Much has been made of the need for calculating a Return on Marketing Investment (ROMI) for healthcare organizations. Most often regulated to producing brochures and other items of interest, healthcare marketing departments need to exercise a leadership position and talk the financial language of senior management.
Below is an example of an actual ROMI computation for a multi-hospital organization. This of course assumes that you can identify and pull down the information that you need across many platforms of the organization to produce such a result. If you can great, if you can’t then you need to broaden your technological capability and move towards a higher level of computerization and system integration that you already experience.
Work with your finance department. They are a great source of information. With a high degree of collaboration and understanding their viewpoints and perspectives regarding 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.
The method can be adapted to any campaign and provides you with the data fields and logical analysis you need. This has been heavily edited to hide the organization. The full report was quite large and contained an entire programmatic evaluation of the Physician Referral Call Center with recommendations for improvement to increase scope and capabilities. This portion is most applicable for today’s conversation.
How to complete a ROMI Analysis
PRCC ROI
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 countered, 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
You can reach me at themichaeljgroup@aol.com or by calling 815-293-1471 for strategic marketing consulting services.
What is your Blue Ocean Marketing Strategy?
Stumped?
Simply put, a Blue Ocean strategy is one where you redefine a market and dominate. By doing that you are swimming in a Blue Ocean free of your competition instead of swimming in the bloody Red Ocean of competitors beating each other up day-in and day-out.
For your information, a really good book is out on Blue Ocean strategy. I highly recommend you buy and read it. No specific plug or name provided nor payments here in accordance with FTC, FCC and SEC regulations. Search any of the fine book sellers out there for the text.
So how does this apply to healthcare marketing?
Healthcare is undifferentiated and for all practical purposes a commodity. Hospitals, health system, physicians and other providers have similar programs and services, have the same managed care contracts, share physicians etc., etc., etc, across multiple competitors.
The commoditization of healthcare is accelerating even more so now with the entrant of non-traditional providers who are competing on price and service, which is a deadly combination for traditional healthcare providers who are slow to change.
Hence a Blue Ocean strategy by major for-profit competitors actualized and in development in traditional healthcare services that is redefining markets and will eventually allow them to dominate. All the while you swim in the bloody Red Ocean of the “me too” look alike competition for the healthcare consumer.
Just because you package the same mouse trap differently than others, doesn’t mean it’s any different.
Developing what I call a Blue Ocean marketing strategy in truth stems from becoming a Blue Ocean strategy organization. Marketing leadership and organizational transformation at its best and you have can take the opportunity to grow professionally, personally. Be the innovator and show marketing as proactive rather than reactive.
Learn, apply and find your Blue Oceans to swim too from the bloody Red Oceans of unproductive competition.
You can reach me at 815-293-1471 or themichaeljgroup@aol.com for marketing strategy consulting services.
Simply put, a Blue Ocean strategy is one where you redefine a market and dominate. By doing that you are swimming in a Blue Ocean free of your competition instead of swimming in the bloody Red Ocean of competitors beating each other up day-in and day-out.
For your information, a really good book is out on Blue Ocean strategy. I highly recommend you buy and read it. No specific plug or name provided nor payments here in accordance with FTC, FCC and SEC regulations. Search any of the fine book sellers out there for the text.
So how does this apply to healthcare marketing?
Healthcare is undifferentiated and for all practical purposes a commodity. Hospitals, health system, physicians and other providers have similar programs and services, have the same managed care contracts, share physicians etc., etc., etc, across multiple competitors.
The commoditization of healthcare is accelerating even more so now with the entrant of non-traditional providers who are competing on price and service, which is a deadly combination for traditional healthcare providers who are slow to change.
Hence a Blue Ocean strategy by major for-profit competitors actualized and in development in traditional healthcare services that is redefining markets and will eventually allow them to dominate. All the while you swim in the bloody Red Ocean of the “me too” look alike competition for the healthcare consumer.
Just because you package the same mouse trap differently than others, doesn’t mean it’s any different.
Developing what I call a Blue Ocean marketing strategy in truth stems from becoming a Blue Ocean strategy organization. Marketing leadership and organizational transformation at its best and you have can take the opportunity to grow professionally, personally. Be the innovator and show marketing as proactive rather than reactive.
Learn, apply and find your Blue Oceans to swim too from the bloody Red Oceans of unproductive competition.
You can reach me at 815-293-1471 or themichaeljgroup@aol.com for marketing strategy consulting services.
A Lesson in Public Relations Continues
6:09 AM
Chicago Bears, health systems, healthcare, PR
What a case study for healthcare!
The Chicago Bears just can't get it right. This has been a continuing comedy of PR errors that only leaves you scratching your head.
Damage control.....
Day after the press conference, the President of the team goes on the media tour to clarify statements on what the organization meant. (See my previous post) Damage control pure and simple.
It gets even better......
Then it turns out the press release about the firings was wrong and that really two of the assistants weren't fired, but were more like employee-at-will kind of relationships with no contracts. The offensive coordinator and his position coaches had contracts and will be paid. Probably some legal issues now because of that.
PR lesson continued.....
Look. For your own PR efforts, you control the message and the day when you decide to go public. Winning or losing a PR battle is not controlled by the media, it is your responsibility. You, through your actions or inaction's will determine whether you are successful or not. There was no reason in the world for the Chicago Bears to lose the media and message battle. All they did by this comedy of errors is further reinforce to the fan base, local media and national audiences that management is clueless about what to do. The Bears have lost any benefit of the doubt that remained. If this goes south when the 2010 season starts, the fire storm will be unrelenting. Sports fans have long memories.
What you can do to avoid this......
First, admit (and your ego will get bruised) that you may not have a clue about what to do.
Next, listen to your PR staff if you have any, and I am assuming at this point they know what they are doing.
Develop the right messages and practice, practice, practice with whomever you are sending out there to represent the organization. Limit the CEO or president's exposure.
Make sure the press release is right the first time.
If you have never been in a crisis communication situation before, bring in outside expertise. You can not handle it by yourself. This is no time to learn by doing, too much is at stake.
Physicians, patients and the media in your community will remember what you did or did not do for a very long time.
If you don't do it right on a day that you can control the outcome through right planning, thought and action, then you have no one to blame but yourself.
I can be reached at 815-293-1471 or by email to themichaeljgroup@aol.com
The Chicago Bears just can't get it right. This has been a continuing comedy of PR errors that only leaves you scratching your head.
Damage control.....
Day after the press conference, the President of the team goes on the media tour to clarify statements on what the organization meant. (See my previous post) Damage control pure and simple.
It gets even better......
Then it turns out the press release about the firings was wrong and that really two of the assistants weren't fired, but were more like employee-at-will kind of relationships with no contracts. The offensive coordinator and his position coaches had contracts and will be paid. Probably some legal issues now because of that.
PR lesson continued.....
Look. For your own PR efforts, you control the message and the day when you decide to go public. Winning or losing a PR battle is not controlled by the media, it is your responsibility. You, through your actions or inaction's will determine whether you are successful or not. There was no reason in the world for the Chicago Bears to lose the media and message battle. All they did by this comedy of errors is further reinforce to the fan base, local media and national audiences that management is clueless about what to do. The Bears have lost any benefit of the doubt that remained. If this goes south when the 2010 season starts, the fire storm will be unrelenting. Sports fans have long memories.
What you can do to avoid this......
First, admit (and your ego will get bruised) that you may not have a clue about what to do.
Next, listen to your PR staff if you have any, and I am assuming at this point they know what they are doing.
Develop the right messages and practice, practice, practice with whomever you are sending out there to represent the organization. Limit the CEO or president's exposure.
Make sure the press release is right the first time.
If you have never been in a crisis communication situation before, bring in outside expertise. You can not handle it by yourself. This is no time to learn by doing, too much is at stake.
Physicians, patients and the media in your community will remember what you did or did not do for a very long time.
If you don't do it right on a day that you can control the outcome through right planning, thought and action, then you have no one to blame but yourself.
I can be reached at 815-293-1471 or by email to themichaeljgroup@aol.com
