Across the country new payment models being tested by CMS like MACRA and the Comprehensive Joint Replacement Program (CJR) are driving healthcare delivery organizations to focus on the value they deliver to payers and patients.  Historically, healthcare delivery organizations defined value in narrow terms and focused on complication and mortality rates.  In addition, processes were designed to meet the needs of the physician, not the patient or customer.  Efforts to increase volume focused on providing amenities like car valets and private rooms rather than outcomes.

However, recent policy changes and a greater focus on economics are encouraging individuals to assume more responsibility for healthcare decisions.  Hospitals competing in this environment need to adopt a market-based model centered on transparency, accountability for outcomes, and customer choice.  This demands a much broader framework for evaluating value and healthcare executives would be wise to look at other industries. A more useful framework is one drawn from the world of retail sales, and incorporates what are known as the 7 P’s of the marketing mix.

The marketing mix is not a new concept.  It was originally developed in 1953 by Neil Borden, President of the American Marketing Association, to look at product, price, place and promotion.  Since then it has been expanded to include people, process and physical evidence.  Here’s how the seven components of the marketing mix translate into the healthcare delivery context.

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