Marketing to Acute Care vs. LTC Pharmacies

On June 23, Elizabeth Petersen wrote a great article about the differences between marketing in acute care vs. long-term care. Her first statement says it all, “If you market or sell to the long-term care segment or if you’re considering this, be advised: Adopting strategies and messaging similar to those you use for the acute care or physician practice setting won’t work.” Petersen goes on to explain that in long-term care, nurse (and other "frontline caregivers") generally play a bigger role than the doctor when making decisions about new products/services.

I felt as if the article was speaking directly to my company, Talyst, since we primarily service the acute care market and have a growing interest in long-term care. Therefore, I promptly forwarded the link to a few of our executives. In response, Carla Corkern, CEO of Talyst, posed the question “what about the difference between the acute care pharmacist and LTC pharmacist?” Always up for a challenge, I thought I would share my personal thoughts and experiences via this blog…

Although I have never personally marketed to the acute care pharmacist, Talyst does. And, since we are the market leader in hospital pharmacy automation, I’d say we’ve done a pretty good job. In addition, over the past few years, I’ve been fortunate enough to work very closely with our Marketing team and have seen how it’s done in acute care world. And, for the last 5 years I have been developing and marketing products in LTC, so I have first-hand knowledge of the LTC market. So, given this (admittedly very limited) exposure, here’s my take:

LTC pharmacies make (more) money by dispensing (more) prescriptions to (more) patients. Acute care pharmacies don’t make money (or at least that is not the intent); they are a cost center for the hospital. So, while reducing costs is still very important to the LTC pharmacy, it is often not the primary driving force, as is the case in acute care. Acquiring beds, which results in more patients, more scripts, and thus more revenue, is the primary goal of the LTC pharmacy. This is evident from the biggest players, like Omnicare whose primary strategy has been to gain beds through acquisition, down to small regional pharmacies looking to grow through technology differentiation, such as Wellfount Pharmacy in Indiana (both are Talyst customers). Furthermore, LTC pharmacies are notorious for absorbing additional costs in order to gain and retain business, such as providing med carts, fax machines, computers, and software to LTC facilities. Acute care pharmacies do not have to bear these costs, but they also do not have the opportunity to increase revenue (other than becoming an outpatient and/or LTC pharmacy). Therefore, the only way for an acute care pharmacy to make money is to save money, so cost reduction is key. LTC pharmacies, on the other hand, can make money by growing the business, which means acquiring new facilities/beds.

Therefore, when marketing to the LTC pharmacy, instead of focusing on cost reduction, we must answer the following question: how will it help my pharmacy gain/retain beds? Products and services that help LTC pharmacies grow their business will win. That being said, the answer cannot cost more than value of acquiring the business. The solution still needs to be grounded in positive ROI (especially given the current economic climate). Case in point is Talyst’s InSite Remote Dispensing System (automated dispensing technology located at the nursing facility). Because of the undeniable benefits to the LTC facility (medication availability, nursing time savings, diversion control, waste reduction), pharmacies that provide Remote Dispensing to LTC facilities have a distinct competitive advantage. However, InSite will not be successful without providing a positive ROI to the pharmacy. Talyst is acutely aware of this and has continued to hone our marketing message accordingly.

So, to answer the question about the difference in marketing to acute care vs. long-term care pharmacies, I would say it is simply this: revenue growth (grounded in a positive ROI) vs. cost reduction.