I do not know if these principles are fully justified as the principle functions in healthcare management. In the for-profit business world, it may be justified to look at creating customers and new dimentions of performance as the chief functions of business. However in healthcare organizations, the function of the HCO is to fulfill its mission which may be completely independent of either of these functions. Some cost centers as defined by Mr. Drucker may actually be the chief function of the HCO.

Only in the narrowest sense can the customers be considered created. The vast majority of the patients at most HCOs are the unfortunate victims of a disease or accidental process. A restaurant advertises and a population becomes familiar with it. One day a person tries it. That customer wasn’t created by the marketing. They were going to eat anyway. So marketing, for the most part may redistribute the same pie, without creating customers

That being said, there are areas where people are converted to customers for services they want but didn’t need (such as Botox).

Innovation rarely opens a new market and for the most part participates in the redistribution.


Scott Larsen

Mr. Drucker is a leader in the business field however I differ with him on some points. Marketing is a support function while "sales" is really out front and brings in the customer/client/patient. Very often in healthcare we do not like the statement "we need to sell our services." We do not want to be viewed as sales reps because we are healthcare professionals. However we need sell our "product" to other physicians in order to obtain referrals. We must sell our outstanding service lines to our communities. We must provide the best care to our patients so by word of mouth they too sell our products. Yes, we are in the business of sales. And yes, if you are not generating revenues you are overhead or a cost center therefore we need to adjust gross profits based on our overhead. Our professionals in the rural, acute care, for profit and non-profit sectors must adopt the best business practices of TPS, Lean, Six Sigma and yes even Peter Drucker.

I think we are missing a point here in that Drucker also cites innovation. Health care is full of innovation that ostensibly leads to better outcomes and healthier customers. However, in the case of innovation in health care it usually comes with increases in cost.