This week’s Modern Healthcare magazine, long a leading industry publication for healthcare and hospital executives, recapped the number of “mega-mergers” taking place during the first quarter of 2017. The article cites four such mergers between eight $1 billion healthcare organizations, becoming hospital mega brands.

According to a director of a large financial advisory firm in the healthcare industry, this is a trend that is likely to accelerate. Mainly because hospital companies want “regional, if not a national, reach to be more attractive to patients and insurers.”

Additionally, the article cites that many academic medical centers are operating at near capacity; they are seeking community hospital partners to take patients requiring less intensive cases.  This is opposite of a few years ago.  These same large academic providers were partnering with community hospitals to generate more referrals for their highly specialized programs that require volume to remain viable.

There were only a handful of “ hospital mega brands” in the marketplace a few years ago – Mayo, Cleveland Clinic, Hopkins, M.D. Anderson, etc.  So the implications of this trend impact hospital branding in a mega-way and bring to mind the importance of key branding indicators such as equity and relevance.

“Where’s the equity” replaces “what’s in a name.”

Accordingly, these new mergers keep a focus on the equity that exists for brands in the marketplace.  Decisions impacting naming, identities, brand strategies, and communications need to start with a thorough understanding of the recognition, reputation, and value a brand has among its current and desired market.  While seemingly obvious, there are countless examples of health systems that have moved away from existing, and high-equity, brand names.  They do this in order to keep the peace among partners and/or start from a clean slate.  In many cases, consumers react negatively and still refer to “their” hospital or system by its original name to the dismay of marketing brand managers.  The only true discipline to gauge the equity of your brand is market research among key customers.  And as one client recently reminded me, “it’s best to let sleeping equity lie,” if it is strong enough to tell the new brand story.  With all these mega-brands taking shape, the equity might lie in both organizations and a long, but strong, new brand will emerge.

What’s the new relevance of the new hospital mega brands?

The biggest buzzword in branding today is relevance. What role and meaning does a brand have in the life of its consumers.  As mega-brands rise, so too must their relevance.   Again, focus group testing among consumers will validate what’s most important to them. They will seek to identify your mega-brand strategy.  There’s a reason that two or more organizations have come together. For Instance, if it makes sense, that should be the story told to prospective users.  Key here is telling it in terms that they understand and find benefit in.  They should not be buzzwords and cliché terms that only make sense to hospital executives.

It seems every few years, there is a new surge in hospital brand mergers. This is followed by an equal number of breakups.  If you’re considering a merger, how far do you want to walk away from the equity? And what about the relevance you’ve established in your marketplace?  If history sheds any insight, you might want to “let sleeping equity lie.”  Meaning, maintain as much of your equity as possible – even in this era of mega-brands.

Contact Springboard to learn more.



A personal note:

Modern Healthcare was referenced in this article. It brings to mind the very recent passing of long-time publisher and healthcare leader, Chuck Lauer.  I had the pleasure of knowing Chuck; he was a close friend of a former business partner of mine and frequent visitor to our office.  In fact, when I was considering leaving a large, advertising agency, I was invited to meet Chuck. During this time, I was able to “pick his brain” on whether hospital advertising would remain a viable industry.  His conviction was how consumers would influence choice and that marketing would influence consumers. It was a key factor in my decision to join a smaller healthcare marketing firm.  As I approach 30 years in this business, I like to think that Chuck. He was motivating and convincing, right again.  RIP Mr. Lauer.

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