Healthcare is one of the few industries that has not embraced customer relationship management (CRM) - yet. But as revenue streams dry up, no potential stone can be left unturned. Today, some hospitals are beginning to look at the business world for financial answers, and adopt CRM models. Though, as with everything in the healthcare vertical, the model of CRM is a little different in the hospital setting.

“When you talk about CRM, in general there is a tendency to have some misunderstandings. Often, people in the same organization and even the same meetings don't have the same idea of what CRM means,” says Tom Foley, a principal with New York-based Deloitte Consulting LLP's Healthcare Provider practice. “For us, CRM means managing the patient's relationship, enhancing the experience, helping improve the bottom line - and the strategy, operations and the technology to support that.”

Foley adds that though many hospitals have initiatives that could be considered CRM, most shy away from using that label.

And though marketing initiatives can also fall under the CRM umbrella, most CIOs, naturally, defer that function to the hospital's marketing or public affairs department. For example, at Sharp HealthCare, a four-hospital system in San Diego, CIO Bill Spooner directs questions in that space to his vice president of customer strategy, Sonia Rhodes, who runs the Sharp Experience program. Under the program, CRM initiatives are handled as customer loyalty activities, which is seen as a more appropriate approach in the healthcare setting. “We've got to listen to our customers and we've got to engage our employees in a way that makes it meaningful for them too, and that is what we've had our success with,” Rhodes says.

CRM and PHI

“When you think about it, healthcare is not a free market,” says Chad Mulvany, technical manager at the Westchester, Ill.-based Healthcare Financial Management Association. “There are a lot of prohibitions on what you can and can't do with patient information.” He's referring, of course, to the Health Insurance Portability and Accountability Act (HIPAA) privacy regulations, explaining that integrating a CRM application into a medical record would require some very tight restraints. Mulvany adds that he would be hesitant to even inform patients about new products and services. “If I was going to embark on any CRM initiative,” he says, “I would have my compliance and legal folks look at it to make sure we aren't in any kind of gray area; get it thoroughly vetted.”

Foley agrees that HIPAA privacy and regulatory issues necessitate sensitivity in the space, but says it is still possible to adopt some CRM principles in a hospital. “There are two integration points - the EMR and patient accounting,” he says. “You're not going to see too many providers willing to share the episode and diagnostic items, but there would be some integration in terms of when the episode took place, tracking dates and number of encounters.” What that means is patients who haven't been seen for a while may wind up getting a call from the hospital.

Hospital payment structures have also had an impact on the slow adoption of CRM, but as healthcare reform gains steam, and transparency becomes more pervasive, that may change. “The whole culture around how we deal with healthcare is set around things that are old school,” says Scott MacLean, CIO at Newton-Wellesley Hospital, a 289-bed community hospital in Newton, Mass., part of Boston-based Partners Healthcare. “People are used to the physician being all powerful and the physician charts being sacred,” but, he says, this may soon change. He also points out another key differentiator: “It's not approached as a business because people don't pay for their healthcare, so they're not the interested party.”

Some hospitals are leveraging software from vendors like New York-based Thomson-Reuters Solucient, a database subscription service. Under the auspices of the marketing department and Rhodes, Sharp HealthCare uses Solucient's databases for a target marketing analysis.

“In the old days, we used to be able to say, ‘Let's cull the database for people with a propensity for this and this and this,’” says Rhodes. “That became illegal, and we aren't allowed to target based on any utilization information.” (Under HIPAA, patient identifiable information cannot be used to send marketing materials - see sidebar). She says that now a small part of Sharp's CRM program involves generating lists of patients based on lifestyle attributes that databases like Solucient provide. “It does help us from a direct marketing perspective,” says Rhodes. “But if you want to know what's having a bottom line impact for us, that's not the driving force - it's to create the healthcare experience customers have been telling us they want.”

At Sharp, as at many other hospitals, CIO Spooner says customer experience is where the organization has had the most success. “It's when we move to the other side, to the customer interaction, that we see the real gains,” he says. “Our Sharp Experience program began eight years ago with the goal of trying to remake our culture to become the most customer sensitive organization there is.”

He explains that better patient satisfaction through the Sharp Experience is driven by better employee and physician satisfaction. “Everybody's happy,” says Spooner. “We've been quite successful creating a culture of satisfaction.”

Beginning that culture of satisfaction on the employee side is key to the Sharp Experience, says Rhodes. “By creating a better environment for our team members to work, they can focus on creating a better experience for their customers.” Sharp utilizes system report cards to get feedback on the employee and customer experience. “It's one thing to have a brand message, but it's another thing to marry that with the brand experience. For many organizations, there is a disconnect between what an organization says they are and what they really are.”

In Boston, MacLean agrees that his hospital approaches CRM from a patient satisfaction point of view. “We don't want people riding past Newton-Wellesley to one of the academics, so we try and differentiate ourselves on customer service.” He says such differentiation includes cleanliness and responsiveness. “We have established goals and metrics to be accountable, and we are interested in repeat visits,” he says. “The ultimate question is, ‘Would you recommend Newton-Wellesley to friends and family?’”

Is CRM going to gain traction in healthcare? According to Foley, the answer is yes. “Providers are very interested in building loyalty and building their brand, and I think CRM is an initiative that supports that,” he says. “The other thing is that providers are starting to get their core systems like EMR and patient accounting in place and are in a better position to integrate that data.”

And as patients get more involved in their own care, CIOs must understand how to satisfy those emerging needs. “Some of the patients are beginning to ask for interaction with their physician via e-mail,” Foley says. “CIOs are going to start asking their EMR and patient account vendors to address some CRM functionality, everything from being able to track encounters, number of visits, and follow ups. I would be carefully watching to see how this evolves. Figure out what type of data you currently have housed across the organization and start asking, ‘If I could link this and this, what sort of meaningful relationship do you think I might find - and what can we do with it?’”