Health Maintenance Organizations: Product Life Cycle Approach

Over 7 million persons are currently enrolled in health maintenance organizations (HMOs). Reenrollment rates in such programs indicate that the HMO has moved out of the development stage of the product life cycle and into the growth stage. The growth stage brings continued high promotional expenditures and increased competition. The marketing strategy of an HMO should be directed toward potential adopters of such a plan.A case study on an organization with 547 employees illustrates how potential adopters can be identified. A self-response questionnaire was given to all the firm's employees, and characteristics of HMO adopters and non-adopters were compared statistically. Three significant variables differentiating the 2 groups were race, age, and length of time at present residence. In addition, respondents rated the importance of 28 health care attributes. The respondents' perceptions of these factors were then reduced to 7 underlying dimensions. Unconventional physician's attributes and temporal convenience were found to be the most important factors. Such analysis can aid HMOs in identifying target groups of potential customers and developing promotional campaigns.