The Evolving Value of Healthcare Marketing

Posted January 12, 2017 by caperion

Over the past several years, healthcare delivery in the U.S. has been undergoing significant transformation, the most obvious being the passing of the Patient Protection and Affordable Care Act (PPACA). Among the apparent effects of the passage of the PPACA was the uncertainty it caused health system leaders, in part because of the evolving nature of value based reimbursement. This transitional uncertainty has led the C-Suite of health systems to look more closely at the entire cost structure of their value chains, with an even more critical eye towards those components that are non-clinical in nature…among those the discipline of marketing. Certainly, as Caperion is a firm with specialists in the area of healthcare marketing, we have seen notable reductions in marketing resource range over the past 4-5 years. The purpose of this paper is not to dwell on the forces that fostered this reality, but rather, on what marketing professionals can do to elevate the value of the discipline with their organizational leadership.

Altering the Marketing Value Proposition

For much of its history, healthcare marketing, and advertising and communications, have been synonymous. Branding activities (be they Endorser or Driver branding work) for health systems became more common, in part out of well-considered strategic thinking, but also, in many instances, were (and continue to be) tactical reactions to other forces within the health system, as opposed to the marketplace. By proxy, it is reasonable to assert that healthcare marketing became tactically defined (not strategic) by the organization, and even the C-Suite.

The more tactically defined a subset of an organization is, the more it is vulnerable to cost sensitivity on the part of leadership.

As a result of this challenged reality for healthcare marketing, Caperion scheduled a series of interactions among healthcare marketing executives; physicians, health system business development professionals; and hospital CEO’s to evaluate a new value proposition prototype (VPP) for healthcare marketing. This prototype focused on the following algorithm:

Enhancement of revenue + Enhancement of customer intelligence = Greater Marketing Accountability

This value proposition prototype was warmly received by all participant evaluators, including those in the healthcare marketing discipline. This rearticulated definition of accountability for the marketing function is a strategic point-of-view advocacy of Caperion.

Making VPP a Reality

Caperion, in work with St. Vincent Health (Indianapolis), has pursued a revenue enhancement focus in its marketing efforts for the past several years. More specifically, engagement of consumer direct response efforts to drive patient downstream revenues through self-referring screening and diagnostic. This focus has not only proved demonstrative proof of revenue enhancement, but has exhibited the opportunity for data collection directly though consumer interaction.

Combined addition to system revenue through CDR initiatives averaged $8m annually.

Also, because all screening and diagnostics in the product promotion mix are naturally tied to specific service lines, this results in the marketing effort proactively, and strategically, supporting key physician partners and corresponding service line. Caperion also tracked not only MarCom performance (and made on-the-fly media strategy adjustments), but assisted the client in calculation of CDR ROI to the system.

Additional Perspective Available

Caperion is a marketing and strategy consultancy located in suburban Indianapolis, specializing in the healthcare sector. Should you desire more information on this thought paper, please contact Bob St. Claire via email at bob@caperion.com.

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