Hospital Campaigns Aim to Deliver--More Babies

The 20-by-60-foot billboard paid for by Westlake Community Hospital and facing all lanes of the Ventura Freeway in Agoura is eye-catching--emblazoned with a picture of a baby seated near the huge motto: “We Deliver.”

On the same freeway a few miles east in the San Fernando Valley, almost to the Valley Circle Boulevard off ramp, another enormous sign advertises the obstetrics department of the Nu Med Regional Medical Center in Canoga Park. Its slogan: “We Specialize.”

With these signs, slick marketing brochures and intense price competition, Southern California hospitals--the South Bay, Westside, San Fernando Valley and the coastal corridor of Orange County, in particular--are stepping up an aggressive marketing war over pregnant women.

Among the manifestations:

--Valley Presbyterian Hospital, a respected, old-line institution in Van Nuys, has joined a growing number of health centers offering cut-rate package prices. At Valley Presbyterian, $900 buys a routine delivery with a 24-hour hospital stay and $3,400 pays for a routine Caesarean section.

--Westlake Community offers 20% discounts to patients with conventional health insurance. Nu Med counters with a $795 package rate and a pledge that the health center will not be undersold.

--At several hospitals owned by Summit Health Ltd., expectant mothers responding to a marketing program called WellBorn get a free pregnancy test. If the test is positive, they are referred to a staff doctor. Already in use at Summit facilities in Santa Maria and in Arizona and Texas, the program is soon to be started at Summit’s hospital in Santa Ana.

--Little Company of Mary Hospital in Torrance--which offers an all-inclusive $840 rate if a woman stays in the hospital 12 hours or less and $925 for a 24-hour stay--distributes specially designed calendars to help an upscale professional woman mesh her job and pregnancy.

The discounted rates are as much as $400 below fees charged by hospitals not yet involved in the obstetrics marketing war.

Though many doctors and patients still aren’t completely comfortable with it, marketing by hospitals is hardly new--with the advent of marketing and promotion departments in health facilities dating back at least to a decade ago, and marketing that recognized obstetrics as an especially promising field began six years ago. But in the last six to 18 months, the battle has been joined in earnest.

‘Filling Them is Critical’

“Hospitals have made a big effort to remodel and build up their obstetrics units, so filling them is critical,” said Jackie Reinhardt, a Beverly Hills hospital marketing consultant, whose firm, AdVantage Marketing Co., specializes in helping hospitals promote their obstetrics units. Reinhardt’s clients currently include Little Company of Mary, Mission Hospital Regional Medical Center in Mission Viejo and hospitals in San Francisco and Rhode Island.

No hospital contacted by The Times would admit offering obstetrics services at less than cost. But several officials conceded the war for obstetrics patients approaches--and sometimes literally becomes--loss leader tactics.

“Basically, that’s what it amounts to,” said Linda Nelson, director of public affairs for the California Assn. of Hospitals and Health Facilities. “It may vary in some instances, but I think many hospitals might (engage in loss leader tactics). If a patient has a positive experience (in delivery), it’s very likely (she’ll) return.”

The philosophy of the marketing and promotion war for obstetrics patients is based on the premise that a pregnant woman is one of the comparatively few health-care-service consumers who has sufficient advance notice of her impending hospital needs that she can shop around for the best price and services.

“There is a lot of consumer choice in selecting obstetrics services,” Nelson said. “It’s the one service in the hospital that is usually a very, very positive experience for the people who use it. It’s fun; it’s exciting, and it’s warm and fuzzy. There are a lot of opportunities to market that kind of service very successfully.

Nine Months to Plan

“You know for nine months that you are going to have this baby, so you have time to make that purchase decision. If you have a heart attack, the decision is oftentimes out of your hands.”

And the hospital that can attract the pregnant customer, so this theory goes, stands a good chance of keeping her as a patient as her family matures and requires subsequent hospitalizations.

“It’s a survival thing,” said Bill Hattendorf, marketing vice-president at Valley Presbyterian, which recently opened a newly renovated women’s and children’s health center. “We could sit here and say to ourselves we’re the best in the Valley and we don’t have to worry,” Hattendorf said, “but the intensity of the competition is such that, as a marketer, I can’t sit idly by.

“When we put our program together, we felt that if a woman delivered here, she would bring her baby here. That would be the linkage. And along with that child would come the father and whoever else was in the family.”

Hattendorf noted that Valley Presbyterian faces direct competition from 28 health centers within a 10-mile radius in a part of Los Angeles that health planners believe faces an especially acute surplus of beds. Figures compiled by the California Office of Statewide Health Planning and Development show an expected surplus of almost 1,100 beds in the Van Nuys area alone by 1990.

Combined with shrinking reimbursement schedules for federal Medicare and state Medicaid patients, agreed Hattendorf and officials of other hospitals and the Hospital Council of Southern California, the clear prospect is for more scrambling by hospitals for the pool of patients who have good insurance coverage or can pay for care themselves.

Competing in Obstetrics

“There’s an increasing level of competitive pressure on all hospitals and many have decided that obstetrics is one of the niche areas they can best compete in,” said David Langness, spokesman for the hospital council. “There are many things that drive it: The need to have paying patients in hospitals, the need to fill beds. When hospitals are having such huge problems with uncompensated patients and indigent care, this is one area--elective obstetrics--in which economic competition is really heating up.”

Hospital officials say a variety of research indicates that pregnant women--especially those who expecting their first child--often select a hospital before they pick a doctor. Some studies, said Carrie St. Michel, vice-president for marketing of Summit Health, indicate as many as 35% of pregnant women pick their hospitals before they select physicians.

Summit Health’s Valley Community Hospital in Santa Maria, the firm said, increased its deliveries from 60 to 80 births a month after instituting the WellBorn promotion, with the free pregnancy test attracting 90% of women who accepted the offer.

Other women who choose doctors first, often find a physician has admitting privileges at a variety of hospitals, so hospitals can still compete for selection. First-time mothers choose hospitals based on perceived quality, marketing experts say, while second-time mothers are heavily influenced by price.

The alternative birth movement of a decade ago forced hospitals to expand delivery departments to include birthing centers, the capability for babies and even husbands to stay overnight with a newly delivered mother and a range of more humane alternatives to traditional stainless steel delivery tables with stirrups.

“Women’s services are really hot in the health-care field,” said Reinhardt, the marketing consultant, “and obstetrics is that critical area where you enter (that market) and where you can cross-sell once you get this woman.”