Local hospital competition part of national trend, health experts say it will benefit patients
by Patrick McCreless
Nov 05, 2013 | 3693 views |  0 comments | 69 69 recommendations | email to a friend | print
RMC and Stringfellow billboards on Alabama 21 in Anniston.  Photo by Bill Wilson.
RMC and Stringfellow billboards on Alabama 21 in Anniston. Photo by Bill Wilson.
Drive north on Alabama 21 into downtown Anniston and they are hard to miss – billboards, one after another, touting Anniston's two hospitals.

Regional Medical Center and Stringfellow Memorial Hospital, located just a few blocks from each other, are pushing different marketing strategies that highlight their strengths. While the larger RMC wants residents to know of its wealth of services, smaller Stringfellow highlights quality patient care.

Some health care industry and marketing experts say competition has grown among hospitals across the country in recent years. Hospitals are trying to carve niches for themselves and attract more patients to offset rising costs and capitalize on federal health care reform. Meanwhile, the growing competition could mean better prices and quality of care for patients, experts say.

"Things are going to change and hospitals will feel more under pressure to prove their worth," said Stuart Guterman, vice president for Medicare and cost control for the Commonwealth Fund, a New York-based nonprofit health care policy analysis and advocacy organization.

Congress passed the 2010 Affordable Care Act in an attempt, among other things, to stifle rising health care costs and make medical treatment available to more Americans. Major components of the law take effect next year, including provisions which could help millions of Americans who previously could not afford to pay for health insurance. That could lead to an influx of patients, which could mean more revenue for hospitals, particularly those that provide charity care to uninsured patients, Guterman said.

Hospitals will want to compete for these new patients and some studies show competition among hospitals often benefits consumers, Guterman said.

"Competition is good in the sense that it keeps you on your toes ... and the literature shows that where there is less competition, hospitals tend to have higher prices," Guterman said. "A lot of it depends on the characteristics of a particular area and the terms of the competition – you hope they're competing on the basis of quality and service."

David McCormack, CEO of RMC, a 338-bed nonprofit facility, said his hospital's main marketing strategy is to advertise its many services, such as advanced cancer treatment and heart surgery.

"We consider it more education, what all we do and how we do it," McCormack said.

McCormack said that while Stringfellow is a competitor since it is located in Anniston, he sees UAB Hospital in Birmingham as RMC's main competition, due to the many services it provides.

Matthew Banks, chief nursing officer for Stringfellow, said his hospital's administrators do not see themselves as being in competition with RMC. Stringfellow is a for-profit hospital with 125 beds, owned by Florida-based Health Management Associates.

"We're competitive with ourselves ... we strive for perfection in essentially everything we do," Banks said.

Rosemary Blackmon, vice president of the Alabama Hospital Association, said more hospitals are advertising awards they've won in quality control and patient care as a way to stand out.

"That has become an area to get the word out," Blackmon said. "And it's a good thing to let the public know what hospitals are doing to improve care."

Lonnie Hirsch, co-founder of Healthcare Success Strategies, a California-based health care marketing firm, said marketing practices like those between RMC and Stringfellow are growing around the country.

"You're seeing increasing visibility of marketing and advertising and competitive practices," Hirsch said.

Hirsch added that RMC and Stringfellow's marketing strategies are not unusual.

"Each hospital has to play to their strengths and effectively differentiate themselves with the competition," Hirsch said. "Smaller hospitals need to find a different story, maybe about their quality of care or patient focus."

Hirsch noted, however, that while competition is increasing, so too is hospital consolidation, meaning large hospitals are choosing to purchase smaller ones and outlying primary care clinics.

"That drives more patients to their services," Hirsch said.

However, according to a 2012 report from the Robert Wood Johnson Foundation, a New Jersey-based philanthropic organization that focuses on improving health care in the United States, consolidation tends to result in higher prices for treatment. When hospitals merge in already concentrated markets, the price increase can be dramatic, often exceeding 20 percent, the report shows.

"A lot of hospitals are buying up physician practices to improve their market situation," Guterman said. "The worry is that better consolidation markets could mean greater prices for care."

RMC has engaged in consolidation in recent years, purchasing several rural health clinics along with the former Jacksonville Medical Center hospital in December 2012.

"We expect competition to increase and that's one of the reasons we've expanded into more markets," McCormack said. "Eventually there won't be enough patients just in Anniston ... we need to branch out."

Hirsch said competition will continue to grow in the coming years as health care reform rolls out. However, consolidation will continue too, he said.

"That doesn't mean there will be one game in town, but there will be one hospital with the resources and money to really go after patients," Hirsch said. "It just affects how hospitals compete."

Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.

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