1. CRM in healthcare
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2. 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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3. 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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4. 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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5. 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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6. Three Components to a Successful
Initiatives
“Filling the Funnel”
Marketing –Targeting - Offer Marketing
List – Execution – Appointment setting
“Operations”
Net Appointments – Slots –Throughput Facility ops
Follow Up - Reporting
“Margins & Referral Patterns” Facility
Op Margin - Splitters Management
Out migration factors
Managed care
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7. Marketing Value Chain
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8. 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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9. 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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10. Database Architecture
Internal Data External Data
Health Risk 3rd Party
Billing Touch point Call Assessment / Geodemographic Other Data
Data Data Center Personally Overlay Sources
Collected Data
Data Hygiene
Marketing
Access & Reporting Tools
Database
Segmentation System
Segmentation Scoring
Consumers
Direct Mail
Positive
Consumer Response
Call Center
Billing Data Clinical Services Facility Screening
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11. 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
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stream

12. Segmentation and Scoring Models
• Healthcare product (off-the-shelf)
• Modified healthcare - life-stage
• Disease specific models
• Predictive models
• Other models (loyalty scoring, etc.)
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13. Segmentation and Scoring Models
• 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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14. 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

15. 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

16. Cluster analysis builds hierarchical
Cluster analysis trees based on similarity among
individuals compared across several
dimensions of questions
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18. Several softwares are avialable
for cluster analysis
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19. Segmentation and Scoring Models
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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20. Segmentation and Scoring Models
• 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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21. Segmentation and Scoring Models
• 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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22. Revenue Chain
Recipient receives May or may not
offer Go for screening May go directly Related clinical service
to physician for evaluation of delivered at hospital
symptoms, etc.
Delivered service and revenue tracked
through facility billing system
Results and
test plan analysis
validated
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23. ROI Calculation
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.
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24. 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 profit
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25. Revenue Tracking
Billing 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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26. Virtual Colonoscopy
Vital Statistics
(Source: Call Center Reported Data. USA)
Marketing costs: $181,162
(Includes: Radio, creative, production, planning)
Responses: 1058 completed calls
Appointments set: 179
Net screens: (if known) 54
Screens needed to B/E: 798
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27. Hospital A
Vital Statistics
Marketing costs: $16,167
Quantity mailed: 21,985
Responses: 323
Appointments set: 316
Net screens: (if known) 307
Visits/discharges: 54
Gross revenue: $574,266
Net revenue: $189,508
EBITA : $36,006
Marketing profit/loss: $19,839
(EBITA – Marketing Costs)
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28. Creative and Offers
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29. Creative and Offers
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31. CRM in Health care - a paradigm shift
Consumer-Driven Healthcare Calls For….
Consumer-Driven Provider Strategies
Strategies for
Greater Efficiencies
Pricing Strategies
Service
Organizational & Excellence
Structural Strategies
Strategies
Communications and
Market-Positioning
Strategies
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32. Humana’s MyChoice ToolsSM
• CRM enabled all-
in-one place to
compare:
– Hospitals
– Doctors
– Outpatient
facilities
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33. Compare Hospitals
 Side-by-side
comparison
of:
– Hospital
results
– Procedure-
specific
costs
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34. Compare Doctors
 Details page
includes:
– Physician-
specific http://familydoctor.org/670.xml
cost estimates
– Questions to
ask your doctor
– Links to Rx
CalculatorSM and
performance
reports, as
available
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35. 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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36. Rx Calculator
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37. SmartSummarySM
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38. Integrated Approach to Health &
Lifestyle Management
Diagnosed Healthy/At Risk
 Disease Management / Nurse  Comprehensive Wellness
 Coaching  Health Risk Assessment
 Weight Management  Diagnostic Screenings
 Smoking Cessation  Incentives/Rewards
 Obesity Management  Education & Preventive Care
 Maternity Management  Online Fitness / Diet Tracking

40. 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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41. 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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42. Predictive care – A “Win-Win” situation
• 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.
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43. The Indian scenario
• 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
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44. The Indian scenario
• Building relationships with doctors for effective
marketing.
• Combined market share of top 5 companies
not beyond 20%.
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45. The Generic Market !
• Pharmaceutical industry recognizes
“Process patent” and not product patent.
• Making it a 30,000 brands in the country.
• There are more than 50 brands for every
generic molecule.
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46. Same Molecule … Different Brand
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47. The Doctor’s Population !
Doctor Population
• Doctors strength recognised
with IMA :500,000. GP's
Specialists
• Majority are ‘General Super Specialists
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
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48. Promotions
• No Advertising in press
• Promotion is directed solely to qualified
doctors
• Means of promotion
– Medical Representatives
– Direct mail
– Journal Advertising
– Conferences
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49. CRM - IDIC Model
IDIC Model – Don Peppers and Martha
• Identification
• Differentiation
• Interaction
• Customization
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50. Identification
• 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
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51. 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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52. Differentiation ‘Doctors’
Category
Potential Non Core
Core Doctors
Doctors Doctors
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53. Interaction
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 53

54. Interaction
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 54

55. Customization
• 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.
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56. Loyalty Programme
• 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
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57. Direct Marketing
• 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
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58. Measurement System
• 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
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59. Implementing the CRM
Private Hospital Govt Hospital
– Research through field – In government hospitals,
force, chemist survey and there is bulk purchase of
personal information drugs by the In-hospital
system to understand the chemist
spread of doctors -
specialty wise – To build rapport and
relation with them
– Understanding the
prescription habit i.e. which – Tendering for the
brand is preferred by these
doctors required drug
– Identify the Doctors who – Provide Special discounts
are prescribing the
molecules that company 59

60. Implementing the CRM
Private Hospital Govt Hospital
– To give these core group – MRs to meet the Interns /
Doctors special gifts / RMOs / House-man
Conference participation
– Arrange Medical
– The Sales Manager to pitch conferences
in to grow the bond
stronger
– To Send greetings, cake &
flowers on special
occasions 60

61. Implementing Issues !!
• 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. 61

62. Effectiveness of CRM !!
QUALITATIVE QUANTITATIVE
– Taking feedback from – Keep track of increase in sales
the Doctors through of the desired terrority
field people
– Check through stockist the
– Questionnaire and supplies made to these
medical conferences will institutions and nearby
give a brief idea about chemists
the preferences
– Increase in specific product
– Check ORG & C- Marc performance in Mumbai
data for increase in
market value & number
of prescriptions specialty – By checking the sales data –
wise respectively territory wise/ stockiest wise
– Track increase in number of 62

63. Training of MRs
– 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
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64. Categorizing ‘Doctors’
– 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
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65. Cost Drivers in health care
• 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
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Jeff Goldsmith and Health Futures, Inc.

66. A small video
clip to share
my thoughts
as you go out
of the school
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68. You all h ave been great
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