Download - 060224-CRM Strategies in HealthCare
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Adapting CRM Strategies for the
Healthcare Market
Thomas Corry
Managing MemberCorry Direct Marketing, LLC
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Healthcare CRM
What in the world does healthcare CRMhave anything to do with my business
and why am I here?
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Healthcare Marketingis Changing
Hospitals are moving from mass
advertising to targeted direct marketing. Hospitals are very competitive. Look at
the New York City metro area
marketplace. How do you make sure prospective
patients come to your facility?
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Healthcare Marketingis Changing
Doctors used to be the target of marketing but
has changed to direct to consumer. Hospitals are developing customer outreach
databases and are using traditional directmarketing techniques.
Different offers, creative and techniques areused in direct mail to attract prospects to thefacility.
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Healthcare has many of thesame goals as other consumermarketing companies
Hospitals are no different than consumerdriven companies such as BMG, Time, Inc.,Boardroom, Pfizer, or Chase, etc.
The business acronyms may be different butthe goals are the same.
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Healthcare marketing isconsumer marketing
Patient acquisition: How do I get morepatients coming to my facilities?
Patient retention: How do I get my patientscontinuing to use my facilities?
Patient winback: How do I bring back
patients who havent using my facilities forsome period of time?
New Movers: How do I attract prospectivepatients in my facilitys footprint?
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Three Components to a
Successful Initiative
Filling the Funnel
Marketing Targeting - OfferList Execution Appointment setting Marketing
Margins & Referral PatternsPCP PCR
Op Margin - SplittersOut migration factors
Facility
Management
Managed care
OperationsNet Appointments Slots Throughput
Follow Up - Reporting
Facility ops
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Marketing Value Chain
Compellingvalue
proposition
Cost /benefit
Relevant
Timely
Determinecommunications
channels
Efficient
Appropriatetarget
demographic
Work backtime lines
Advertisingproduction
Stafftraining
Eventcoordination
Creative
Compellingoffer
Attentiongetting
Clear call toaction
Ampledates and
timesoffered
Responseprojections
Non-holiday
Morningslots
Weekends
Operationsplanning Project owner
Call Centercoordination
Ease ofappointments
Site
planning Trackingplan
Validate pro forma
Volume projections
BE analysis
ROI
Key Learnings from Prior Campaign
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Healthcare CRM
Tenet Healthcares south Florida divisionanalyzed their $60 million in marketingspending and realized they could cut over75% of that cost.
Their spending was for billboards, radio,newspaper and other mass advertising.
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Healthcare CRM
Tenet Healthcare tested direct response anddatabase marketing to 3 hospitals in 2000.
Based on the tremendous results the programwas rolled out to 25 additional hospitals in 2001.
An additional 20 hospitals were added in 2002. Two goals from direct marketing:
1. Increase profitability from existing patients
2. Drive prospects to Tenet hospitals.
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Database Architecture
BillingData
CallCenter
Health RiskAssessment /
PersonallyCollected Data
3rd PartyGeodemographic
Overlay Other DataSourcesEncounterData
MarketingDatabaseSegmentation System
Segmentation Scoring
Access & Reporting Tools
Consumers
Direct Mail
Internal Data External Data
PositiveConsumer Response
Call Center
Faci l i ty Screeninglinical Servicesi l l ing Data
Data Hygiene
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Tenet CRMTesting Results
Database marketing is profitable for hospitals
Profitability varies by payor mix and
competitive environment Product lessons:
Cardiology most profitable
Some product lines work, some dont e.g. sleep disorders, sports medicine
Expect eight-week time lag before start ofrevenue stream
Revenue has continued to actualize
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Segmentation andScoring Models
Healthcare life-stage (off-the-shelf)
Modified healthcare life-stage Disease specific models
Predictive models
Other models (RFM, loyalty scoring,etc.)
Neural Net using hundreds of variables
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Segmentation andScoring Models
SolucientSolucientuses cluster methodology,along with other data elements.
CPM Corp. uses neural net technologyto score names by house and prospectand by service line, e.g. cardiology,pulmonary
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Segmentation andScoring Models
CPM Corp. uses two different scoring
approaches. Consumer HealthcareUtilization Index (CHUI) and PatientDisease Index (PDI).
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Segmentation andScoring Models
CHUI scores run from 0 999 to
identify an individuals propensity to usehealth care services as defined by themajor diagnostic categories (MDC) andspecific diseases within the ICD-9 anddiagnostic related groups (DRG). Thehigher the number, the greater thelikelihood the individual will need the
service. This is used for prospects.
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Segmentation andScoring Models
The Patient Disease Index (PDI) is aco-morbidity segmentation system thatuses patient data for segmentation.
In other words, if someone haspulmonary issues there is a likelihoodthere are cardiology issues.
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Revenue Chain
Recipient receivesoffer May go directly
to physician for evaluation ofsymptoms, etc.
Related clinical servicedelivered at hospital
Bypass screening
Product line-specific revenue from a person that was on the original mailinglist that did or did not respond to the offer and might have been screened.
Delivered service and revenue trackedthrough facility billing system
Results andtest plan analysis
pro forma validated
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Control Group Methodology
21,988 mail quantity of campaign prospects pulled fromdatabase
1,161 (5% of total prospect quantity) held back (did notreceive mailing) for control group testing
$82.47 average profit perprospect individual mailed
$15.75 average profit percontrol group individual
$66.72net profit per individual mailed
$66.72 x 21,988 = $1,467,039 adjusted net marketingprofit
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1 Gross charges X PCR = Net Revenue*patient to charge ratio
Product Line (if available)
2 Net Revenue X Net Operating Profit % = EBITA
3 EBITA - Marketing Costs** = Marketing Profit
*Net Revenue is projected based on PCR** Marketing costs include: All creative costs, agency fees, letter shop costs,paper, printing and postage.
ROI Calculation
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Revenue Tracking
Billing System/Code Based
Conducted monthly
Tracks to a specific set of ICD9 and DRG
codes (reviewed by Medical Affairs and PatientFinancial Services)
Data tracked for 12-month period
In direct marketing, matches a mailed-to
individual against the codes In direct marketing, control group revenue isalso tracked against a mailed-to group
Vi t l C l
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Virtual ColonoscopyVital Statistics
(Source: Call Center Reported Data)
Marketing costs: $181,162
(Includes: Radio, creative, production, planning)Responses: 1058 completed calls
Appointments set: 179
Net screens:(if known) 54
Screens needed to B/E: 798
H it l A
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Hospital AVital Statistics
Marketing costs: $16,167
Quantity mailed: 21,985
Responses: 323Appointments set: 346
Net screens: (if known) 307
Visits/discharges: 54
Gross revenue: $574,266Net revenue: $189,508
EBITA : $36,006
Marketing profit/loss: $19,839(EBITA Marketing Costs)
H it l B
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Hospital BVital Statistics
Marketing costs: $24,959
Quantity mailed: 40,000
Responses: 403Appointments set: 286
Net screens: (if known) 200
Visits/discharges: 165*(incl. medical records)
Gross revenue: $75,273Net revenue: $13,620
EBITA: $2,302
Marketing profit/loss: ($22,657)(EBITA Marketing Costs)
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Creative and Offers
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Creative and Offers