The Slow-as-Molasses Movement of Market Share

Written By Chris Bevolo

In all my time as a healthcare marketer, there was a common belief that when it comes to hospitals and health systems, market share rarely changes year over year. Some events could certainly shake things up, such as a merger or acquisition, or the opening of a new hospital or the closing of an existing one. But using “same store sales” metrics (i.e., the growth of an organization using apples-to-apples comparisons of the same geographic and facility footprint over time), it was nearly impossible to move market share. But if that’s true, what does that say about the impact of promotional marketing?

The lack of market share movement in Minneapolis

First, let’s use one competitive market – the Twin Cities – to help show how market share barely budges over time. The Minneapolis/St. Paul market is served by five major systems – Allina Health, Fairview Health, HealthPartners/Park Nicollet, North Memorial Health, and Hennepin Healthcare. When studying inpatient market share as reported by Fitch Ratings and others going back nearly 20 years, you find that Allina Health was the market share leader in 2005 at 30% (this holds true for Minneapolis itself and the Twin Cities market). Fast forward to 2025, and the market share leader again is Allina Health at…31%. Two decades later, and not only did the market share leader not change, their actual share only increased 1% over that time. In fact, based on the data, Allina’s share never dropped below 30% or exceeded 32% during that entire 20-year period. Further, in a 2007 story on Allina’s bond ratings, Fitch Ratings stated that “Allina's market share position has remained constant since 1999.” The only material changes in market share came from mergers and closrues, such as when Fairview Health acquired the large system HealthEast in 2017, or when Fairview closed one of the major hospitals in St. Paul in 2023.

While there may be some examples across the U.S. where organic market share did change in some measurable way, it’s likely safe to say that the old standard still holds true: market share among health systems barely budges over time.

Market share takes the “market” out of marketing

If market share among health systems is stable over time, what does that say about health system marketing? In most industries, marketing is expected to move market share. A new advertising campaign from McDonald’s, Target or Netflix is designed to drive demand, increase sales, and shift share. And promotional marketing works in industries like retail, consumer packaged goods or entertainment because their products and services are demand driven. An ad from Coke might push me to stop at a convenience store to make a purchase or buy a case the next time I’m shopping. But as I’ve said time and time again throughout my career, healthcare is NOT a demand-driven space. No matter how great your billboard, you will not convince a consumer to have gallbladder surgery. Consumers only think about health systems and their services when they need them, which is typically not often. And when they DO need them, they will be driven to seek help from the doctor, clinic or hospital they already see, by proximity to a care option, by their health insurance, by a physician referral, or by word of mouth. Health system advertising is way, way down on the list of factors that influence a consumer. It’s the whole argument behind “Joe Public Doesn’t Care About Your Hospital.”

The focus on Allina Health is in no way a criticism of Allina’s marketing practices, leadership or team over the years. Same for the other systems in the market who didn't supplant Allina. From what I can see, the Twin Cities systems are typical health systems that follow the typical strategies when it comes to promotional marketing. The point isn’t about Allina, the other Twin Cities systems, or even about the Twin Cities market: the point is about marketing in general in the health system space. Promotional marketing will likely have little to no true impact on your organization’s growth, revenue or margins. And based on the research cited above and what most CMOs and C-suites already know, it’s having little or no impact on market share. Against the backdrop of the growing affordability crisis in this country, the market share case study is yet another reason to put ServingOverSelling.

 

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Chris Bevolo
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