Smaller, outlying health systems go hyperlocal in Western Pennsylvania

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How do you market your business when you've got two huge competitors outspending you by nine-fold or more?

For Western Pennsylvania's outlying health systems -- which must watch as UPMC and Highmark's Allegheny Health Network spend millions of dollars on advertising -- the answer is to go local, be smart, pick your spots and think creatively.

"We're never going to outspend them or outrace them, and that's not really our objective," said Michael Busch, chief operating officer at Greensburg-based Excela Health in Westmoreland County. "We're just doing our best to make sure our community knows what's available at Excela."

"It is hard to compete and successfully market Heritage Valley Health System in this competitive market," agreed Dan Murphy, vice president of the network of two hospitals west of Pittsburgh. "We compete in a sense by focusing more on target marketing versus more 'general' marketing."

The disparity in marketing buys between the region's two largest health systems and the rest of the field has never been more pronounced since the UPMC-Highmark/Allegheny Health battle for market share ramped up.

According to Kantar Media, UPMC spent $4.56 million on advertising in the first nine months of 2013, while Allegheny Health Network spent $1.66 million, which does not include advertising by its parent Highmark.

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By comparison, Excela Health and Heritage Valley had ad buys of about $500,000 apiece, while Butler Health was at $26,000 and Washington Health System bought $16,000 worth of advertising, according Kantar Media, a global company with U.S. headquarters in New York that tracks ad expenditures.

Jennifer Miele, Excela's vice president for marketing and communications, put those numbers in context: "For every 30-second ad that Excela airs, UPMC can air 25. For every one billboard Excela has, Allegheny Health Network has 25."

The stakes are real.

Excela enjoyed a near-65 percent market share in the Westmoreland County and surrounding area in 2006. By 2012, the health system's market share was 57 percent, with about 35 percent of the remaining patient traffic going into Allegheny County.

Other health systems say their market share has been stable, but everyone is acutely aware of how dynamic the local health care market is now.

As one indication of how hard health systems compete for patients, you only need to drive down Route 19 and see the billboards advertising both Pittsburgh health systems' hospitals plus St. Clair Hospital in Mt. Lebanon, said Larry Pantuso, vice president for planning and business development at Washington Health System.

"You're competing with everybody," he said.

Washington Health System, which he said has maintained a steady 56 percent market share in its primary service area, advertises in newspapers and on local TV, but there are limits to how much it can compete with the big guys in both services and marketing. Trauma patients or patients needing a complex neurological procedure are going to be transported into the city, so at Washington Health System the focus is on offering the best quality care a community hospital can, he said.

"You compete in those segments and you cede the others," Mr. Pantuso said.

Butler Health has put less emphasis on advertising and more on building relationships, both with patients and the local physicians who refer patients to the hospital, said Jana Panther, director of marketing and communications. "Advertising can be pretty expensive and, at the end of the day, it comes down to people having confidence in what you do."

One approach Excela officials have tried is using Google Analytics to research web traffic to their site.

They learned that queries about bariatric weight-loss surgery jumped in the final weeks of the calendar year, probably as people contemplated their New Year's resolutions. Based on that information, Excela put added marketing emphasis on the procedure. "We doubled the volume of surgeries in seven months," Ms. Miele said.

That campaign dovetailed into another marketing campaign featuring prominent local citizens, including a local football coach and a restaurant business owner, whose stories are part of a 30-minute infocommercial.

"These are all members of our community who our physicians cared for," Mr. Busch said, "and when they say they had a great experience at Excela, then people in the community pay attention."

Even with a successful campaign, though, Ms. Miele said Excela has budget limitations that UPMC or AHN don't deal with.

"The difference is, we can hit it heavy for two months," she said. "They can hit it heavy for two years."

Steve Twedt: or 412-263-1963.

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