Implications of prospective payment under DRGs for hospital marketing

The authors analyze the hospital marketing implications of Medicare's prospective payment system under DRGs. They take an appropriately broad view of marketing and consider related impacts on culture, structure, and management, in addition to the traditional marketing mix. The article serves to present in one place the ideas and discussions on the subject from a wide and disparate literature. The aim throughout is to identify those marketing responses warranting recommendation. The recommendations are assembled in a concluding section. Though many of the ideas are not new, they have yet to be widely adopted by hospitals. Hence they represent untapped marketing opportunities attributable to the advent of the DRG system. The authors conclude with suggestions for future research.