Now that the industry's once fast-paced merger trends have slowed down considerably, the real test is just beginning for marketing departments and their reorganization strategies. As of June, the number of healthcare merger transactions had dipped to 200, a 42% drop from the same time last year, according to Irving Levin Associates, a healthcare research and publishing firm in New Canaan, Conn.
Though the dust has settled on these transactions, communicators at recently merged organizations are still experiencing merger aftershock resulting from unresolved strategic issues and limited resources. Healthcare marketers are now challenged to strike the right local/regional marketing balance. Tough decisions on how to integrate the marketing departments at several facilities, fill high-level corporate marketing positions and deliver multi-level branding strategies are best made when important corporate culture questions have been thoroughly answered, says Ken McDonald, president of Management Science Associates, a consulting firm in New York.
Rushing to an aggressive corporate branding decision, for instance, may come back to haunt you, if the merged organizations aren't poised to implement it operationally. Centura Health in Denver recently learned this difficult lesson. When Centura Health was formed four years ago as the result of a merger between 10 regional hospital systems, it became the largest integrated health delivery system in the state. The branding campaign last year promoted Centura as a large healthcare system dedicated to "getting better." The marketing focus featured the Centura brand more prominently than the individual hospital names. (For more information on the campaign, refer to HPRMN's April 15 case study.)
This approach was not well received in rural areas where the local hospital name had considerable community value. In addition, the infrastructure to support a major corporate integration was not in place for Centura. So midway through its efforts to centralize the marketing functions earlier this year, it had to decentralize some of them, says Julia Armstrong, marketing manager for Penrose-St. Francis Health Services, a Centura Health division. Armstrong joined Centura last year initially as a marketing manager for a larger region that covered five hospitals. As a result of the decentralization, Armstrong had to reapply for her job and was demoted to her current position, though her salary has remained the same. Although she was initially hurt and mad, Armstrong believes the recent staffing changes have been necessary and make the most sense. "The [marketing] focus is back on local hospitals, which is the best approach because healthcare is so local."
Delayed Reaction
When Mount Sinai Hospital and NYU Hospital Center merged last year to form Mount Sinai NYU Health, marketing decisions were intentionally delayed to determine the new organization's corporate marcom needs, says Gary Rosenberg, a system SVP, who heads the communications function at the corporate level. Although the integration is not complete, the initial focus has been on developing a brand identity that will work for the system's two major hospitals, 50 affiliated hospitals and other facilities.
Now the challenge is in determining what areas of marketing should be integrated and what functions should remain independent. Because both Mount Sinai and NYU are academic organizations, it's important for them to have a local PR presence to support each school of medicine. Marketing, however, for the most part will be centralized, says Rosenberg. In making this transition, Rosenberg emphasizes the importance of encouraging ongoing feedback from marketing staffers at both hospitals, the CEOs and board members.
Inevitably, these transitions will result in deflated executive egos. Earlier this year, tensions ran high while Rosenberg searched for a VP of corporate marketing. One of the two internal candidates left before Rosenberg could decide. Ultimately, Rosenberg decided to hire an outside person for the job who had the right mix of marketing communications and government relations experience.
(Mount Sinai, Gary Rosenberg, 212/241-9100; Centura Health, Julia Armstrong, 719/776-5065, MSA Associates, Ken McDonald, 800/222-4774)