Hospitals' marketing challenge: influencing physician behavior

Physicians' referring and admitting behavior as well as their clinical management practices are major determinants of hospitals' profitability under prospective payment. Four techniques are available to hospitals that seek to increase market share: Recruitment and retention strategies. In planning the mix of specialties represented on staff, hospitals should consider the effects of a physician's practice on the hospital's case mix. Peer pressure. Peer review programs in hospitals as well as through medical or specialty societies may help persuade physicians to alter their use of services. Education and information programs. Hospitals can assist physicians in patient management by conducting economic grand rounds, developing committees to study and communicate cost data to physicians, and providing information on alternatives to hospitalization. Incentives. Putting physicians at risk by linking planned expenditures to hospital financial performance can influence practice patterns. Other techniques include offering limited partnerships to medical staff members and merging the hospital and medical staff into one corporation. Hospitals may also need to influence physicians away from ventures that compete directly with the institution, such as ambulatory surgery centers.