The Iron Cage of Health System Marketing - Part One
A series on overcoming industry inertia to prioritize ServingOverSelling
Let’s say you’re a health system marketing leader who believes in the principles of ServingOverSelling. That in an age where healthcare has become increasingly unaffordable for millions of Americans, it’s incumbent on our field to reallocate wasteful spending on promotional marketing and instead invest in serving our patients and communities. You control the marketing budget, you can dictate where to invest, you can make this change happen, right? Not surprisingly, it’s much harder than it sounds, thanks to what we call industry inertia.
Of all the obstacles to effecting real change in the health system space through ServingOverSelling, none is more difficult than industry inertia. The health system marketing field has been growing for more than four decades, with promotional marketing typically the largest line item in the CMO’s budget. That growth has been reinforced by everything from leadership expectations to cognitive biases to professional incentives. The inertia exists at personal, organizational and industry levels, making it extraordinarily difficult to change in any meaningful way. But that is our goal with the ServingOverSelling movement – meaningful change. So to better understand industry inertia and how to overcome it, we’re publishing a three-part series. Part one, which follows, will dive into the concept of industry inertia, or “The Iron Cage” – what it is, why it exists, and how we can recognize it in other fields. Part two will focus on industry inertia at work in the health system marketing field, and part three will outline how we tackle this challenge. To start, let’s dive in by defining what we mean by “industry inertia.”
Defining industry inertia
The study of what we’re labeling “industry inertia” is broad and more than six decades old. While there are many names for the phenomenon – structural inertia, institutional isomorphism, path dependence – we’re using industry inertia because it captures the point clearly. Technically speaking, “inertia” is defined by Merriam-Webster as the inherent property of a body that makes it oppose any force that would cause a change in its motion. Industry inertia, then, is the phenomenon of a field or business sector that moves and grows over time while resisting any form of transformation, let alone a deconstruction of any significant portion of that field. We are all familiar with the idea that “change is hard,” and industry inertia is one reason why that’s true. But change that actually calls for some form of reversal, or what some scholars in the field call “de-implementation,” well that’s a whole other level of resistance. Defined as “the systematic process of identifying, then reducing, replacing, or discontinuing low-value programs and practices, including organizational routines and policies,” de-implementation perfectly describes the ServingOverSelling movement of curbing dominant promotional marketing budgets in favor of investing in strategies such as experience, access, community engagement or communications. In terms of the change strategies required, de-implementation is also very different than transformation that seeks to “implement” new approaches and can be more challenging as well.
If you doubt how big a challenge industry inertia can be, consider the medical field. Healthcare itself is perhaps the poster child for industry inertia – it can take years, if not decades, for medical advancements to change the status quo. In just one example, the discovery that stomach ulcers were caused by bacteria – not stress – took nearly two decades to become the widely accepted diagnosis by the medical establishment. Health insurance is maybe the granddaddy of all industry inertia examples. Health insurance is supposed to exist to keep medical costs in check, yet the industry has failed year after year to attain that goal, with healthcare costs spiraling into today’s affordability crisis. And here we are, with no meaningful change to the industry despite its utter failure in its purported primary mission. (Of course in truth, today’s for-profit insurers are driven solely by profit, not lower healthcare costs, but that’s another story.)
Why do we keep on keeping on?
There are entire books and in-depth studies on industry inertia, de-implementation and other relevant dynamics. Let’s leave aside the well-understood “change is hard” perspective – most professionals understand it’s very difficult to change individual behavior if the “cheese is moved.” We could also spend the entire series on the impact of cognitive biases on industry inertia – just think of the “default bias,” the “status quo bias,” and the “sunk cost bias.” And of course, everyone has a bias to keep his or her job. As Upton Sinclair is famous for saying, “It is difficult to get a man to understand something, when his salary depends upon his not understanding it.” If you’re a health system marketer and you believe your job hinges on pumping out promotional advertising to please your leadership, board or physicians, it would be very difficult for you to drive ServingOverSelling even if you wanted to.
Instead of writing a thesis on industry inertia, let’s stick with three dynamics that seem particularly applicable to health system marketing:
One – The Iron Cage
One of the most cited studies related to “industry inertia” is a paper entitled “The Iron Cage Revisited” released in 1983 by Paul J. DiMaggio and Walter W. Powell. The authors sought to understand what makes organizations so similar in a given field, finding that once a field is solidified, leaders will make their organizations more alike without necessarily making them more efficient. This happens in three distinct ways:
Coercive isomorphism – pressure from organizations and cultures. In the health system space, think of the cry “We have to tell our story – we’re a hidden gem” from the board, even though brand visibility is rarely if ever a primary business challenge for health systems.
Mimetic isomorphism – copying perceived successes even with uncertain outcomes. Think “We have to have a CRM system” even though most health systems have failed to show any meaningful ROI from CRM systems.
Normative isomorphism – the spread of common norms from shared training, conferences and professional networks. Health system marketing is celebrated for intraindustry sharing of best practices, but that sharing is also a positive feedback loop for reinforcing the same approaches across the space and over time.
What’s most interesting is the key finding from the authors that the more uncertain the connection between activities and outcomes, the more an organization will model itself after others. In other words, “I may not be able to figure out whether this works or not, but if everyone else is doing it, I should do it too.” Call it peer pressure to promote, and it helps explain phenomena in the health system marketing space such as the annual clamor around U.S. News rankings or the belief that you need to capture a key sports sponsorship before your competitor does.
Two – Mental Models
Call them sacred cows, mental models, or what one book termed “industry recipes” – these are the practices that come to represent “this is just how we do it,” whether those practices achieve any real impact or not. In J.C. Spender’s book “Industry Recipes,” the author argues these best practices play a vital role in reducing uncertainty in how business is done in a given field, which is critical especially in an industry that is building validity (keep in mind the formal hospital marketing field is roughly 40 years old). Over time, these “best practices” become taken for granted and/or outmoded, but once ingrained can actually hold the industry back from needed change. A perfect example of this is the “brand campaign” in the health system space, an annual ritual that is simply expected by leadership and accepted by CMOs as standard operating procedure. And while brand campaigns can show results such as lifts in awareness or perception, those results are tied to the visibility of the campaign: once the campaign ends, so too do those results. And it’s nearly impossible to tie even those transitory results to actual business impact. So why do these campaigns show up like clockwork in the annual budget? Because it’s standard practice, a given, a box to check.
Three – The Unthinkable
Have you ever faced a moment in life where you can’t imagine a potential change, but you also can’t imagine the status quo continuing? Maybe the best example of this is waiting to hear about a potential new job. Once you’ve realized there’s a better option out there – maybe more salary, advancement, a better company – you can’t imagine staying where you are. But taking the job might mean a move to a new city, or all new responsibilities, or anything else that just seems unimaginable. This phenomenon is a huge contributor to industry inertia: we might realize what we’re doing isn’t right, or isn’t working, or needs to change somehow. Yet we can’t even imagine a world without that thing. In a study issued in 1995, author Mark Suchman describes how practices become so ingrained in a field or industry that alternatives prove “unthinkable.” In 2023, a number of medical schools collectively announced a boycott of U.S. News & World Report rankings, refusing to participate in the annual surveys, while a handful of health systems such as Penn Medicine did the same. The move was so counter to the status quo it drew news stories. Yet despite the chaos the U.S. News hospital rankings cause within the health system space every year, and despite there being little to no evidence the rankings contribute to decision-making by patients, the industry just keeps playing along, spending millions of dollars on licensing fees and advertising. Imagine telling your board you aren’t going to be promoting your system’s high rankings – that’s unimaginable!
No matter how you slice it, industry inertia is real, it’s a massive obstacle to important change, and it’s alive and well in the health system marketing space. Next week we’ll explore examples of industry inertia in our field and the forces of industry inertia that are particularly nettlesome in advancing the ServingOverSelling movement.