We’ve been fortunate to see the changes technology has brought to marketing and marketing measurement over 30 years in this business. As data has grown in its acceptance and utilization, most industries have recognized the ability to apply customer and prospect information to develop relevant and targeted marketing communications. Unlike other industries, such as banking and retail, which have been using sophisticated data solutions to drive their business needs for decades, the healthcare industry is lagging behind in fully utilizing technology. The Budget Control Act of 2011 is the major milestone to incentivize care providers using EMRs. The effective date for Medicare reimbursement reform was on April 1, 2013 and non-compliant providers were facing a 2% deduction under Medicare programs. The changes in the regulatory arena finally pushed the healthcare industry to the modern age. Most experts agree that the healthcare industry itself will be transformed once data begins to play a more integral role in patient outcomes, patient care, and managing the overall operations of healthcare providers. Increased accessibility to growing data sets will revolutionize the industry’s ability to anticipate, prevent, and treat illnesses. But for healthcare brands to utilize this data in order to grow their businesses, marketing needs to recognize the value and power of what their existing data can do.
An evaluation of the marketplace by McKinsey & Company revealed that more than 200 businesses created since 2010 are developing innovative tools to make use of available health care information. One of the most direct and effective methods for monetizing health information is using or sharing the information for marketing purposes. In certain cases, companies like Target have applied data analytics to target marketing initiatives without relying on protected health information to enter this tightly regulated field.
CDW Healthcare in conjunction with O’Keeffe and Company surveyed 150 healthcare decision makers. More than two thirds of healthcare decision makers say analytics is one of their organization’s top three priorities. The top motivational factors driving analytics are: the rising cost of healthcare (59%), Medicare/Medicaid EHR incentive programs (44%) and accountable care (41%) The majority of organizations (67%) are planning for or implementing analytics; however, smaller organizations are lagging.
THE CURRENT CHALLENGE
Over the last 2 years, we’ve met with dozens of hospitals eager to understand how to improve marketing communications and better measure ROI. In an industry that leverages brand advertising exclusively, we’re always amazed that more CFOs aren’t asking for effectiveness of marketing spend and campaign analysis. The good news is that the proliferation of electronic medical records and mobile devices, enhanced computing platforms and infrastructure, new data sharing and mining tools, and other recent technological advances have dramatically increased the ability of health care providers, payors, and their affiliates to generate, aggregate, store, and analyze health information. Government agencies, health information exchanges, mobile device companies, online applications and platforms, social media, and collaborating hospitals, insurers, and physicians are accumulating vast amounts of health information. Rapid progress in data architecture, storage, and analysis has opened avenues to leverage that information in new and innovative ways.
Despite the advancements in technology and the available information, hospital marketers continue to implement marketing plans that are carbon copies of those developed in 2014, 2015 and 2016. The insistence on spending marketing dollars on outdoor, print, broadcast and “out of home” despite qualified measurement and attribution is puzzling. As market leaders like Cleveland Clinic, Mayo Clinic and Johns Hopkins develop strategies to leverage existing patient and prospective patient data, We’re hearing more questions and seeing more interest in embracing data to improve marketing effectiveness and measurement. Common questions presented in my meetings are:
- How can we drive increased patient volume to our most profitable service lines?
- How do we increase referral volumes and specialist’s volume?
- How can I better compete against my well-funded competition?
- How can we measure the effectiveness of what I’m already spending?
Not every hospital embraces marketing. Some hospitals, health systems and CEOs have a firm understanding of what marketing can do for their organization, but this isn’t guaranteed. As Becker’s Review points out, “Healthcare reform has fixed a spotlight on certain quality metrics, such as readmission rates and Hospital Consumer Assessment of Healthcare Providers and Systems scores. Traditionally, these benchmarks haven’t held a large presence in marketing, and it’s still early for hospitals to tout these figures in advertisements.” Some marketing directors may find their leadership team lingering in the Dark Ages of communication strategy. The most indicative sign that a CEO or organization values its marketing strategy is whether a communication professional is part of the senior leadership team. In other words: Is the marketing director involved in finalizing a strategy, or does the director only find out about the plan after it’s been decided. We believe there are relatively easy steps to implementing targeted marketing campaigns and assessing campaign effectiveness you can implement in 2017 with minimal resources and time. And most importantly, we believe you can do so with NO incremental investment and see up to a 300% ROI!
GETTING STARTED – USING THE DATA YOU ALREADY HAVE
The vast majority of data used in the healthcare industry is still in some form of a relational structure, or ultimately will be pulled out into a relational form. That means working with data marts, building a data warehouse or a “data lake”. Enterprise data warehouses (EDWs) are notoriously difficult and expensive. The failure rate of data warehouses across all industries is high – Gartner once estimated as many as 50 percent of data warehouse projects would have only limited acceptance or fail entirely. We recently had a large health system CEO tell us how his Board has “data warehouse fatigue”. Building an EDW or data lake is normally a 4-5 year project at a cost of $3-4 million.
We are constantly reminding our clients that they have already spent millions in acquiring current and prospective patient data. Think about all the conferences, seminars, events, sponsorships and activities in which your hospital has participated. That data exists somewhere – perhaps a database, spreadsheet, data mart or shoebox. In most cases, it has never been monetized and no follow-up or outreach has occurred with many people that have self-identified with your brand, your doctors and your facilities. Many of our clients started out with the recognition they had inherent challenges:
- Little to no ability to track the patient funnel
- Limited understanding of customer segments at the patient level
- Little if any ability to drive patient volumes to profitable service lines
- Limited ability to solve for increased referrals, network specialists or Clinically Integrated Network
- Little if any ability to measure marketing ROI
Look no further than your existing data as a starting point for implementing a data-driven marketing strategy. The diagram below represents the various data assets and silos where current and prospective data may reside for utilization.
While we are big proponents of building a data warehouse, why wait 3 to 4 years for that warehouse to be built and continue to throw marketing and ad dollars at unquantifiable campaigns?
WHAT’S IN IT FOR ME?
In marketing, we often talk about the “customer funnel” to identify the initial steps in developing a communication roadmap. We believe for hospitals, the funnel looks like the diagram below, as we begin to track initial awareness and interaction with a prospective patient, on through procedural interaction and marketing measurement.
Our analysis of the landscape indicates there is clearly a gap in hospital marketing and measurement and quite often this gap is only being filled by those hospitals with significant availability of investment dollars. That said, we strongly believe no increase in marketing budgets are needed and a 10% re-allocation of budget can produce up to a 300% net revenue return in 12 months for a health system. We believe this also provides great fodder for meeting with your CFO and putting a data-driven marketing plan in place. Your talking points can be:
- “Taking an “expense” and turning it in to an asset,
- Building the infrastructure to calculate the ROMI on your 2017 marketing and advertising spend
- Delivering measurement or reporting dashboards to help quantify incremental procedure, practice or revenue growth across the system”.
THE ELEPHANT IN THE ROOM
Hardly a meeting goes by, where we don’t have someone in the room ask about HIPAA and how it impacts marketing communications. “Can we do that” seems to be one of the most commonly asked questions. At Response Marketing Group, we are not HIPAA compliance experts. We turn to compliance professionals and healthcare data experts like Foley & Larner LLP. The following information comes from Foley’s Health Care Industry Team and Privacy, Security & Information Management Practice entitled “Tapping Into the Big Value of Health Care Big Data”.
The Growth of Non-HIPAA Health Data can be aggregated and utilized in ways unheard of just a short time ago. Historically, health care entities have viewed patient data in terms of the HIPAA privacy and security rules, with their definitions of “protected health information” produced by “covered entities” and sometimes shared with “business associates.” Increasingly, however, patients’ health related information is not merely originated by covered entities (providers, payers, clearinghouses), but is also uploaded by individuals themselves into any number of digital health care applications. To the surprise of many, HIPAA does not protect mere medical information. A stack of medical histories or MRI images left on the subway would not violate HIPAA if the patients involved could not be identified. What HIPAA protects is information that does or reasonably could identify the individual. Thus, PHI would include name, address, social security number, or even “the 104-year old woman in the ICU.” Such individually-identifying information is referred to as Protected Health Information, or “PHI.” HIPAA violations carry the potential for fines of up to $1.5 million per year. Any entity seeking to monetize patient information generated by a HIPAA-covered entity must understand its rights to use and disclose that information. Also, entities increasingly find themselves paying significant fines under state law.
As stated above, HIPAA does not restrict the use of all patient data, merely the type of individually-identifiable data that constitutes PHI. Thus, entities should keep a simple rule in mind. While the external monetization of actual PHI will likely require written patient consent, the sale or exchange of de-identified data has far fewer restrictions. This leads to an interesting question: does creating a de-identified data set from PHI qualify as a HIPAA governed “use” of that PHI? The answer is “yes,” it does. The good news, however, is that HIPAA explicitly permits a covered entity to use PHI to create de-identified data, or to disclose PHI to a business associate for such purpose. Further, the law allows a covered entity to let a business associate de-identify PHI, even if the covered entity isn’t going to use the de-identified info. Thus, a business associate can create a de-identified data set from PHI it receives from a covered entity
We all agree the healthcare space is going through transformational change as it relates to directed communications and consumer oriented messaging. We believe we’ve only begun to see how data will shape consumer advertising in the healthcare vertical. As Skip Hubbard, formerly SVP of Business Intelligence at Bon Secours stated at a healthcare conference recently, “One data point or a set of data doesn’t give us the full picture. To improve the way we care for patients we need our data analytics to make connections that translate into actionable intelligence.” We believe the basic principals that we have applied to customer and prospect marketing in other verticals translates to success in healthcare and hospital marketing and advertising. Understanding patient segments and interests at an individual level will drive patient volumes to the most profitable service lines. To learn more about our approach to hospital system marketing and to see our recommendations for measuring success, you can find our whitepaper at www.rmg-usa.com. We trust you will find success in implementing a data-driven marketing approach in 2017.