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.