Health Care Anew

Who are the Hospital’s Customers? 

Savvy hospital administrators have regularly maintained the public position that the institutions they managed were devoted to serving the needs of their patients. 

But the successful ones knew that their real customers were the doctors who brought the patients. 

That situation arose from the phenomenon and role of private medical practice.  Hospitals as institutions do not have the ability on their own to admit patients.  Only doctors can do that.  So for the typical community hospital, the number of patients it serves has been totally dependent on the number of doctors who make up its medical staff and the size of their practices. 

Recently, hospitals have become more and more brazen in their attempts to recruit private practice physicians to their staffs.  In the Boston area, the upstart and aggressive for-profit Steward hospital organization made recent news by enticing the 150-doctor Whittier Independent Practice Association away from the Beth Israel Deaconess Medical Center (Boston Globe, November 10).   Also, the Money section of the December 14 edition of USA Today had a story about hospitals that had hired sales representatives to woo doctors away from other hospitals.  It seems safe to assume that these hospitals see doctors as their customers. 

That is changing to some extent as patients increasingly select their doctors on the basis of their hospital affiliation.  The emergence of so-called Accountable Care Organizations has the potential of changing it further.  As hospitals and physicians consolidate into single, unified organizations, physicians will take on the role of staff members rather than of independent practitioners.  “Wooing” doctors as a means of getting their patients will become a thing of the past.  The responsibility for attracting patients will become more a corporate one rather than one of independent doctors or physician groups. 

An indication of this change is the growth of hospital advertising, which is directed towards patients, not towards doctors. 

During the heyday of managed care in the 1990’s, insurance companies controlled where their subscribers got care and thus became “customers” of the hospitals.  But people didn’t like that and the practice largely disappeared. 

It may return in some form, but in the meantime hospitals may come to really see patients as their customers, as they have been claiming all the time.