There was a time when the healthcare sector resisted marketing maybe because the focus used to be more on the provision of the services rather than the profitability of the organization. Times have changed significantly since then because the emergence of the private sector within the healthcare industry has driven up competition as well as the focus on profitability. In addition, many public sector healthcare organizations have observed that public funding has been declining over time. These factors have forced both public and private sector healthcare organizations to be run in more business-like manner, with a major focus on efficient management of limited resources and profitability. While this emphasis on cost minimization has improved the survival rates of healthcare organizations by reducing waste of resources, it might also have led to decline in the overall quality of healthcare. Similarly, the government healthcare systems also reimburse hospitals equally, irrespective of the differences in costs of providing particular healthcare services. The above-mentioned factors, thus, discourage the introduction of any practice that may add to the cost of providing healthcare services including amenities. As Michael Porter points out, too much focus on cost efficiencies has resulted in healthcare organizations ignoring as to what may be important to their customers. Studies show that amenities are important to the healthcare customers, thus, amenities are a valuable part of the overall healthcare experience.
If we look at other industries, it is apparent that value is not defined by businesses but is instead the outcome of consumers’ perceptions. The customer may consider a Ferrari sports car a better value than a Mercedes luxury sedan at even double the price even if Mercedes sedan is more comfortable and reliable. This may be due to the general perception that Ferrari’s products offer unrivaled driving pleasure. In addition, value is not only determined by the ability of a product or service to meet a need or solve a problem but also other aspects of overall user experience such as customer service. A cup of coffee at McDonald’s may be comparable in taste to a cup of coffee at Starbucks yet some customers consider Starbucks a better value at even higher prices because they also care about friendly customer service and inviting café environment. Since research shows that customers sometimes choose healthcare facilities on the basis of amenities even if the actual clinical record may be inferior to other facilities, it is apparent that customers care about amenities because it seems to improve their overall healthcare experience.
A significant proportion of healthcare customers may be going through some of the most difficult phases in their lives and this is especially true for those who may be facing one of the terminal health conditions with very low survival rates. Due to different experiences in our lives, most of us are aware of the importance of being in the right state of mind and this is also true of healthcare customers. Amenities help put healthcare customers in a pleasant mood and make their hospital stay more comfortable. This added comfort may help the patients reduce their stress levels and may even result in better-than-expected outcomes of the medical treatments.
Amenities may also help improve overall healthcare experience in other manners. Better amenities may serve as powerful marketing tools for the healthcare organizations, resulting in higher patient volume. The higher patient volume may help the healthcare facilities reduce costs through efficiencies of scale and some of the cost savings could be reinvested in the organization to improve healthcare technology as well as customer experience.
Michael Porter argues that high value for patients rather than cost minimization should become the objective of every healthcare organization. Healthcare treatments are not simple but complex products and each treatment involves a number of actors. Thus, the overall value is determined by the ability of different actors to work efficiently with each other and each process in the overall treatment plan has a material effect on the final outcome. Including amenities in the overall treatment plan will not only positively impact the patients’ progress by putting them in a relaxed environment but may even save in treatment costs through speedier recovery. One of the ways to reduce costs and improve value at the same time is to spend more on some services to reduce the need for others, according to Michael Porter. It is possible that the addition of amenities may enable the healthcare organizations to reduce the need of other services such as psychological counseling of nervous patients.
The world has been changing rapidly due to forces of globalization and marketers including those in the healthcare industry cannot afford to ignore the emerging trends to protect or even improve their competitiveness. First of all, the competition has increased due to lower barriers to entry including restrictions on foreign direct investments which means customers have more choices now. Second, the average income levels have been increasing and thus, customers have higher expectations and many are even willing to pay higher for improved experiences. These emerging trends have even forced companies to view themselves in new ways. Car companies don’t view themselves as selling cars but instead transportation solutions and telecommunication companies do not view themselves as the seller of cell phones but communication solutions. Similarly, healthcare organizations will also come to be seen as, if they are not already, as the provider of health and wellness solutions instead of treatment facilities.
The time is near when every customer will judge the healthcare organization not only on the outcome of the treatment but the entire experience including hospital stay, customer service, and amenities. It is reasonable to assume that amenities will become an essential part of overall healthcare experience because we already know from research studies that customers have started choosing treatment facilities on the basis of amenities, even at the expense of inferior clinical treatment. As more and more healthcare organizations realize that amenities drive up the demand level, they will also add amenities to increase their appeal and gradually amenities will become a standard industry practice.
Anyone who follows news must be aware of the fact that there has been exponential growth in the number of businesses that help customers deal with stress such as massage parlors, spas, therapy services, and even eastern meditation practices such as Yoga. These trends are a realization of the fact that mental wellbeing has serious benefits and stress carries high costs. Healthcare organizations help customers deal with some of the most difficult phases of their lives and it is logical to include amenities in the overall healthcare experience so that the customers stay in a positive state of mind and feel at home.
Michael Porter’s Outcome Measures Hierarchy has three tiers that together determine the value and amenities may play a significant role in the second tier which is concerned with the process of recovery after initial treatment. Amenities may not only help improve the performance of healthcare organizations in the second tier but will even enable customers to return to normal routine quicker.
It is clear that amenities are a valuable part of the overall healthcare experience because they help patients reduce their stress level and feel comfortable. Medical treatments benefit from a positive state of mind, thus, amenities can play a huge role in improving the final outcome. Amenities do not only benefit patients but may also help healthcare organizations improve their competitiveness. Amenities may improve patient volume and lower operating costs through economies of scale.