Healthcare Providers Are Behind the Marketing Curve

By Joe Grace, partner, Chief Outsiders.

Joe Grace
Joe Grace

While pharma companies have grown to become effective direct-to-consumer (DTC) marketers, hospital systems and other large providers lag behind the rest of the industry when it comes to creating highly efficient, measurable and accountable DTC marketing programs. Why?

First, they have never needed to compete historically. With light competition and reasonable levels of reimbursement for decades, everything was fine until the cost of healthcare began to spiral out of control. In response, payers began to push back by negotiating lower levels of reimbursement in-network. In addition, payers, including CMS, have denied claims creating losses and cash flow issues for many providers.

There is also a rapid rise of chronic conditions ranging from arthritis to diabetes to dementia. These chronic conditions are expensive to treat for healthcare providers. They are an even greater challenge to treat profitably in an environment of declining reimbursements.

At the same time, advances in medical treatment and care have extended life spans and placed additional burdens on our healthcare system, including the extraordinary cost of heroic and end-of-life care.

To help offset rising costs and declining reimbursements, large scale providers need more new patients to cover fixed costs.  As a result, most of these providers have added DTC marketing to the mix. This usually takes the form of a website, some SEM and a little local advertising. Unfortunately, many any of these marketing tactics are often random acts of marketing without the marketing insights and strategy required to efficiently compete and effectively reach their target audience.

However, even when these marketing tactics produce a modicum of qualified leads, here is where the provider marketing model breaks down: attribution. Often, leads from marketing campaigns are funneled to the same phone number or web form. By aggregating these leads into one pool of potential new patients, it is virtually impossible to determine which marketing tactics produce the best results. It is therefore almost impossible to optimize marketing spending, which invariably persists with built in under performing media. The old advertising joke about only half of ads working no longer applies today with accountable media except in the case of healthcare provider DTC marketing. This needs to change.

What if every phone call or form fill could be attributed to a specific ad offline or online including individual keywords and ad units? What if leads who converted to patients could be attributed to individual ad campaigns? What if individual ads produced a higher percentage of patients who were the most profitable based on their conditions, treatment and insurance reimbursement? What if specific marketing campaigns produced patients who were more compliant and had better outcomes, and so on?

All of this is possible today with marketing tools that track activity from start to finish and attribute the patients journey to the marketing activity that initially produced the patient lead.

Companies like Health Grades already provide this capability but it’s expensive and not a cost-effective solution for many practices. That’s the bad news. The good news is that new cloud-based technology now allows practices to efficiently build data warehouses to aggregate data from marketing campaigns and electronic medical records to provide invaluable insights with simple queries and visual reporting. Here is a link to a roundup of affordable cloud-based data warehouses.

It’s time for healthcare practices to catch up with the rest of the DTC world and to operate more efficiently with deeper insights into marketing campaign performance and the resulting patient experience.

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