Case

Sometimes It Works, Sometimes It Doesn’t

Jim Beaufort was appointed as the administrator of Marshall Nursing Center, a 230-bed skilled nursing facility located in a large metropolitan area. The facility’s occupancy rate had gradually declined from 82% (188 residents) a year ago to 74% (170 residents). Three months ago when Jim was hired for the job, the company’s vice president of operations, Ronald Ortner, was upfront about the declining census. Ortner was particularly impressed with Jim’s business degree in marketing, and how Jim had enthusiastically talked about using a “mystery shopper”* to get information on the competitors of a nursing home he had previously managed. Jim knew that his work was cut out for him. When offering the job, Ortner had said, “I am giving you a 20% raise over what you were making at your old job; I want this facility turned around in a year’s time.” To that Jim had confidently responded, “Oh, you will see a trend change much before that.”

Jim spent the first 3 months on the job getting to know the staff, residents, and some of the family members. He made written notes on some of his observations:

• The certification survey 6 months ago was satisfactory. There were no serious deficiencies.
• Some issues with building cleanliness have been addressed with the housekeeping supervisor.
• Department head meetings had been sparse and irregular.
• Food was the most common complaint from residents and family members, but so it is at every other facility.
• The licensed nursing staff is stable, but high turnover of certified nursing assistants creates some staffing shortages. Overtime is high, and the director of nursing says that there is some burnout among both nurses and CNAs.
• The facility’s expenses are below budget; the previous administrator must have been a “penny pincher.”
• Patients are scattered throughout the building. Many of them are occupying private rooms, whereas Medicaid pays only for semiprivate accommodations.

Jim thinks that he has just 9 months left to increase the census and keep his job. So, he embarks on formulating a marketing plan:

• Free up as many patient rooms as possible in one section of the building by moving patients to other occupied parts of the facility. Start an adult day care center by using some of the empty rooms.
• Hire one additional RN and one LPN to alleviate the feelings of burnout among the staff. Start a CNA training program at the facility.
• Send a mystery shopper to the three main competitors to evaluate how they handle the inquiry process. Have the mystery shopper evaluate Marshall’s inquiry process as well. Improve the admission coordinator’s personal selling skills.
• Purchase advertising at the local newspaper, radio station, and TV station that would say:

Marshall Nursing Center has excelled in providing high-quality nursing and rehabilitation care in this community for more than 20 years. Our staff’s caring is like a healing touch. We are accepting new patients. Bring your loved one here and see the results for yourself.

“That will get people’s attention,” Jim thought to himself.

• Discard the black and white brochures and replace them with a four-color brochure with some pictures and the same message used in advertising. Place these brochures in hospital waiting rooms and doctors’ clinics.
• Invite the hospital’s discharge planners to dinner at a fine restaurant. Explain to them the facility’s new marketing plan and ask for their help in referring patients.
• While the marketing plan is being implemented, Jim will personally handle all preadmission inquiries, using the admission’s coordinator for backup.

Jim was confident that in another 6 months the facility’s census would start turning around, but it only deteriorated further. Frustrated, he starts looking for another job. Sitting in his office, he moans, “Marketing is just a theory: sometimes it works, sometimes it doesn’t.”

* A mystery shopper, also referred to as a “secret shopper,” is a marketing professional who specializes in visiting and evaluating business practices, posing as a potential client.

Questions

1.  How should Jim have handled his job interview with regard to the declining census?

2.  Do you agree with Jim’s statement: Marketing is just a theory: sometimes it works, sometimes it doesn’t? Explain why marketing may not work.

3.  Evaluate Jim’s marketing plan. What main improvements would you make?

4.  Critically evaluate the promotional message.