When healthcare IT collaborates with hospital marketing, increased profitability is just one of many potential benefits.
Hospital public relations has been around, in one form or another, since the very first time a healthcare facility mimeographed a newsletter, spoke with a reporter or hosted a chamber mixer. Marketing, on the other hand, has traveled a far different road in a much shorter time, and in the quarter century since the profession was first embraced by hospitals, those entrusted with marketing their institutions have laid claim to some noteworthy hits, but, sadly, far too many errors.
When healthcare IT collaborates with hospital marketing, increased profitability is just one of many potential benefits.
Robert Chamberlain is founder and chief executive officer of Aegis, Nashville, Tenn., which currently works with hospitals in more than 70 markets. Contact him at rchamberlain@aegisgroup.com
Hospital public relations has been around, in one form or another, since the very first time a healthcare facility mimeographed a newsletter, spoke with a reporter or hosted a chamber mixer. Marketing, on the other hand, has traveled a far different road in a much shorter time, and in the quarter century since the profession was first embraced by hospitals, those entrusted with marketing their institutions have laid claim to some noteworthy hits, but, sadly, far too many errors.
At its core, it is the role of hospital marketing to develop products, programs and promotions that drive marketshare into their institutions (and, hopefully, serve community good at the same time). But as managed care, shifting reimbursement and a rise in the uninsured have altered the healthcare landscape, a single truth that should be self evident is that all marketshare is not created equal.
Hospital marketers who have continued to rely on high-cost mass media (newspaper and television advertising, for example) to get their messages out are more and more discovering two shortcomings of that strategy. First, many recipients of the message may not be eligible to utilize the facility because of the managed care plan (and provider network) offered by their employers. Second, mass media advertising puts equal weight on attracting those with an ability to pay and those who require uncompensated care or who routinely use the emergency department in place of a primary care physician. In short, mass media, by its very nature, is encumbered with waste.
In this environment where margins are tight and waste is simply unacceptable, the two things mass media does best—drive volume and build broad name recognition—are no longer enough. The key to financial success and long-term sustainability lies instead in strategically and meticulously attracting those patients who will enhance bottom-line profitability for the institution and its medical staff.
To help find these customers, an increasing number of hospitals around the country are turning to an employer-directed marketing strategy. In increasing numbers, this strategy is working. Nebraska Methodist Hospital in Omaha is seeing a $10.20:1 return on investment (ROI). St. Francis Medical Center in Delaware has witnessed a $3:1 ROI, and the list goes on and on. From Saint Luke’s Hospital in Kansas City to East Houston Regional Medical Center in Texas to Loma Linda University Medical Center in California, the success stories are the same.
Employer-directed marketing allows a hospital to work with and through senior executives within local corporations—and only those businesses the hospital selects—to attract desirable marketshare. In this new undertaking, hospital chief information officers become significant players in the marketing strategy by helping to facilitate information capture in a way that tracks program performance and helps ensure that the hospital’s marketing dollars are well spent.
How Employer-directed Marketing Works
Launching a successful employer-directed program begins with the hospital approaching local businesses and suggesting that by working together, they can lower the businesses’ healthcare costs, reduce absenteeism and provide for an overall healthier workforce. With the average cost of employers’ health insurance jumping 69 percent over the last five years, business owners welcome any new and well-thought-out idea that carries with it a reasonable chance to slow this spiraling expense.
Next, the hospital gets a handle on potential healthcare risks in the workforce by having each employee, and often their family members as well, complete a confidential, personal health profile. These profiles detail such factors as individual demographics, health plan participation, family history, physician relationship and selected biometric data. Most employees comfortably complete the questionnaire because, in an era of higher deductibles and increased employee copayments, the personal health evaluations are a value-added benefit they are receiving at no cost.
From a completed questionnaire, the hospital, working in conjunction with a partner experienced in this field, can produce a personalized health risk assessment that each employee is encouraged to share with his personal physician and discuss what steps he should take toward a healthier life. The information also is shared with the participating employer, however, for confidentiality reasons, only in aggregate form.
Employer-directed marketing allows a hospital to work with and through senior executives within local corporations—and only those businesses the hospital selects—
to attract desirable market share.
Through this, employers gain access to first-hand information that identifies and analyzes the relationship between health risks present in their workforce and the cost of employee health benefits, lost productivity and profitability. Such reports allow business owners to identify potential healthcare costs and risks among their workforce related to a specific disease (e.g., heart disease) and project where future claims are heading if problems are left untreated. By taking proactive intervention and moving at-risk employees into appropriate hospital-based programs or early detection/prevention initiatives, employers can save meaningful dollars in employee health costs, absenteeism, healthcare premiums, workers’ compensation and other healthcare-related expenditures.
The information gathered also gives the hospital the capacity to profile potential patients based on physician affiliations, insurance plan participation, family history experience and a combination of other health specific identifiers. This makes a hospital’s database marketing far more efficient and cost-effective. The hospital can, for example, send one household a direct mailer highlighting an upcoming prostate cancer screening, while sending their neighbor a piece highlighting a seminar on women’s health issues.
In doing so, the hospital can have a meaningful communication about individual employee health risks based on first-hand information as reported by that employee. No longer must direct mail be sorted by zip or carrier route; the mailings can be more personalized and targeted, and the waste virtually eliminated.
A well-developed employer-directed program contains many other elements as well. By knowing, for example, which worksites have the greatest population of potential diabetics, a hospital can go to that site and conduct seminars or distribute important educational materials. The hospital also can gear programs to cardiovascular disease, pain management, orthopedics, women’s health issues or a myriad of other issues that directly match an employer’s needs with the hospital’s service-line portfolio.
Chief Information Officer’s Critical Role
Historically, marketing has not been “top of mind” for most chief information officers. Truth be told, CIOs and chief marketing officers often speak different languages and operate worlds apart, both focused on the well-being of their institution but infrequently crossing paths. Yet, when it comes to employer-directed marketing, the role of the CIO is critically important in helping the facility gather and analyze data and thus, ultimately, measure the effectiveness of this program.
Hospitals routinely collect admitting data (name, address, etc.) for every patient entering their system. A lower priority has been capturing the name of the patient’s employer. But unlike other industries where the utilizer of the program or service also pays the bill, in healthcare the employer is often the payer. As a result, capturing their name along with the insurance group ID number is critical. By doing so, the CIO and marketing head can work together to track how many employees from a specific employer utilized hospital services since the program was launched.
The key to financial success and long-term sustainability lies … in strategically and meticulously attracting those patients who will enhance bottom-line profitability for the institution and its medical staff.
With the assistance of the CIO, data can be divided into inpatient, outpatient or emergency room visit, or even as pinpointed as individual service lines. Actual revenue from those patients can be matched side-by-side with the cost of the program, so ROI can be measured in a far more consequential way than historic mass media advertising has ever allowed. This approach positions CIOs with the opportunity to provide analysis that supports a revenue growth strategy versus expense analysis or decision support. This can be a new, exciting and more valued contribution by CIOs in light of the industry’s need for such strategies and accountability.
The CIO also can help analyze data to compare volume since the program began with, for example, the 12-month period immediately prior, so incremental revenue can be quantified. Since such tracking provides the marketing department with valuable information by specific employer, marketing efforts at an individual worksite can be either ratcheted up or down, depending on whether the hospital seeks to increase or lessen penetration at the employer. There is no other marketing program that provides such precision-like tracking capabilities.
Quantifiable, Proven Results
By replacing yesterday’s mass-marketing mindset with a strategy that focuses exclusively on consumers whose reimbursement profile enhances payer mix, employer-directed marketing can improve the hospital’s profitability by linking the health needs of commercially insured consumers with the services the hospital and their physicians provide. In doing so, it establishes a quid pro quo relationship that matches the revenue growth objectives of the hospital with the workforce health issues of area employers. This not only forges business relationships and important community partnerships that didn’t exist before, but also has the potential to positively influence local employers who annually make health benefit purchasing decisions that may affect the hospital’s bottom line.
Most importantly, employer-directed marketing provides for definitive ROI tracking that doesn’t exist in traditional forms of mass advertising or mass promotion. Such tracking should be expected and demanded of marketing by all members of hospital leadership. Chief information officers are an important part of this impactful and accountable strategy. Their awareness, support and engagement in this new era of healthcare marketing are already playing a significant role in the program’s success at a growing number of hospitals across the country.
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