How to market specialized care.
Some will. Some won't.
Survival of the Fittest
Admittedly, not much is mentioned about nursing home care in President Clinton's 1,342-page health care reform plan. Nonetheless, reform will have serious and far-reaching consequences on the way nursing homes operate and market their services. The new order of things will force the industry to reassess and re-evaluate its product (custodial care is "out," specialized care is "in," or soon will be), its marketing strategies (niche marketing is becoming essential) and its customers (not simply residents and families, but managed care executives choosing a facility on the basis of specialized capabilities for meeting the needs of "covered lives"). It's obvious: Long-term care facilities must quickly develop new skills and products to remain competitive.
Here are two survival tips: Nursing homes must develop a specialty product. And they must sharpen their ability to sell it.
How to Develop a Specialty Product
When I was writing my book Marketing Success, I was appalled at how many key nursing home personnel really did not understand their product. This product confusion dates back to the early "Medicare" days. From 1967 to 1972, many nursing homes thought they were selling something called "extended care" because that's the kind of care Medicare reimbursed. In 1972, Congress abolished extended care and created two more labels-"skilled" and "intermediate." Skilled and intermediate care were simply government designations for meeting specific reimbursement and staffing requirements.
In September 1989, I did a marketing consultation for a small chain of nursing homes in Florida. I had 40 of the top managers from different facilities participate in a written quiz, and asked this simple question: "What's your primary product? What are you marketing? What are you selling?" Here's how the top managers in 3 different facilities answered:
Facility # 1 Facility #2 Facility #3 Good care Good care Medical services Service Care 24-Hour care Quality of life Skilled care Loving health care Top-notch care Quality care Professional health care Safe Care A home Care for elderly
"Homey" atmosphere Best possible care Clean "hemey" place
Despite the fact that all 3 facilities were licensed as "skilled" and Medicare-certified, only 1 out of 19 responses even identified "skilled care" as a possible product. This will no longer fly. Nursing homes must not only understand their primary product, but move quickly to create and market a specialty product, too.
Primary Product: The primary product can be defined as generalized convalescent and recuperative care, with medical and nursing supervision on a long- or short-term basis accompanied by necessary support services.
Specialty Product: A specialty product is a specialized medical, nursing, of therapeutic regimen delivered by a competent and well-trained staff to patients with a particular diagnosis that is resolvable.
Specialized care of this type might represent no more than 20 or 30% of the facility's total annual admissions for a year. Otherwise, the facility would no longer be a nursing home, but a specialized treatment center.
Specialized care revolves not so much around the place of the care (the certified section) or the reimbursement for the care (Medicare, Part A), but rather on the competence of the personnel, availability of special equipment and the advanced treatment protocols. Nor does specialized care have to be limited only to the Medicare-certified section. Real Alzheimer's care - not not just custodial supervision - is a specialty product. Unfortunately, some nursing homes think they are already providing specialized Alzheimer's care because they have a locked unit and provide the patients with alarm bracelets. Specialized care involves more than that.
While Medicare-certified nursing homes provide physical therapy, few provide specialized rehab - that is, intensive therapy, with twice-a-day sessions, 7-days-a-week, in a well-equipped equipped therapy department staffed by not only registered physical therapists, but trained therapy assistants as well. Nursing homes that develop specialized rehabilitation capabilities could and should open up an outpatient physical therapy department. This would enable the facility to attract more customers from private insurance, managed care, and the like.
Unfortunately, some nursing homes think they are "specializing in rehab" because they are "certified" for Medicare and have a few patients under active therapy. Space is scarce, equipment is sparse, and the therapists spends only a few hours each morning in the facility. That's not a specialized rehab program!
Many hospitalized patients develop serious skin problems, necessitating specialized wound care and treatment. Medicare does not pay for all of these individuals to be treated in a nursing home because some are under age 65. Managed care executives, however, might be very interested in nursing homes as alternative placement sites for this type of care.
Nursing homes must develop their specialty products while they still have time to sharpen their program focus and train staff in the advanced protocols. To accomplish this, administrators must ask themselves three questions: What are we good at? Who needs it" Who will pay us a premium price for our specialty?
Sharpen Selling Skills
However, long-term care facilities must do more than create a specialty product to eventually prosper under managed care. They must learn to sell it effectively, as well. In the vast majority of nursing homes around the country, admission coordinators function as the sales force. Unfortunately, many have received little, if any, formal sales training. To begin to remedy this, one must analyze the process of selling in this market. Before we understand the process of selling, however, we must first define it. Selling is educating and motivating a qualified customer to purchase a product at the desired price. The process, therefore, has four steps: educating, motivating, qualifying and closing.
Professional sales people educate and motivate customers by means of a script or other presentation. Many nursing home admission coordinators do not have a practiced, polished script, but instead "wing it."
Professional sales people always qualify before they sell. Many nursing home admission coordinators do the exact opposite. They start selling just as soon as the family sits down. Only near the end of the tour do they make an attempt to qualify the customer as one who is appropriate and desireable. Once they realize this admission would be inappropriate or unwanted, they don't know what to do. They can't un-sell the facility! Most of the time, they try to claim "there are no empty beds," even though the family saw the empty rooms while on the tour.
Professional sales people always go for a closing. Many nursing home admission coordinators fail to ask the closing questions at all and, instead, profusely thank families for coming in. They offer their business card with a flourish and wish them a nice day! That's not a closing, that's a farewell.
Closing is a process in which the salesperson tries to elicit a "yes" answer to carefully formulated closing questions. "Getting the check" is not the closing, it is the result of getting "yes" answers to the closing questions. Unfortunately, many nursing home admission coordinators don't even know what the questions are, much less when and how to ask them.
What is a Script?
All professional sales people work diligently and continuously on their scripts They polish and practice them until they are letter-perfect. Tom Hopkins, nationally known sales trainer and author of the book How to Master the Art of Selling, describes the importance of a script: A script or sales presentation is says Hopkins, "a carefully planned. well-organized sequence of words and sentences which accurately and enthusiastically describe the strengths, benefits and advantages of a product to a qualified customer."
Salespeople ordinarily address customers and make their presentations verbally. But, before they ever open their mouths. they have carefully, figured out exactly what they want to say. Remember, selling is educating a customer. Nobody, buys unless they know what a product is and does. You educate by your script. However, selling is also motivating a customer. It is one thing to convince a customer that you have a needed and necessary product, but you must also persuade the customer to purchase it. A closing cannot and will not take place until and unless the customer has been both convinced (educated) and persuaded (motivated). The more powerful and persuasive the presentation, the easier the closing!
Scripts become more powerful and effective when positioning techniques are used. Positioning not only forms the foundation for niche marketing, but also for better selling as well. In 1981 A1 Reis and Jack Trout wrote a book called Positioning. It revolutionized the way marketing and selling was done. Here is an excerpt from that book:
"Positioning techniques always start with the product. It is not something you do to the product, but rather something you do to the mind of a customer who needs or wants that product. You position your product in the mind of the customer as being superior to or better than a competitor's product. The basic approach of positioning is to rearrange the connections between your product and how the, customer sees it. You position your product most effectively by always selling your strengths, benefits and advantages. Point out what is unique, special and different about it. Don't waste time telling the customer how and where your product is the same as a competitor's. Instead, point out what is unique, special and different about it. Sell the difference. not the sameness!"
Many nursing home admission salespeople do the exact opposite. They sell the sameness. They point out, ad nauseam, how their facility has the same features. benefits and services as other competing facilities. After awhile, everything is a blur. Would-be customers end up thinking that all nursing homes are the same. They are not the same! Some are better than others. Some have more to offer in ambiance, amenities and - today - specialized care.
If nursing homes don't sharpen their selling skills. how can they both convince and persuade managed care executives to utilize their facility for placement for specialized care? If the admission coordinator has a script like this, it's over!
Insurance Executive: Tell me about your facility and its services. What do you have to offer?
Admission Coordinator: Well, sir, we are fully licensed...
Insurance Executive: That's nice. What else?
Admission Coordinator: We have 3 meals a day....
Insurance Executive: 3 meals a day...that's interesting.
Admission Coordinator: We have a barber and a beauty shop and a popcorn machine...
Insurance Executive: A popcorn machine!
Admission Coordinator: We also have a Pet Therapy Program. Our facility recently got a new puppy from the pound. Our residents just love it. We had a contest and the residents voted on a name.
Insurance Executive: That's nice. Look, I have, another appointment. I'm trying to see as many nursing homes as I can to determine which facilities we can use as alternative placement sites. Is there anything else You would like to tell me?
Admission Coordinator: Did I mention we have 3 meals a day?
Insurance Executive: Why yes, you did...
Admission Coordinator: And we have snacks in between meals?
Insurance Executive: I'll make a note of that. Thank you very much.
So, What Do You Sell?
While it is not possible to go into great detail in this space, here are some hints of the different flavor of this marketing - the marketing you will want to do for the 1990s and beyond.
For example, now you are "niche marketing." Much depends on the needs of your local managed care marketplace. You could be providing sub-acute treatment for, say, ventilatory support or rehabilitation. It could be day care, Alzheimer's special care, or hospice.
Aside from wanting to know the obvious characteristics of your service - its quality, the qualifications of the staff to provide it - managed care may be interested in other facets: for example, do you offer specialized billing procedures for the service? To what extent is case management involved in making sure patients receive appropriate care? What sort of reports and updates will be available? What makes your service better than the one down the street?
Through it all runs the understanding that the primary customer you are serving is the managed care account (assuming, of course, that you share similar goals regarding patient outcome, otherwise you probably shouldn't be negotiating with this company).
A hint on closing in this type of marketing: Because this is a new field for many nursing homes, you may do well to go for a trial period - say, two or three months - during which managed care pays you a negotiated amount and evaluates your results. The fixed contract can be negotiated after everyone is reasonably comfortable with the arrangement. In short, closing - at least at the outset - may take some time.
Be patient, though. The winds of change are howling, but some long-term care facilities still don't hear them. If you specialize, you will survive; if you sharpen your selling skills, you will prosper.