Can 2014 be the year of healthcare marketing ROI?

With the start of the Chinese New Year and it’s the Year of the Horse, why not make 2014 the year of healthcare marketing ROI? As we all face increasingly reduced marketing resources both human and capital in hospital, health systems and other providers, the only way I know to even begin to turn that around is by proving to the organization the Marketing Return on Investment or ROMI.

It’s not the impossible task. And it does involve a high degree of collaboration with the finance department.

Depending on the type of health care organization that one is employed by the measures will be different. For example, if the healthcare organization is sales drive, then measure the generation of Marketing Qualified Leads, Sales Accepted Leads, and based on that increases in the long and short term funnel compared to YOY. Any organization using email can measure click through rate, open rate, unsubscribed rates, open rate and downloads. For hospitals and health system if you have the right systems then you can pull integrated clinical and financial databases by campaign to calculate the ROMI.

Below is an example of an actual computation that I completed for a multi-hospital health system. Now that being said, I did have the good fortune to have an RN staffed call center which was used heavily in all campaigns.  And because the call center and finance systems were linked, once you have that name then you can track and determine the customer value, revenues generated and a return on investment ratio.

The method can be adapted to any campaign and provides you with the data fields and logical analysis you need.  This is not prohibited under HIPPA, so that is not a reason to say no can’t.

An analysis was undertaken to look at the ROMI of the Physician Referral Call Center. The analysis matched a database of call center name records for the period to financial records which had already been downloaded.  The analysis produced the following results:

      9,102 call records were matched with utilization and financial data.

      9,102 calls resulted in a total of 9,121 encounters in the ER, Inpatient and Outpatient categories of service.

      751 encounters were ER

o   177 returning encounters

o   573 first time encounters

      1,105 encounters were Inpatient

o    530 returning encounters

o    699 first time encounters

      7,267 were Outpatient

o   2,014 returning encounters

o   5,253 first time encounters

      Total charges for all encounters equaled $22,522,649

      Charges for new encounters all services totaled $16,085,198 or 71 percent of the total charges

      Average charge per ER encounter  $1,304

      Average charge per  Inpatient encounter $13,581

      Average charge per Outpatient encounter  $903

      Gallup measures loyalty at 68 percent (would return for service) which means that for every 100 patients 32 would not return for care- therefore:

o   ED- 57 returning encounters captured that would not have returned

o   Inpatient – 170 returning encounters captured that would not have returned

o   Outpatient- 645 returning encounters captured that would not have returned

      Incremental charges counted returning encounters not loyal

o   ER - $74,337

o   Inpatient- $2,308,851

o   Outpatient-  $582,505

o   Subtotal charges counted:  $2,965,693

      Overall market share in primary and secondary service area is 14.53 percent. The number of first time encounters have utilized us above market presence is therefore:

o   ER 573 first time encounters,  83 not countered, 490 counted –

o   Inpatient – 699 first time encounters, 101 not counted,  598 counted

o   Outpatient – 5,253 first time encounters, 763 encounters not counted, 4,490 counted

      Based on an overall market share of  14.5  percent the  incremental charges counted for new  encounters not because of market presence:

o   ER - $638,960

o   Inpatient – $8,121,438

o   Outpatient –  $4,054,470

      Total Charges counted: $12,814,868

      Discount from gross charges for Medicare, Medicaid, Managed Care, Bad Debt and Charity Care @ 65% is $8,326,644

      Net Revenue:  $4,488,224

      PRCC program costs:  $233,410

      Net contribution:  $4,254,814

      ROI 18.22:1

Let’s make 2104 the year of return on marketing investment in healthcare.

Have you made your healthcare marketing resolutions for 2014?

New Year's Resolutions, for the most part, play an important role in most everyone's life.  To lose weight. Live life more fully. Be a better husband, wife, or significant other etc.  Value more what we have in our family and friends.  And many more that I have missed. But have you ever considered New Year' Resolutions as a part of your business and managerial life? 

So my last Healthcare Marketing Matters blog for 2013 is about New Year Marketing Resolutions.  My own Top 10 list to get things started.  What are yours?

10.  Focus on meeting the needs of the healthcare consumer aka the newly insured.

9.  Learn from the healthcare retail giants like Walgreens, CVS Caremark and others. Healthcare continues to evolve into a semi-retail market and what has worked in the past won’t work anymore.

8.  Marry price to outcomes and be transparent to the healthcare consumer. Prove value.

7.  Integrate traditional, online and social marketing strategies. All are complementary to one another and drive multiple successes.

6.  Innovate- again and again and again;

5.  Foster a spirit of and demand marketing excellence in the marketing department.  Good enough is not good enough.

4.  Focus on the data and show ROI. If it doesn’t work then stop doing it.

3. Stop using the words "unique", "state-of-the-art", and anything that is considered “buzz word" terminology in my marketing communications.  Unique can be duplicated easily. State-of-the-art refers to yesterday's systems as things change so fast. Buzz words quickly fall out of favor.

2.  Bridge the divide between sales and marketing.

1.  Serve and be humble, for working in healthcare is a privilege, not a right.

It’s been a most interesting year, HMM went over 5,000 page views a month and is now read in 52 countries around the world.  There was a lot of spirited discussion in LinkedIn groups about several of the posts. I fielded calls on various topics from Bloomberg Weekly, Reuters, Associated Press, Crain’s and Strategic Health Care Marketing (published December 2013).  It was all appreciated and fun.  But most of all thank you for reading, for that is what really makes doing this worthwhile. I am taking a couple of weeks off. See you in 2104.

Merry Christmas, Happy Holidays and Happy New Year! Have a healthy, safe and prosperous year.

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger read in over 52 countries worldwide.. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executivesand a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn and Twitter.

How do you market the employed physician?

With dynamic changes taking place in the healthcare as it evolves to a semi-retail environment, employment of physicians is seen as central to the success of hospitals and health systems surviving in an era of reform.   A side note to physicians, I believe that there will always be independent practitioners, but that is a discussion for another day.   

With this new opportunity to reinvent, revitalize and recapture what previously before had been an adventure on the part of hospitals with mixed results, its time to discuss how one goes about marketing the employed physician.

It's easy to look at this and say we'll just do what we did in the past in promoting employed physicians and be done with it.  That is a dangerous mistake in the age of healthcare consumerism.  The newly insured are expecting to have some level of choice, are social media networked and will be controlling many of the purchase decisions where previously, the healthcare provider drove many of those decisions. 

What is needed is a new look at what you are doing and changing to meet the needs of the newly insured healthcare consumer.

With great change comes great opportunity.  That is if one is willing to embrace that change and find new ways of moving forward and creating value. 

Brand. Value. The Healthcare Consumers Choice.

Communicate very strongly how your brand and brand promise are associated with the employed physician.  Doesn't matter if he or she is in a Medical Office Building (MOB) you own, Accountable Care Organization (ACO) or Medical Home (MH) or a multispecialty group practice.  Bring your brand to the forefront and brand the doc to you. The physician represents the healthcare providers brand at an individual level.  Capitalize on that credibility transfer opportunity and leverage it.

Communicate the value that the employed physician brings to the community and the healthcare consumer.  Communicate the value that the doctor brings to the brand.  Stop talking at people, talk to them. Talk to them with compelling value driven reasons and stories as to why they should select that doctor, or even why they should even considering switching physicians. 

Stop wasting money putting ads in papers that expect people to take action simply because the doctor is on your medical staff. That treats the healthcare consumer like they are idiots.  They're not. They are demanding value and acknowledgement that they have a say in what's going on.  If you won't meet their needs they will go somewhere else.

The newly insured healthcare consumer is gaining market power as they reach into their pockets to pay those high deductibles and co-pays.  As the economic cost rises for the healthcare consumer, so does their attention to outcomes, quality, experience and price.

If you're not communicating brand, value and what's in it for them for selecting the employed physician, then you can put it in the bank that the healthcare consumer is will pass on by  and go where they perceive the value to be greatest for them in line with the price they are paying.

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executivesand a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn and Twitter.

Why isn’t hospital advertising changing with the times?

I have to admit, this is a pet peeve of mine, disingenuous hospital advertising. In a day and age where healthcare is evolving to a consumer centric, semi-retail model, some hospital marketers and C-suite leadership continue to treat the healthcare consumer like they are incapable of making informed choices.

With the healthcare consumer having a higher cost stake in the process with larger deductibles and co-pays, your price, and outcomes data readily available, it would seem that the time for change has come.

Remember, when you are marketing to individuals, they don't become a patient until they receive a service from you.  So in one-third of the time in their interactions with you, the healthcare consumer is only a "patient" during diagnosis and treatment. Two-thirds of the time they are not patients, and most likely are arguing with your billing department about the charges.

Arguments aside, what should hospitals be advertising to create an unassailable market position, a strong brand, as well as an enlightened and informed consumer?  

Is it the "we are unique and world-class", best doctors, hundreds of locations, even though The Joint Commission was just there for a sentential event?

Our technology is state-of-the-art.  Never mind that a new technology was just introduced and you don't have it.

Another winner; we have the most shiny trophies and quality awards for several services. Oh, and even though we don't have a quality award for all services, if everybody else was as good as us message to go with it, “a 100,000 lives would be saved annually"! Really.

How about the ever present focus on the physicians with messaging about having the best primary care or specialists in the region that drones on about everything other than healthcare.  Prove it.  Maybe the healthcare consumer will take you seriously when you finally report Dr. Hodad and remove him from your medical staff.

I think, that pretty much for the most part, sums up the current state of hospital advertising.  And when several hospitals are staying all of these things at the same time in a market, do you really believe that the consumer is paying any attention at all, when there is so little differentiation,  it all looks like "me too" and just shouting for attention?

It makes the Board, senior management and physicians feel good, while your audience receives absolutely no information that will help them make some of the most critical choices and decisions in their life.

The time has come healthcare providers to provide meaningful information in the marketplace that will allow the healthcare consumer to become informed, educated and participatory in the care decision-making process. 

You should be transparent and talking about your outcomes and prices.  The healthcare consumer is hungry for information and searching the internet as well as other sources about you and how you perform. They are paying more of the cost. Demanding more say in what goes on. And don't like being treated like they are some small child who can't make a decision.

To use an often quoted metaphor, the wave of change is upon the hospital industry as we move from provider-dominated and controlled decision-making model, to a healthcare consumer and patient-directed, controlled model. 

Your choice so chose wisely, the future of your organizations depends on it.

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executivesand a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn and Twitter.

The media is calling; how do you respond to PR crisis?

Sometimes, another organizations PR missteps are an opportunity to learn how not to handle a PR crisis.  Just ask the any of the hospitals and health systems that have been in the media the past few weeks with HIPAA violations for data beaches. And what I have seen from the healthcare consumer side in the coverage and their responses have been arrogance, apathy and really stupid responses by senior management.

I mean really, “We had a panic button and security camera.”  Does it matter in your response that the theft happened after hours?  Or the, “We had 60 days under the law before we had to report it.”  How do you think the public reads that answer of hiding behind regulations when their personal data is at stake?

In an age of healthcare model evolution from provider-dominated models of decision making to consumer-directed models, those bygone days of being able to mismanage a PR crisis and response and get away with it are gone.

Is your response to dive for under the desk? Do you send out poorly prepared underlings, to face reporters and the public? Does leadership, make proud pronouncements at the outset, that could come back to haunt you because at this point, you just don't know?   Do you react as an arrogant organization with the, "How dare you question us response"?   Do you think that it can never happen to you? Do you have a crisis communications plan in place?

Every healthcare organization will face a PR crisis. How you handle the communications, will determine the amount of brand damage and length of time people remember, the good and the bad.  In this age of social media and the Internet, there are no, "We just need to wait 3 days to weather the storm", anymore.

Many times organizations respond with:

·         Lack of organizational understanding of the need to handle a situation as crisis communications;

·         Different, conflicting senior management messages;

·         Testy responses to questions;

·         Lack of preparation by speakers in understanding the seriousness of the communication;

·         Poor speaker body language;

·         No overriding organizational message;

·         Organizational arrogance;

·         Lost messaging opportunity;

·         Appearance of blaming others;

·         The organization appearing not accountable;

·         The organization furthering to anger the media;

·         No response at all with the "it's just a three day story and will go away";

·         Sending out unprepared underlings to face the media;

Is it not true that any press is good press!  Every day, someone somewhere faces a crisis communications issue which is poorly handled.

By following these planning guides, you can weather any storm, limit reputation, revenue and ultimately brand image damage:

·         Understand the nature of the situation;

·         Be transparent;

·         Be proactive in how you intend to address the situation;.

·         Limit the amount of time senior leaders i.e. the CEO or president speak;

·         Make sure everyone has the same message and is on board;

·         Develop strong organizational messaging of care and concern;

·         Don’t scapegoat, blame others or give the appearance of blaming others;

·         Don’t tell people things will change when things are not changing;

·         Practice, practice, practice;

·         Bring in an outside PR firm for another viewpoint;

·         Understand that your reputation is built up over a long time and can be destroyed in a few short minutes;

·         Remember that it is not just a three day story;

·         Watch your body language;

·         Know your facts about past performance, reporters will be prepared;

·         Learn from others;

·         Each year engage in a day of media training for executives. Dealing with the media is a learned skill that the majority of executives do not have.  It is not as easy as it looks.

Most importantly, engage the media all the time all year round not just when you have a problem.  By establishing positive media relations with the good you do, you won't necessarily be cut any slack in a bad situation, but you will get the opportunity to tell your side.  You won't if you don't have good media relations already in place.

Plan now for that crisis communications event, and you will better off as a prepared healthcare organization.

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executivesand a Professional Certified Marketer, American Marketing Association.  Like us on  facebook at the michael J group, and connect with me on LinkedIn and  Twitter.

Can earned media, public relations and social media drive healthcare marketing strategy?

Given the extraordinary competing needs in healthcare organizations to meet the new reality of the healthcare market place from EMRs to employed physician, too new treatment and diagnostic modalities and declining reimbursements, marketing gets the short straw most of the time in those resource allocation decisions.  And that is a dangerous position to be in when a market is evolving to a semi-retail, consumer-centric model.

But when you have constrained marketing resources, and you have to have a continuous presence in the market place to shift healthcare consumer’s attitudes, preferences and choices, the triple combination of earned media, public relations and social media working in a strategic, integrated fashion can achieve that end for you.

Make no mistake about it, combining social media, public relations and earned media is hard. It is much more than a press release or an event. You have to develop relationships with reporters. You have to plant and cultivate story ideas. You have to respond to reporters request for more information. It takes time. It takes patience in a period of time where all we ask on a daily basis is, "What did you do for me today?"

You need to find ways for reporters and editors to follow your tweets. They have to be exposed to your blog or your company pages on LinkedIn, YouTube or facebook. That’s the value in earned media and public relations by integrating those efforts with social media. It becomes your ability to establish a powerful continuous presence by expending human resources with the talent in your marketing operation not financial. And the payoff by combining the three in an integrated strategic fashion can be huge.

Earned media and public relations driving social media have value.

All that content that goes online comes from somewhere and has to go somewhere.  A reporter has to write it.  A network broadcaster has to cover it. Columnists look for it.  It goes out on facebook, web sites, YouTube, twitter and electronic / print editions of magazines, daily newspapers and specialty publications.

Earned media and public relations can become viral in social media because it has so many different outlets.  When a news outlet or publication carries your brand messages, it makes what you are doing seem more believable.  Once the story runs about a topic and you're the first, it's much harder for your competitors to get out there with the same message.  A powerful way to differentiate yourself which also has a considerable number of aftermarket uses.

There is a bigger payoff too.

Every organization will experience a communications crisis. Taking the time to develop positive relationships with reporters, blog writers, broadcast media and others has a big payoff in a media driven crisis. The development and cultivation of a relationship with media doesn't mean that the story won't run. But what it can mean is the difference between a story that is balanced and fairly reported, versus a story that is one-sided against you.  As we all know, negative news about travels farther and faster than positive news, which does more harm than good over the long haul.

So, maybe it's time to rethink in an era of declining healthcare marketing resources traditional marketing activities, to changing your markets with earned media, public relations and social media?

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn, Twitter, and Pheed

How do you market healthcare in an era of reform?

Faced with a cacophony of payment models from fee-for-service to value and risked based, with everything else in between, the evolving healthcare consumer, millions of people in the coming months gaining access to healthcare via the HIX insurance purchase, healthcare marketing becomes an even greater challenge than before. One size does not fit all. And growth is good.

Sustainability...Presence...Perception...Experience...

These are the four dynamics that direct-care healthcare providers need to understand and incorporate for success in their marketing operations and campaign efforts in a consumer-driven market. No longer nice to have, these four basic marketing concepts are now business requirements.

Sustainability- The resources to effectively and continuously communicate brand and differentiate you’re offering across multiple channels.

Presence - By maintaining a continuous presence across multiple channels as in so many other consumer-directed industries you build brand preference.

Perception- With a sustainable, continuous presence in the marketplace, sooner rather than latter, your key messages become the opinion of you by consumers and they become fact in their minds.

Experience-  Defining, measuring and changing the healthcare consumers experience including price and outcomes to match the brand image, perceptions and opinions of the market place. And is communicated in an integrated multi-channel sustained effort that includes social media engagement.

 Change and Survive

A consumer-directed market is much different environment than a provider-directed market which requires skills and abilities that may or may not exist in an organization.   Key success factors for creating a high performance marketing operation that delivers revenue and market share in an era of reform in the new healthcare environment include:

·       A Chief Marketing Officer that reports to the CEO and is involved in all decision making.

·       Marketing resources- human and capital to support a sustainable and continuous strategically based, fully  integrated multi-channel effort externally and internally.

·       Basing marketing plans and strategies on data rather than thought or here say. Marketing via data analysis from  consumer market research to detailed service area analysis. Not just demographic or lifestyle, but utilization patterns, prevalence and incidence of disease, insurance status, healthcare brand preference, location preference,  message testing etc.

·       Price, outcomes and experience transparency

·       Internal communication and training to educate the organization around marketing efforts, expectations and their role in the execution of the plan.

·      Creation of a comprehensive marketing dashboard which communicates activities and results on a monthly basis to all levels of the organization.

The above organizational marketing success factors are at a minimum what is needed to move healthcare providers from a cottage-industry approach to marketing, to a comprehensive multimillion or billion dollar corporation approach to marketing.

As the healthcare providers continue to consolidate across all segments, marketing will assume an increasingly important role in the survival and revenue generating activities for the organization in a consumer dominated and directed healthcare marketplace.

And that requires a far different innovative sustainable marketing presence that changes perceptions than the old way of doing things.

 Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn, Twitter, and Pheed

How are you improving market share and revenue in healthcare?

As healthcare evolves into a consumer-centric, semi-retail market with you existing in a multitude of reimbursement schemes each nuanced for a different market segment, have you  identified from a marketing perspective immediate actions to  improve your market position and revenue generation?  This isn't about massive advertising campaigns, gimmicks, wellness programs, etc. It’s more about getting the basics right, understanding who pays for what and how, the needs of your healthcare consumers, as well as driving demand, managing demand and moving demand to the right locations. In some circumstances it may even mean de-marketing certain services.

This is a difficult question to answer given the focus and preoccupation with hospitals and health systems, with EMR, readmissions, cost reduction, quality improvement, etc., but at the very least, it does not mean that marketing leadership cannot make a difference in their organizations, lead change and make a meaningful, measureable difference.

So very quickly, here are seven ways to improve your market position and generate revenue.

1.  Brand and competitive position.

Consumers and patients are ready for convenient technology-enabled access to care. Healthcare providers that are capable of identifying their needs and how they want their healthcare needs meet though technology focused on them, will gain new patients and the next-generation of physicians.  It's not a crime to use text messaging to send people information or confirmations about appointments, health reminders, or use QR codes to link to specific education or health offers.

 2. Engage existing customers and patients.

An individual is only a patient 1/3rd of the time they come in contact with you.  That is during the diagnosis, treatment and recovery phase.  Pre and post this, they are a consumer not a patient.  So why then is it the only time you meaningfully engage them is during the period when they are a patient?  Doesn't make a lot of sense really. Consumer and patient engagement is about all of the time, not just some of the time.  Engaging the individual on a continuous basis builds loyalty and return use or repurchase behavior.

3. Engage the physicians.

No matter the payment model you will still need a physicians or physician extenders order to get anything done in a healthcare setting. That means engaging physicians in meaningful ways, using the methods, technology and systems that will make their life easier, improve their productivity and protect or increase their income. An effective and efficient physician has more to do with the impact of cost and quality in your organization then you control.

4. Focus on the physician experience.

How hard is it for a physician or physician extender to practice medicine in your organization?  Have you looked at the hassle factor that physicians encounter when they try to get things done in your care setting?  Understand how the physician experiences your organization at every touch-point they encounter you. Understand their experiences overall from beginning to end, not just in an isolated segment. Fix what is broken, keep what is working. The more satisfying the experience, the better you will do financially.

5. Focus on the consumer/patient experience.

A healthcare provider's ability to deliver an experience that sets it apart in the eyes of its patients and potential patients from its competitors - traditional and non-traditional - serves to increase their spending and loyalty to the brand. You need to actively manage the customer experience in total by understanding the customer's point of view.  That is, all touch points internally and externally that a customer/patient comes in contact with which in turn creates the experience. Exceptional experience means gains in market share, brand awareness, and revenue.

6. Embrace retail healthcare.

Traditional ways of delivering healthcare will go by the wayside in many cases.  Price convenience, access and outcomes are the drivers in retail healthcare.  Find the need, understand the consumer’s behavior drivers, design offering around the consumer not you in a convenient location and price it appropriately. If you can't compete in this way, your market position, share and revenue will erode.

 7. Turn to social media and networks to engage, manage the experience and drive adherence.

 

As healthcare continues the evolution to a healthcare consumer dominated semi-retail environment, social networking is a healthcare marketing channel that is underutilized and underperforms today, but holds great potential to improve engagement, experience and adherence. And that takes healthcare marketing leadership, executive vision and meaningful action.

 
Seven step to market and revenue growth in an evolving healthcare market place. Not an impossible task, but one that does require focus. In the ends it's all about:

 

Michael J. Krivich, MHA, FACHE, PCM, is an internationally followed healthcare marketing blogger with over 5,000 monthly pages views read in over 52 countries worldwide on Healthcare Marketing Matters. These views are my own. He is founder of the michael J group, a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.  Like us on facebook at the michael J group, and connect with me on LinkedIn, Twitter, and Pheed