and political issues surrounding access to healthcare in the US have led to
vigorous public debate and the almost colloquial use of terms such as health care
(medical management of illness), health insurance (reimbursement of health care costs),
and public health (the collective state and range of health in a population).

The delivery of modern health care depends on an expanding group of

trained professionals coming together as an interdisciplinary team.

The health-care industry incorporates several sectors that are dedicated to providing
health care services and products. According to industry and market classifications, such
as the Global Industry Classification Standard and the Industry Classification
Benchmark, the health-care industry includes health care equipment and services as well
as pharmaceuticals, biotechnology and life sciences. The particular sectors associated
with these groups are: biotechnology, diagnostic substances, drug delivery, drug
manufacturers, hospitals, medical equipment and instruments, diagnostic laboratories,
nursing homes, providers of health care plans and home health care.[3]

According to government industry classifications, which are mostly based on the United
Nations system, the International Standard Industrial Classification, health care
generally consists of hospital activities, medical and dental practice activities, and other
human health activities. The last class consists of all activities for human health not
performed by hospitals, physicians or dentists. This involves activities of, or under the
supervision of, nurses, midwives, physiotherapists, scientific or diagnostic laboratories,
pathology clinics, home, or other Para-medical practitioners in the field of optometry,
hydrotherapy, medical massage, music therapy, occupational therapy, speech therapy,
chiropody, homeopathy, chiropractics, acupuncture, etc.

Biomedical research (or experimental medicine), in general simply known as medical

research, is the basic research, applied research, or translational research conducted to
aid the body of knowledge in the field of medicine. Medical research can be divided into
two general categories: the evaluation of new treatments for both safety and efficacy in
what are termed clinical trials, and all other research that contributes to the development
of new treatments. The latter is termed preclinical research if its goal is specifically to
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elaborate knowledge for the development of new therapeutic strategies. A new paradigm
to biomedical research is being termed translational research, which focuses on iterative
feedback loops between the basic and clinical research domains to accelerate knowledge
translation from the bedside to the bench, and back again.

In terms of pharmaceutical R&D spending, Europe spends a little less that the United
States (€22.50bn compared to €27.05bn in 2006) and there is less growth in European
R&D spending. Pharmaceuticals and other medical devices are the leading high
technology exports of Europe and the United States. However, the United States
dominates the biopharmaceutical field, accounting for the three quarters of the world’s
biotechnology revenues and 80% of world R&D spending in biotechnology

The World Health Organization (WHO) is a specialized United Nations agency which
acts as a coordinator and researcher for public health around the world. Established on 7
April 1948, and headquartered in Geneva, Switzerland, the agency inherited the mandate
and resources of its predecessor, the Health Organization, which had been an agency of
the League of Nations. The WHO's constitution states that its mission "is the attainment
by all peoples of the highest possible level of health." Its major task is to combat
disease, especially key infectious diseases, and to promote the general health of the
peoples of the world. Examples of its work include years of fighting smallpox. In 1979
the WHO declared that the disease had been eradicated - the first disease in history to be
completely eliminated by deliberate human design. The WHO is nearing success in
developing vaccines against malaria and schistosomiasis and aims to
eradicate polio within the next few years. The organization has already endorsed the
world's first official HIV/AIDS Toolkit for Zimbabwe from October 3, 2006, making it
an international standard

The WHO is financed by contributions from member states and from donors. In recent
years the WHO's work has involved more collaboration, currently around 80 such
partnerships, with NGOs and the pharmaceutical industry, as well as with foundations
such as the Bill and Melinda Gates Foundation and the Rockefeller Foundation.
Voluntary contributions to the WHO from national and local governments, foundations
and NGOs, other UN organizations, and the private sector (including pharmaceutical
companies), now exceed that of assessed contributions (dues) from its 193 member
nations

Health economics is a branch of economics concerned with issues related to scarcity in

the allocation of health and health care. Broadly, health economists study the

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functioning of the health care system and the private and social causes of health-
affecting behaviours such as smoking.

A seminal 1963 article by Kenneth Arrow, often credited with giving rise to the health
economics as a discipline, drew conceptual distinctions between health and other goals.
Factors that distinguish health economics from other areas include
extensive government intervention, intractable uncertainty in several
dimensions, asymmetric information, and externalities Governments tend to regulate the
health care industry heavily and also tend to be the largest payer within the market.
Uncertainty is intrinsic to health, both in patient outcomes and financial concerns. The
knowledge gap that exists between a physician and a patient can prevent the patient
from accurately describing his symptoms or enable the physician to prescribe
unnecessary but profitable services; these imbalances lead to market failures resulting
from asymmetric information. Externalities arise frequently when considering health
and health care, notably in the context of infectious disease. For example, making an
effort to avoid catching a cold, or practicing safer sex, affects people other than the
decision maker.

The scope of health economics is neatly encapsulated by Alan William's "plumbing

diagram” dividing the discipline into eight distinct topics:

 What influences health? (other than health care)

 What is health and what is its value
 The demand for health care
 The supply of health care
 Micro-economic evaluation at treatment level
 Market equilibrium
 Evaluation at whole system level; and,
 Planning, budgeting and monitoring mechanisms.

Consuming just fewer than 10 percent of gross domestic product of most developed
nations, health care can form an enormous part of a country's economy. In 2008, health
care consumed an average of 9.0 percent of GDP across the OECD countries with the
United States (16.0%), France (11.2%), and Switzerland (10.7%) being the top three
spenders.

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The United States and Canada account for 48% of world pharmaceutical sales, while
Europe, Japan, and all other nations account for 30%, 9%, and 13%, respectively United
States accounts for the three quarters of the world’s biotechnology revenues.

Social health insurance is where a nation's entire population is eligible for health care
coverage and this coverage and the services provided are regulated. In almost every
country, state or municipality with a government health care system a parallel private,
and usually for-profit, system is allowed to operate. This is sometimes referred to
as two-tier health care. The scale, extent, and funding of these private systems is
variable.

A traditional view is that improvements in health result from advancements in medical

science. The medical model of health focuses on the eradication
of illness through diagnosis and effective treatment. In contrast, the social model of
health places emphasis on changes that can be made in society and in people's own
lifestyles to make the population healthier. It defines illness from the point of view of
the individual's functioning within their society rather than by monitoring for changes
in biological or physiological signs

The United States currently operates under a mixed market health care system.
Government sources (federal, state, and local) account for 45% of U.S. health care
expenditures. Private sources account for the remainder of costs, with 38% of people
receiving health coverage through their employers and 17% arising from other private
payment such as private insurance and out-of-pocket co-pays. Opponents of government
intervention into the market generally believe that such intervention distorts pricing as
government agents would be operating outside of the corporate model and the principles
of market discipline; they have less short and medium-term incentives than private
agents to make purchases that can generate revenues and avoid bankruptcy. Health
system reform in the United States usually focuses around three suggested systems, with
proposals currently underway to integrate these systems in various ways to provide a
number of health care options. First is single-payer, a term meant to describe a single
agency managing a single system, as found in most modernized countries as well as
some states and municipalities within the United States. Second are employers or
individual insurance mandates, with which the state of Massachusetts has experimented.
Finally, there is consumer-driven health, in which systems, consumers, and patients
have more control of how they access care. This is argued to provide a greater incentive
to find cost-saving health care approaches. A critic of consumer-driven health say that it
would benefit the healthy but be insufficient for the chronically sick, much as the

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current system operates. Over the past thirty years, most of the nation's health care has
moved from the second model operating with not-for-profit institutions to the third
model operating with for-profit institutions; the greater problems with this approach
have been the gradual deregulation of HMOs resulting in fewer of the promised choices
for consumers, and the steady increase in consumer costs that have marginalized
consumers and burdened states with excessive urgent health care costs that are avoided
when consumers actually have adequate access to preventive health care.

A few states have taken serious steps toward universal health care coverage, most
notably Minnesota, Massachusetts and Connecticut, with recent examples being
the Massachusetts 2006 Health Reform Statute and Connecticut's Susti Net plan to
provide quality, affordable health care to state residents .
Q.2. Explain Porter’s 5 forces analysis
Sol-

Porter's five forces is a framework for the industry analysis and business strategy
development developed by Michael E. Porter of Harvard in 1979. It draws
upon Industrial Organization (IO) economics to derive five forces that determine the
competitive intensity and therefore attractiveness of a market. Attractiveness in this
context refers to the overall industry profitability. An "unattractive" industry is one in
which the combination of these five forces acts to drive down overall profitability. A
very unattractive industry would be one approaching "pure competition", in which
available profits for all firms are driven down to zero.

Three of Porter's five forces refer to competition from external sources. The remainder
are internal threats. It is useful to use Porter's five forces in conjunction with SWOT
analysis (Strengths, Weaknesses, Opportunities, and Threats).

Porter referred to these forces as the micro environment, to contrast it with the more
general

term macro environment. They consist of those forces close to a company that affect its
ability to serve its customers and make a profit. A change in any of the forces normally,
requires a business unit to re-assess the marketplace given the overall change in industry
information. The overall industry attractiveness does not imply that every firm in the
industry will return the same profitability. Firms are able to apply their core
competencies, business model or network to achieve a profit above the industry average.
A clear example of this is the airline industry. As an industry, profitability is low and yet

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individual companies, by applying unique business models, have been able to make a
return in excess of the industry average.

Porter's five forces include - three forces from 'horizontal' competition: threat of
substitute products, the threat of established rivals, and the threat of new entrants; and
two forces from 'vertical' competition: the bargaining power of suppliers and the
bargaining power of customers.

This five forces analysis is just one part of the complete Porter strategic models. The
other elements are the value chain and the generic strategies.

The threat of the entry of new competitors

Profitable markets that yield high returns will attract new firms. This results in many
new entrants, which eventually will decrease profitability for all firms in the industry.
Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate
will fall towards zero (perfect competition).

 The existence of barriers to entry (patents [1], rights, etc.) The most attractive
segment is one in which entry barriers are high and exit barriers are low. Few new
firms can enter and non-performing firms can exit easily.
 Economies of product differences
 Brand equity
 Switching costs or sunk costs
 Capital requirements
 Access to distribution
 Customer loyalty to established brands
 Absolute cost advantages
 Learning curve advantages
 Expected retaliation by incumbents
 Government policies
 Industry profitability; the more profitable the industry the more attractive it will
be to new competitors

The intensity of competitive rivalry

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For most industries, the intensity of competitive rivalry is the major determinant of the
competitiveness of the industry.

 Sustainable competitive advantage through innovation

 Competition between online and offline companies; click-and-mortar -v- slags
on a bridge.
 Level of advertising expense
 Powerful competitive strategy
 The visibility of proprietary items on the Web used by a company which can
intensify competitive pressures on their rivals. How will competition react to certain
behaviour by another firm? Competitive rivalry is likely to be based on dimensions
such as price, quality, and innovation. Technological advances protect companies
from competition. This applies to products and services. Companies that are
successful with introducing new technology are able to charge higher prices and
achieve higher profits, until competitors imitate them. Examples of recent
technology advantage in have been mp3 players and mobile telephones. Vertical
integration is a strategy to reduce a business' own cost and thereby intensify pressure
on its rival.

The threat of substitute products or services

The existence of products outside of the realm of the common product boundaries
increases the propensity of customers to switch to alternatives:

 Buyer propensity to substitute

 Relative price performance of substitute
 Buyer switching costs
 Perceived level of product differentiation
 Number of substitute products available in the market
 Ease of substitution. Information-based products are more prone to substitution,
as online product can easily replace material product.
 Substandard product
 Quality depreciation

The bargaining power of customers (buyers)

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The bargaining power of customers is also described as the market of outputs: the ability
of customers to put the firm under pressure, which also affects the customer's sensitivity
to price changes.

 Buyer concentration to firm concentration ratio

 Degree of dependency upon existing channels of distribution
 Bargaining leverage, particularly in industries with high fixed costs
 Buyer volume
 Buyer switching costs relative to firm switching costs
 Buyer information availability
 Ability to backward integrate
 Availability of existing substitute products
 Buyer price sensitivity
 Differential advantage (uniqueness) of industry products
 RFM Analysis

The bargaining power of suppliers

The bargaining power of suppliers is also described as the market of inputs. Suppliers of
raw materials, components, labour, and services (such as expertise) to the firm can be a
source of power over the firm, when there are few substitutes. Suppliers may refuse to
work with the firm, or, e.g., charge excessively high prices for unique resources.

 Supplier switching costs relative to firm switching costs

 Degree of differentiation of inputs
 Impact of inputs on cost or differentiation
 Presence of substitute inputs
 Strength of distribution channel
 Supplier concentration to firm concentration ratio
 Employee solidarity (e.g. labour unions)
 Supplier competition - ability to forward vertically integrate and cut out the
buyer

Strategy consultants occasionally use Porter's five forces framework when making a
qualitative evaluation of a firm's strategic position. However, for most consultants, the
framework is only a starting point or "checklist" they might us. Like all general
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frameworks, an analysis that uses it to the exclusion of specifics about a particular

situation is considered naive.

According to Porter, the five forces model should be used at the line-of-business
industry level; it is not designed to be used at the industry group or industry sector level.
An industry is defined at a lower, more basic level: a market in which similar or closely
related products and/or services are sold to buyers. (See industry information.)
A firm that competes in a single industry should develop, at a minimum, one five forces
analysis for its industry. Porter makes clear that for diversified companies, the first
fundamental issue in corporate strategy is the selection of industries (lines of business)
in which the company should compete; and each line of business should develop its
own, industry-specific, five forces analysis. The average Global 1,000 Company
competes in approximately 52 industries (lines of business).

Whatever Porter described these are the strategic options but not strategy. Sylloge
Corporation, an Indian marketers group described it as a sequence of actions in coherent
with competition with time and options as standpoints.

Porter's framework has been challenged by other academics and strategists such as
Stewart Neill. Similarly, the likes of Kevin P. Coyne [3] and Somu Subramaniam have
stated that three dubious assumptions underlie the five forces:

 That the source of value is structural advantage (creating barriers to entry).

 That uncertainty is low, allowing participants in a market to plan for and respond
to competitive behaviour.

An important extension to Porter was found in the work of Adam Brandenburger

and Barry Nalebuff in the mid-1990s. Using game theory, they added the concept
of complementary (also called "the 6th force"), helping to explain the reasoning behind
strategic alliances. The idea that complementary are the sixth force has often been
credited to Andrew Grove, former CEO of Intel Corporation. According to most
references, the sixth force is government or the public. Martyn Richard Jones, whilst
consulting at Groupe Bull, developed an augmented 5 forces model in Scotland in 1993.
It is based on Porter's model and includes Government (national and regional) as well as
Pressure Groups as the notional 6th force. This model was the result of work carried out
as part of Groupe Bull's Knowledge Asset Management Organisation initiative.

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Porter indirectly rebutted the assertions of other forces, by referring to innovation,

government, and complementary products and services as "factors" that affect the five
forces.

It is also perhaps not feasible to evaluate the attractiveness of an industry independent of

the resources a firm brings to that industry. It is thus argued that this theory be coupled
with the Resource-Based View (RBV) in order for the firm to develop a much more
sound strategy.

Q.3. Compare and contrast Advertising and Public Relations?

Sol-

International humorist Stephen Leacock defined advertising as: "the science of arresting
the human intelligence long enough to get money from it." But the textbook definition
of advertising is: "a form of persuasion that informs people about the goods and services
they can purchase."

Advertising is very different from public relations. One key difference is that you
always pay for the space and time of an advertisement (or commercial, which is an
insert appearing on radio, television, or the Internet). By contrast, editorial coverage
generated through public relations is not paid for by the organization issuing the news
release. The media will pick up and publish the story because they consider it
newsworthy, not as a paid advertisement.

Another crucial difference is that, in advertising, you have virtually full control over the
message. Because you are paying for advertising, the ad or commercial runs your exact
text (called copy), provided the copy complies with generally acceptable standards for
advertising. In the case of public relations, the media outlet you are targeting is under no
obligation to run the story in any form. If a media outlet does decide to run the story, an
editor will generally rewrite the news release, or use pertinent information from the
news release to create the news. (For instance, your news release might be used as part
of a larger story on players in your industry or profession.) In addition, you have no
control over when the release or news will run. All decisions are made by the editor.

As you can see, public relations are a cost-effective way of getting your story out.
Taking the trouble to write effective news releases and to build a relationship with the
relevant media will, in time, pay dividends in the form of exposure and prestige. Best of
all, public relations probably costs less than a single advertisement.

Q.4. Write short notes on dimensions of issues

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Sol –

Many environmental or resource management issues can be both scientifically complex

and involve high degrees of risk or uncertainty. In some cases, the issue may be purely
scientific, such as deciding which species of riparian vegetation is best for a stream bank
restoration project. Many issues however, involve a mix of social, economic and
scientific concerns. A policy decision, like prioritizing actions for endangered species
habitat protection, also relies on an understanding of the scientific dimensions of the
issue.
Involving citizens, who may have insufficient scientific or technical expertise, in
deliberation or decision-making on these issues also raises a number of concerns.
Indeed, critics argue that collaborative partnerships may result in recommendations or
decisions that are not scientifically sound, and may signify devolution from
scientifically based management or protection strategies.
Part of our research explored the challenges faced by collaborative partnerships in
dealing with science. We asked members and outside observers to describe how the
group dealt with the scientific dimensions of the issues addressed by the partnership. In
inquiring about those challenges, we learned what strategies groups had employed to
confront challenges. Those interviewed were asked to reflect on those strategies and
offer suggestions for how they would have improved the partnership’s approach.
Finally, participants had the opportunity to offer advice on how to deal with issues in a
way that would result in credible and sound decisions.
Both the challenges groups encounter and the strategies they use vary according to many
other factors affecting the partnership. By analyzing the way partnerships dealt with
technical and scientific issues, we hope to provide insight on some common barriers and
approaches to creating a credible collaborative process that results in scientifically
sound solutions.
Issues

The partnerships chosen for case studies dealt with a wide range of scientific issues.
Some of those issues include: impacts of industrial processes, development, forestry,
and grazing on water quality, protection or restoration of fish and wildlife habitat,
riparian area management, maintenance of rangeland health, and elimination of noxious
weeds.

Q.5. A new multi - specialty hospital is going to set up in

Bangalore. What do you think are the marketing strategies
they can use to promote this new hospital?
Sol –

Hospital marketing is a specialized field that deals with connecting patients,

physicians, and hospitals in mutual relationships.

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Many people ask, "How can you 'market' a hospital?" But marketing a hospital or health
system is no different than "marketing" any other non-profit organization like the
American Red Cross or your local charity. There are audiences. There are needs. There
is a mission statement.
Plus, historically, medicine in America has always been a business. In today's insurance
and reimbursement environment, health care and hospital marketing is more needed than
ever to ensure continuing viability of American medicine on the local level and
to provide the high quality of individual health care that Americans have come to
demand.
With these ingredients, there is clearly a need for analysis, strategy and communication
to make the most of limited resources while providing compassionate health care. This
is what hospital marketing does.

The marketing of medication has a long history. The sale of miracle cures, many with
little real potency, has always been common. Marketing of legitimate non-
prescription medications, such as pain relievers or allergy medicine, has also long been
practiced, although, until recently, mass marketing of prescription medications has been
rare. It was long believed that since doctors made the selection of drugs, mass marketing
was a waste of resources; specific ads targeting the medical profession were thought to
be cheaper and just as effective. This would involve ads in professional journals and
visits by sales staff to doctor’s offices and hospitals. An important part of these efforts
was marketing to medical students

Marketing to health care providers takes four main forms: gifting, detailing, drug
samples, and sponsoring (CME) In Britain, Canada, New Zealand, and the United States
80-90% of physicians see pharmaceutical representatives. Of statements made by
pharmaceutical representatives 11% are false and of the false statements all are in favour
of the representatives drugs. While very few physicians consider themselves susceptible
to detailing, 84% of them believed that their colleagues are

The Partners Healthcare, Massachusetts' largest hospital and physician network, has
adopted new guidelines prohibiting physicians and researchers from accepting gifts from
pharmaceutical manufacturers. This will include meals or individual drug samples, and
drug samples left by companies will be distributed through a centralized system, while
educational programs and fellowships will be required to be centrally reviewed and
approved
Free samples

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Free samples have been shown to affect physician prescribing behaviour. Physicians
with access to free samples are more likely to prescribe brand name medication over
equivalent OTC medications. Other studies found that free samples decreased the
likelihood that physicians would follow standard of care practices.
Continuing medical education
Hours spent by physicians in industry-supported CME is greater than that from either
medical schools or professional societies

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