Crm in health care

CRM in healthcare

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Healthcare Marketing is Changing

• Hospitals are moving from mass advertising to targeted direct marketing.

• Hospitals are very competitive.

• The issue for them is how do you make sure prospective patients come to your facility?

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Healthcare Marketing is 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 direct marketing techniques.

• Different offers, creative and techniques are used in direct mail to attract prospects to the facility.

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Healthcare has many of the same goals as consumer marketing companies

Hospitals are no different than consumer driven companies .

The business acronyms may be different but the goals are the same.

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Healthcare marketing is consumer marketing

• Patient acquisition: How do I get more patients coming to my facilities?

• Patient retention: How do I get my patients continuing to use my facilities?

• Patient “winback”: How do I bring back patients who haven’t been using my facilities for some period of time?

• New Movers: How do I attract prospective patients in my facility’s footprint?

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Three Components to a Successful Initiatives

“Filling the Funnel”Marketing –Targeting - Offer

List – Execution – Appointment setting Marketing

“Margins & Referral Patterns”Op Margin - Splitters Out migration factors

Facility Management

Managed care

“Operations”Net Appointments – Slots –Throughput

Follow Up - ReportingFacility ops

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Marketing Value Chain

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Healthcare CRM

Healthcare’ companies analyzed their marketing spending and realized they could cut over 75% of that cost.

Their spending was for billboards, radio, newspaper and other “mass” advertising.

Now they are focussing on running campaigns and having an effective CRM

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Effectiveness of Healthcare CRM

Leading Healthcare company tested direct response and database marketing to 3 hospitals .

• Based on the tremendous results the program was rolled out to 25 additional hospitals next year.

• An additional 20 hospitals were added subsequently.

• Two goals from direct marketing: 1. Increase profitability from existing patients 2. Drive prospects to their chain of hospitals.

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Database Architecture

Billing Data

Call Center

Health Risk Assessment /

Personally Collected

Data

3rd PartyGeodemographi

c OverlayOther Data

SourcesTouch

point Data

Marketing

DatabaseSegmentation System

Segmentation Scoring

Access & Reporting Tools

Consumers

Direct Mail

Internal Data External Data

PositiveConsumer

Response

Call Center

Facility Screening

Clinical ServicesBilling Data

Data Hygiene

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Learnings from CRM Testing Results• Database marketing is profitable for hospitals

• Profitability varies by pay or mix and competitive environment

• Product lessons:– Cardiology most profitable

– Some product lines work, some don’t• e.g. sleep disorders, sports medicine

– Expect eight-week time lag before start of revenue stream 11

Segmentation and Scoring Models

• Healthcare product (off-the-shelf)

• Modified healthcare - life-stage

• Disease specific models

• Predictive models

• Other models (loyalty scoring, etc.)12


• Cluster methodology, along with other data elements.

• Neural net technology to score names by house and prospect and by service line, e.g. cardiology, pulmonary (customer-behavior prediction).

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Solucent bench mark study• If all hospitals performed like the benchmark

hospitals, more than 100,000 additional patients could survive each year, and an additional 114,000 could avoid complications.

• With 25 percent higher admissions per bed, benchmark hospitals treated more patients than non-winning hospitals and also treated patients who were more sick and required more complex treatment.

• The 100 Top Hospitals facilities spent an average of 12 percent less, per discharge, than peer hospitals.

• Median total profit margin at 100 Top Hospitals was nearly three times the median of peer hospitals. 14

Predictive Neural Networks• To predict which customers are likely to accept an offer, the

algorithms are created on the basis of which customers have accepted similar offers in the past and which customers have rejected offers.

• After selecting an appropriate discovery algorithm, the data-mining tool is applied to uncover the patterns that can be used for predicting the targeted behavior.

• Only a few dozen transactions by any given customer are needed to determine likely future behavior.

• Data used for analysis can come from all kinds of transactions, including call-center logs, warranty logs, e-mail, faxes, Web-site contacts and even surveys. 15

Cluster analysisCluster analysis builds hierarchical trees based on similarity among individuals compared across several dimensions of questions

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Several softwares are avialable for cluster analysis


CPM Corp. uses two different scoring approaches: Consumer Healthcare Utilization Index (CHUI)

Patient Disease Index (PDI) built in in the software.

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• CHUI scores run from 0 – 999 to identify an individual’s propensity to use health care services.

• The higher the number, the greater the likelihood the individual will need the service. This is used for prospects.

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• The Patient Disease Index (PDI) is a segmentation system that uses patient data for segmentation.

• In other words, if someone has pulmonary issues there is a likelihood there are cardiology issues.

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Revenue Chain

Recipient receivesoffer May go directly

to physician for evaluation ofsymptoms, etc.

Related clinical service delivered at hospital

May or may notGo for screening

Delivered service and revenue trackedthrough facility billing system

Results and test plan analysis

validated22

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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Control Group Methodology example in a healthcare company

21,988 mail quantity of campaign “prospects” pulled from database

1,161 (5% of total prospect quantity) “held back” (did not receive mailing) for control group testing

Rs.82.47 average cost per prospect individual mailed

(Rs.15.75) average profit per control group individual Rs.66.72 net profit per individual mailed

Rs.66.72 x 21,988 = Rs.1,467,039 adjusted net marketing profit24

Revenue TrackingBilling System/Code Based

• Conducted monthly

•Data tracked for 12-month period

• A mailed-to individual campaign matches target against the codes

• Revenue is also tracked against a mailed-to group

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Virtual ColonoscopyVital Statistics

(Source: Call Center Reported Data. USA)

Marketing costs: $181,162(Includes: Radio, creative, production, planning)

Responses: 1058 completed calls

Appointments set: 179Net screens: (if known) 54Screens needed to B/E: 798

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Hospital A Vital Statistics

Marketing costs: $16,167Quantity mailed: 21,985Responses: 323Appointments set: 316Net screens: (if known) 307Visits/discharges: 54Gross revenue: $574,266Net revenue: $189,508EBITA : $36,006Marketing profit/loss: $19,839(EBITA – Marketing Costs)

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Creative and Offers

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Creative and Offers

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CRM in Health care - a paradigm shift

Consumer-Driven Healthcare Calls For….Consumer-Driven Provider Strategies

Pricing Strategies

Organizational &Structural Strategies

Strategies for Greater Efficiencies

Service Excellence Strategies

Communications and Market-Positioning

Strategies

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• CRM enabled all-in-one place to compare:– Hospitals– Doctors– Outpatient

facilities

Humana’s MyChoice ToolsSM

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Compare Hospitals

Side-by-side comparison of:– Hospital

results– Procedure-

specific costs

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Compare Doctors

http://familydoctor.org/670.xml

Details page includes:– Physician-

specificcost estimates

– Questions to ask your doctor

– Links to Rx CalculatorSM and performance reports, as available

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http://familydoctor.org/670.xml

Compare Outpatient Facilities Results page

provides:

– Facility-specific information in 23 markets – to be expanded in 2008

– National average information available outside of 23 markets

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Rx Calculator

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SmartSummarySM

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Integrated Approach to Health & Lifestyle Management

Diagnosed

Disease Management / Nurse

Coaching

Weight Management

Smoking Cessation

Obesity Management

Maternity Management

Healthy/At Risk

Comprehensive Wellness

Health Risk Assessment

Diagnostic Screenings

Incentives/Rewards

Education & Preventive Care

Online Fitness / Diet Tracking

Predictive Health care is an emergent strategy

• Individuals don’t make random selections. They choose based on most suitable and advantageous to them

• Support of payment rates, and meaningful comparisons of provider performance

• Identification of patients of highest risk

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Why predictive health care?

• Early intervention will help moderate costs, improve quality, and increase member satisfaction with their health plan.

• Offering preventative and wellness programs can create a brand equity

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• Example

57 years, Diabetic, Hypertension, cardiac disorder.

– Enrolled in 2006, educational opportunity, compliance monitored, proactive placement of access device with combined result of approximate $130,000 savings due to improved outcome.

Predictive care – A “Win-Win” situation

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• Indian Pharmaceutical Market (IPM) is worth ` 1,40,000 million {currently it is approx ` 45,000 Cores}

• IPM growing at 10% { Currently estimated at about 20.4%}

• There are around 16000 players in the IPM

The Indian scenario

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• Building relationships with doctors for effective marketing.

• Combined market share of top 5 companies not beyond 20%.

The Indian scenario

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• Pharmaceutical industry recognizes and not product patent.

• Making it a 30,000 brands in the country.

• There are more than 50 brands for every generic molecule.

The Generic Market !

“Process patent”

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Same Molecule … Different Brand

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Doctor Population• Doctors strength recognised

with IMA :500,000.• Majority are ‘General

Practitioners’ { 60 – 65 %}• Specialists are around 30 – 35

%• Remaining are Super –

Specialists.• Even the largest of the

pharma corps cannot meet more than 25% of the doctors

The Doctor’s Population !

GP'sSpecialistsSuper Specialists

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• No Advertising in press

• Promotion is directed solely to qualified doctors

• Means of promotion– Medical Representatives– Direct mail– Journal Advertising– Conferences

Promotions

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IDIC Model – Don Peppers and Martha

• Identification

• Differentiation

• Interaction

• Customization

CRM - IDIC Model

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• Identification of Customers (doctors)

• MRs maintains list of Doctors of his area– Name, address, telephone nos., specialty,

qualification, visit timings

• Integration of this data to a central database

Identification

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Identification

• Adding to this data by collecting from other sources like– IMA and Individual Associations– List of Conference Participants– Doctor Referral

• Ongoing process: Continuous Addition, Updating and Deleting

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Category

Core Doctors

Potential Doctors

Non Core Doctors

Differentiation ‘Doctors’

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Build Rapport

– MRs use the Data base & Updates

• Doctor’s Hobbies & Likes / Dislikes• Family details – Birthdates / Anniversary /

No. of Children

– Two Level Interactions• Personal level – Via MRs• Corporate level – Structured questionnaire

mailed to doctors

Interaction

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Data includes:

– PERSONAL INFORMATION: Date of birth, marriage anniversary, details of children, qualification, experience

– HOBBIES & INTERESTS: Activities during spare time, TV channels watched, general interest magazines read, favorite vacation destinations

– PROFESSIONAL INTERESTS: Type of medical journals read, professional membership association, attendance at conferences

Interaction

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• Effective use of the available data

• Greeting Doctors on Birthdays, Marriage Anniversary– Cards, Phone Calls, Cake, Bouquets,

Dinner with Spouse,

• Gifts based on the interest and hobbies

• Information received on every interaction should be fed back.

Customization

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• Loyalty programme would ideally be – identifying accounts, – rewarding– encouraging to increase their spend

• In Pharma industry, the customer (doctor) is not the consumer (patient)

• Programme can be based on classification of doctors i.e. core, important, others

• Continuous monitoring - Downgrading, reducing privilege

Loyalty Programme

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• Brand awareness mailers, new launches, contests etc can be conducted by mail

• The advantages are:– Cost effective – Large audience at lower costs– Targeted & specific to right audience,

specialization, geographic location– Measurable

Direct Marketing

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• Analyzing the returns on conducting the CRM

• Studying prescription– Between doctors

• Exposed to CRM• Control sample met by field force but not

exposed to CRM activities– Before and After exposure to programme

• Professional market research agencies like C-Mark

Measurement System

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Private Hospital

– Research through field force, chemist survey and personal information system to understand the spread of doctors - specialty wise

– Understanding the prescription habit i.e. which brand is preferred by these doctors

– Identify the Doctors who are prescribing the molecules that company offer.

– Promote the brands to these Doctors through MRs

Govt Hospital

– In government hospitals, there is bulk purchase of drugs by the In-hospital chemist

– To build rapport and relation with them

– Tendering for the required drug

– Provide Special discounts

Implementing the CRM

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Private Hospital

– To give these core group Doctors special gifts / Conference participation

– The Sales Manager to pitch in to grow the bond stronger

– To Send greetings, cake & flowers on special occasions

– Equally important to build rapport with the chemists

Govt Hospital

– MRs to meet the Interns / RMOs / House-man

– Arrange Medical conferences

Implementing the CRM

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• M.R.s

– Level of conviction is generally low

– Lack of seriousness in visiting regularly to doctors

– Having data’s about the doctors but not using them.

• Corporate level

– Questionnaire not in proper format

– Inability to cater to the specialists and M.D’s to such seminars.

Implementing Issues !!

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QUALITATIVE

– Taking feedback from the Doctors through field people

– Questionnaire and medical conferences will give a brief idea about the preferences

– Check ORG & C- Marc data for increase in market value & number of prescriptions specialty wise respectively

QUANTITATIVE

– Keep track of increase in sales of the desired terrority

– Check through stockist the supplies made to these institutions and nearby chemists

– Increase in specific product performance in Mumbai

– By checking the sales data – territory wise/ stockiest wise

– Track increase in number of prescriptions & brand loyalty

Effectiveness of CRM !!

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– Provide overall product knowledge in terms of medical and marketing

– Discuss the strategies

– What products to be discussed with which specialty of Doctors

– How to built rapport with Drs / Chemists / Stockists

Training of MRs

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– Core Doctors• With business of Rs. 10 L PM & above

per month

– Potential Doctors• With business of Rs. 3 L to Rs. 5 L PM

– Non – Core Doctors• With business less than Rs. 100, 000

PM

Categorizing ‘Doctors’

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• Aging population• Increased utilization• New medical treatments• New drugs• More intensive diagnostic testing• Epidemic of elective health care • Increasingly unhealthy lifestyles• Shortage of skilled workers• Market consolidation• Malpractice

Jeff Goldsmith and Health Futures, Inc.

Cost Drivers in health care

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A small video clip to share my thoughts

as you go out of the school

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You all have

been great

Documents

Crm in health care