What is your healthcare marketing ROI?

Healthcare marketing needs to keep up with the times and change as much as overall healthcare. It's time for healthcare marketing departments to step out of the show and tell marketing communications approach to tracking campaigns, making assumptions of its effects on revenue and produce real Return on Marketing Investment (ROMI) measures.

Work with your finance department.  With a high degree of collaboration and understanding between finance and marketing, you can lead and make a difference. By answering questions, concerns and opinions with solid data, you can move the discussion form marketing does “stuff’ to marketing is a financial contributor to the organization.

Below is an example of an actual ROMI computation that I completed for a multi-hospital organization. After this all was presented, all marketing campaigns going forward were tracked though the Physician Referral Call Center.

The method can be adapted to any campaign and provides you with the data fields and logical analysis you need. This has been edited to hide the organization.

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
• 177 returning encounters
• 573 first time encounters
• 1,105 encounters were Inpatient
• 530 returning encounters
• 699 first time encounters
• 7,267 were Outpatient
• 2,014 returning encounters
• 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:
• ED- 57 returning encounters captured that would not have returned
• Inpatient – 170 returning encounters captured that would not have returned
• Outpatient- 645 returning encounters captured that would not have returned
• Incremental charges counted returning encounters not loyal
•  ER - $74,337
• Inpatient- $2,308,851
• Outpatient- $582,505
• 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:
• ER 573 first time encounters, 83 not counted, 490 counted
• Inpatient – 699 first time encounters, 101 not counted, 598 counted
• 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:
• ER - $638,960
• Inpatient – $8,121,438
• 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

So, do you still think you can't prove Return on Marketing Investment?

Marketing is a revenue department and will be more than ever as healthcare change continues unabated. Time for a lot of healthcare marketing departments and organizations to grow up and start proving their value.

Michael Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism, either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Michael is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

Can hospitals use webinars drive volume and revenue?

In this day and age, with internet savvy audiences and patients who are networked to the web, social media, information and such, it seems silly that most healthcare providers would continue to offer only one way for individuals to access health and wellness programs. If you're not using webinars, then you're not meeting your patient/customer needs.

And it's pretty easy to do.

Using WebEx, Talk Ready, Go To Meeting for example, a 30-45 minute health and wellness seminar can be given on a day and tme more convenient for your audience. They can be recorded and archived on your web site for consumer play back at anytime of their choosing. You now begin to build up a library of self-generated health information that is branded to your organization, contains your key messages and promotes a specific service line or targeted capability.

Think about the possibilities for reaching out to employers this way as well. A webinar directed at Human Resource professionals in local companies.

For Accountable Care Organizations (ACOs), a way to keep in constant contact with your members providing targeted health information.

For physicians a way to hold a department meetings or offer CEU program that can be more convenient to them.

For the media and local press, a way to hold a press conference or announce a new service or technological application when they say there not coming on site.

The possibilities really are endless. Your imagination is your only limit here.

Okay, you can't do wellness screens this way, but it could be used to drive volume to the screens as a follow-up to the webinar.

Your Return on Marketing Investment

This strategy and tactic is designed to capture downstream volume and revenue. Let's face it, initially there is little return on a webinar. It's the post webinar relationship management and communication activities that bring the return. By capturing a webinars attendees information, you now have actionable data on which to design more effective marketing and communication programs. Mass marketing that is individualized. You can create a relationship that is more meaningful because it is based on their needs. You're improving customer experience.

So, its 2012 and change in healthcare, well it will be never ending. Time to expand your arsenal of strategy, tactics, tools and techniques to build relationships, loyalty , volume and revenue.

Michael Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

Can you see the 10 signs of an ineffective healthcare marketing operation?

The arguments are in. SCOTUS has already voted on healthcare reform. The majority and minority opinion writers are chosen. Regardless, healthcare will continue to change in very fundamental ways. And that means marketing has to change as well.

Marketing strategy and effective marketing operations is everything today in healthcare marketing. And if you have a bad strategy or no strategy, combined with marketing operational deficiencies, then no amount of tactical execution will overcome ineptitude. Some of the verticals in the healthcare industry are notorious for no strategy and just plain bad marketing operations, following the herd and just keeping the internal audience happy with what they want.

Here are the 10 signs spelling marketing doom in your hospital or other healthcare organization:

1. The marketing plan is not integrated with the organizations business and financial plan.

2. Your brand messages are not clear, and are not integrated across internal and external audiences.

3. The CEO sets the marketing priorities based on what others are doing , the loudest voice in the room or just because he or she likes it.

4. Departments are creating their own logos and communications. Only coming to marketing to "make it look pretty".

5. Marketing has little or no resources allocated for market research.

6. Marketing does not have an organizational voice or champion.

7. Your marketing department can't demonstrate an ROI.

8. The triangle of Public and media relations, social media and internet and traditional marketing is nonexistent or if it exists, lacks integration.

9. Little internal communication throughout the organization regarding marketing efforts.

10. Marketing is not at the senior management table.

Healthcare is transforming from a provider-dominated and directed model, where these types of behaviors and operational deficiencies really didn't make much of a difference. In the evolving consumer or patient-directed and dominated healthcare model, continuation of these marketing operational structures and behaviors need to be weeded out.

The healthcare consumer will become a harsh mistress, and will not tolerate an unresponsive healthcare organizations. Old ways of marketing must be replaced with a new understanding of marketing in healthcare and its power in the marketplace.

Michael Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael J group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

How do you market the employed physician?

With dynamic changes occurring in the healthcare industry as a result of the Patient Protections and Affordable Care Act (PPACA), leading to ACOs, medical homes and such, employment of physicians is making a big comeback to the hospital industry. Born of necessity, hospitals and physicians are being driven by reimbursement changes from production of care payment, to value-based care payment and opportunity.

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.

What is needed is a new look at what you are doing and changing to meet the needs of your healthcare consumer, not you.

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.

Your Brand. Your Value. The Healthcare Consumers Choice.

You need to communicate very strongly your brand and brand promise you are associating 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). Bring your brand to the forefront and brand the doc to you. He or she is no longer an independent practitioner. They represent your brand at an individual level. Capitalize on that opportunity and leverage it.

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

Stop wasting your money putting ads in papers that expect people to take action simply because the doctor is on your medical staff, or in one of your buildings. 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.

Consumers are and will be paying more of the medical bill as time goes along. If you're not communicating value and what's in it for them for selecting your physicians, 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 Krivich is an internationally followed healthcare marketing blogger with over 4,000 monthly pages views in over 52 countries worldwide. He is founder of the michael j group, a healthcare marketing consultancy dedicated to creating value through strategic marketing for hospitals and health system regardless of payment mechanism either fee-for-service or value-based to increase market-share, revenue , brand and demonstrate actual return on marketing investment. Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association.

Has the role of healthcare marketing changed?

Back in December of 2010, I wrote about the changing role of healthcare marketing in the context of PPACA. Earlier this week a reader asked if it had changed nearly two years later. Sadly, not much has changed in the current state and role of healthcare marketing.

Oh, we have added an expanded social media and online practice, but much of the changing role and strategic marketing leadership that I envisioned with the passage of PPACA hasn't taken place. It's pretty much standard operations as in the past. And that is disappointing.

Understand that I am not talking about pharma, medical device manufacturers, insurance companies, suppliers and retailers moving into the healthcare space. They get it. They understand the power and importance of marketing. This is for all the other healthcare providers that are still trying to operate like its 1990.

What I wrote about two years ago, still stands. Healthcare organizations are falling behind daily in their marketing, with little room for error or recovery. To recap that post:

Marketing Leadership

Marketing is strategy first, tactics second. The voice of marketing should reflect the voice of your customers and not be a second thought. Your future programs and services will be determined by the needs of the market, not your gut feeling. You cannot become a customer-driven or market-driven organization if the skills and experiences of marketing is not at the leadership table. Needs to be a Senior VP or VP of Marketing reporting to the CEO.

Managing the Patient Experience

If anyone is prepared to understand and mange the patient experience across the organization it's marketing. Hospitals in particular are making the mistake of putting operations in charge of patient experience. This is an oxymoron really. For the most part Ops can't get a discharge process together in less than 3 or 4 hours. How can you expect them to manage the patient experience? Patient experience means just that- understanding what that patient experiences is at all touch points. And then changing or managing that experience to its fullest potential for the benefit of the patient and the organization. Patient experience is an integrating process across the entire organization internally and externally. One organization to the patient, one patient to the organization. It is not simply another quality program or flavor of the day.

Understanding and Executing Demand Management

The hospital is no longer the center of the healthcare universe. The Patient Protection and Affordable Care Act (PPACA) is designed to keep people out of the hospital. You can actually see a hospital admission as a defect in the process of care. Marketing needs to understand what the demand for healthcare services will be, when they will be needed and manage that demand making sure that the hospital or health system has the right resources, in the right place, at the right time to meet demand. Gone are the days where marketing departments will be driving demand to fill hospital beds. They will drive demand to the appropriate place and location of service.

Becoming a Revenue Marketer and Having Revenue Accountability

Return on Marketing Investment (ROMI) is necessary for anything marketing accomplishes, traditionally, socially or online. Marketers in healthcare organizations need to become revenue producers, not resource consumers that show little value beyond, it looks nice. In fact, marketing should have P&L as well as an SG&A accountability for many of the products and services being offered by a healthcare organization.

Marketing the Manager of Change

Who better in an organization than for marketing to manage the healthcare organizations transformation from an inward-focused it's all about me, to an outward-focused market and consumer driven organization? Open to much debate, this is probably the most controversial look at the expanding role of marketing. Individual who have looked internally at their organizations all of their careers, do not necessarily have the skills, training or abilities to change an organization 180 degrees. And that is the type of change we are talking about here.

Clocks ticking and you're being left behind.

Is your healthcare marketing department a sweatshop?

Though there are many great examples of healthcare marketing across the country, it seems that these are far and few between. This is a shame really because of all the talented marketers that are in the industry. More often than not, we let well meaning individuals who have no formal training or clear understanding of marketing hold sway over the direction.

I do understand the leverage that CEOs, docs, product managers and others hold over marketing. At the end of the day, he or she that signs the check or has the backing wins, right or wrong. And there is way too much of that in healthcare marketing.

With non-marketing trained people running the show causing chaos and confusing tactics with strategy, companies fall behind in markets and are either sold, became acquisition targets since they underperform, or die a slow and painful death.

So how do you exercise marketing leadership in that kind of environment? You need to understand the needs, politics and marketing understanding of the key decision makers.

Here are some questions for your consideration:

Have you let your marketing department become a sweatshop rued but others expecting you to do their bidding no matter how ridiculous the request?
Have you done everything possible to create an understanding of marketing?
Have you ensured that the marketing plan is in full alignment with the strategic and business plan of the organization?
When you suggest a strategy or tactic have I communicated what the return on investment is?
Do you in engage leadership in a discussion of the why of a strategy?
Have you been thinking strategically and not confusing tactics with strategy?
Have you reached out to key leaders and department heads when building the annual marketing plan for their input?
Have you been visible in the organization as the “go-to” marketing expert?
Have you allowed yourself to be an order taker producing lots of “stuff”?
Are you the organizational brand champion?
Are you willing to stop doing things the same old way with the same old result?
Does your organization respect what you do?
Are you willing to just say no, that's not marketing?

In a world of immediate gratification, lack of focus and favor of the day, a marketing executive’s tenure has dropped from 3 years to 12 to 18 months. With such a short time horizon, you might as well lead and know no matter what the outcome is, you gave it your best effort.

Time to stop working in a marketing sweatshop.

Are you using social media and online brand presence to make the patient experience exceptional?

With healthcare moving to a place where price and quality are drivers impacting a consumer who is sharing a much greater burden of the cost, those same consumers will eventually demand online social media experiences commonly found with other companies and services.

Online represents a great opportunity for patient-centric healthcare organizations to break from the pack and create an online healthcare experience that is memorable, exceeding an individual or families experience and expectations.

Are you ready for the challenge?

Most healthcare sites today are static and contain the usual about us, our services location, etc,., etc., etc. Little use of video or other creative ways to engage the customer. Notice that I said customer and not patient. Not everyone that comes to your site is a patient or will be a patient. They are consumers looking for information. Could be a competitor too.

In any case, when you evaluate your social media and online presence, does it:

Delight your customer?
Create sustainable differentiation?
Is adaptable to new opportunities?
Leverages your investment?
Deliver in every situation?

This is the lens that you need to look through to objectively evaluate your social or online presence. If it's not doing these things, then chances are you are not delivering an exceptional experience. But for that matter, neither are your competitors. In the world of healthcare which is too much "me too", the online healthcare experience is pretty boring.

Don't take me wrong, healthcare sites are usually pretty good if people internally have been paying attention to them. They can be described as warm, comfortable, informative, friendly. They can be described as "good enough". Not exceptional. Not delivering anywhere to the capability inherent in an online presence.

I would suggest to hospitals, IDNs, nursing home, specialty pharmacies, home healthcare operations and many others, that you look outside of the your segment of healthcare to consumer facing retail organizations, as well as pharma and medical device, viewing the type of online presence they have.

Make your online presence not just "good enough" but exceptional.

The time is now. The opportunity to change is here.