Capturing your marketing ROI: hospitals can use their call centers to determine the success of marketing projects aimed at attracting patients to the organization

Healthcare Financial Management,  August, 2003  by Paul Spiegelman

• E-mail
• Print
• Link

Hospital CFOs have been challenged for years to find a credible method for measuring return on marketing investments. Because of the amorphous nature of many marketing projects and the numerous variables that go into defining success of these projects, determining a return on investment for marketing endeavors has been considered virtually impossible.

But as hospitals strive to be more accountable to their boards of directors, community, and other stakeholders, measuring marketing return on investment (ROI) is no longer a luxury--it's a necessity. By capturing information from patients who call hospital call centers, hospitals can justify dollars spent on marketing efforts and channel financial support to the marketing activities that have been shown to enhance revenue.

A hospital call center, in the context of this article, is an inbound or outbound telemarketing function that provides consumers with information regarding the sponsoring hospital, its programs, and its affiliated physicians. Most calls received fall into one of three categories: requests for physician and service referrals, requests for health-related information, or requests to register for education classes and seminars. Most of the calls are generated as a result of the hospital's marketing efforts, thus making the call center a central point of access into the sponsoring organization. Many call centers today are expanding their service and technological capabilities to also support customer interactions via the Web.

Call centers have long been considered little more than "cost centers," because of their staffing and technology needs. But a well-designed call center that has accountability built into its core can propel a healthcare organization toward revenue enhancement and greater market share. Hospitals are beginning to use their call centers to measure income generated by targeted marketing campaigns. That income can then be overlaid on related expenses to create a measure for return on marketing investment.

A four-year study conducted by Solucient entitled The Call Center as a Marketing Channel (February 2003) concluded that "call centers generate an ROI of at least three to one and are an essential driver of hospital revenue, profitability, and patient loyalty."

Solucient's research resulted in some positive findings for hospital call centers:

* On average, 20 percent of a hospital's customers will call the call center in any given year.

* These customers tend to be more engaged consumers than the overall patient population, spending more time making healthcare decisions, using the Internet for healthcare information more often than noncallers, and asking more questions of their physicians.

* The average call-center caller is estimated to generate $13,848 in hospital charges within 12 months after calling the call center versus $5,524 generated by hospital patients overall.

* Each telephone call represents more than $4,000 in downstream charges (inpatient or outpatient charges that occur within 12 months subsequent to the call center interaction).

* One in four callers contacting the call center will have an inpatient discharge or outpatient visit within the 12 months following his or her call.

The Measurement Process

Here's how the measurement process works (using a physician-referral program as an example). A person calls the hospital to request a physician referral. An operator provides the information the caller is seeking and collects important data such as where the caller heard about the hospital's physician-referral program. This information can help the marketing department determine which advertising or other efforts promoting the hospital are most effective, and allows the hospital to steer its funding toward marketing avenues that provide the greatest return and the most profitable customers.

After a reasonable period of time has elapsed--usually 18 months--callers' names and other pertinent information can be matched to actual hospital inpatient and outpatient data. Using a payer mix that matches the specific hospital's profile, healthcare financial managers can determine an average ROI for money spent to generate those patients.

To determine ROI for marketing efforts that lead patients to call a call center, the organization could take the average dollars per call received (income) and subtract the cost of three elements:

* The cost to reach a patient. (How much was spent on the marketing/advertising effort that generated the call to the call center in the first place?)

* An appropriate allocated cost for operating the call center.

* The cost of providing care to the patient once he or she is hospitalized. Every hospital has its own formula, but typically revenue can range from 35 percent to 80 percent of gross charges.

After financial managers have arrived at an ROI, they can see whether the marketing campaign is effective in attracting profitable business or needs to be redesigned. By factoring in the "how heard" information, they can begin to get a clear picture of where to spend their organization's dollars. In many instances, consumers became affiliated with a specific hospital through a prostate-screening or breast-cancer campaign sponsored by the hospital.