A primary business goal of most healthcare providers is to increase the number of contracts they have with managed care organizations (MCOs) and employers. However, many providers underestimate the importance of marketing to these customers, and limit their contact with payers to an annual contract renegotiation process. These providers fail to realize that the financial terms of contracts with payers are influenced by their relationship throughout the year. These relationships are becoming increasingly important as providers attempt to gain longer term and more exclusive contracts with payers.

Many providers develop business or strategic plans in which they identify strategies to enhance their attractiveness to payers. Yet few providers develop managed care marketing plans that clearly outline the specific message the provider wants to communicate to each payer and the steps the provider will take to create a successful, ongoing relationship with the payer.

Assess the managed care market. Before developing a marketing plan, the provider must understand its market. A market assessment should address:

* The major payers in the market and their particular strengths and weaknesses;

* Each payer’s current relative importance to the provider;

* Each payer’s level of interest in contracting with the provider;

* How quickly the payer expects significant changes to occur in the market, in product type, and provider payments.

The information gathered as part of the market assessment can serve as the foundation for a market database that should be updated at least annually. The suggested types of information to review in the market assessment are included in Exhibit 1. Much of this information can be obtained through public sources, such as national managed care publications, local business publications, state departments of insurance, local chambers of commerce, and MCO directories and marketing materials