Service Line Marketing: Ingredients For Success

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Topics Covered

• Learning Objectives and Take-A-Ways
• Essential Ingredients for Service Line Marketing
• Marketing Prioritization
• Role of Service Line and Marketing Executives
• Market Analysis
• Market Planning
• Integrating Physicians
• Tracking Results and Return on Efforts
• Service Line Marketing for the Health Care System
• Putting it all Together

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Learning Objectives and Take-A-Ways

• How to more clearly focus marketing efforts to
  achieve measurable, profitable and sustained
  results
• How to leverage the expertise of service line and
  marketing executives in the execution of market
  analysis and planning
• How to assess return on marketing initiatives

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Essential Ingredients

• Commitment to the Marketing Process
• Prioritize Service Line Offerings
• Involve Stakeholders With Appropriate Skill Sets
• Include Physicians From Beginning.
• Build Feedback Systems Into the Marketing Plan
• Build Your Efforts Around the Consumer Rather
  Than Supplier

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Whos at the table?

• Tailor to your situation
• CEO
• COO
• Finance
• Physician Representation
• Service Line Executive
• Strategic/Business Development
• Marketing Executive
• Others as appropriate

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CV
Neuro
Womens
Prioritize Your Lines
Ortho
Neuro
Cancer
Wellness
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Service Line Marketing Prioritization Criteria
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Explanation of Ratings on Marketing
Prioritization Criteria

• -Clinical Strengths Does this service have
  exceptional physician or clinical leadership?
  The service with strong clinical quality will
  perform better in the marketplace than one that
  requires recruitment.
• -Positioning Power Some services have more
  symbolic impact on the marketplace than others in
  terms of overall reputation for quality, service
  and positioning, and can spread a halo effect
  over the organization as a whole, such as heart
  surgery, neurosurgery and trauma services. They
  convey an aura of life-and-death medicine.
• -Profitability Is this a service that generates
  profit for the organization? If so, then it
  should be rated more highly than one that
  requires subsidization.

• -Competitor Vulnerability Even if your service
  does not currently have market share, or has low
  market share, consider whether the competitors
  are vulnerable due to lack of/change in
  leadership, location, responsiveness or quality.
• -Spin-Off Revenue Some services produce
  significant indirect revenue. Some services
  produce more long-term customers than others.
  While not gushers in term of direct revenue, they
  may be gushers in terms of overall revenue or
  contribution to the business.

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Explanation of Ratings on Marketing
Prioritization Criteria(cont)

• -Small Investment The smaller the investment
  required and the greater the potential leverage
  of the investment, the more attractive is the
  service as a gusher.
• -Provider Capacity Will this service be able to
  handle more business? Services that are able
  (and willing) to accommodate more business
  receive higher ratings.
• -Product Champion When a service is led by
  someone who "makes things happen," it is an
  important indicator of a gusher. A product
  champion is the rallying force and cohesive power
  who can bring together all the component parts
  and motivate the whole team to go after the
  marketplace.

• -Loyalty Quotient Services that serve as front
  doors or entrée points for patients who are
  likely to remain within the system for other
  types of personal or family care have a high
  Loyalty Quotient.
• Scoring
• -Highly correlated 9 points
• -Moderately correlated 3 points
• -Minimally correlated 1 point
• -Not at all correlated 0 points

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Sample Prioritization
SERVICE Womens Heart Peds Cancer Bone/Joint Primary Care Neuro ED
Clinical Strengths 27 108 96 90 66 64 90 81
Positioning Power 90 108 96 108 58 32 90 75
Profitability 22 108 24 84 102 13 46 29
Competitor Vulnerability 36 38 68 36 30 60 64 25
Spin-Off Revenue 90 108 54 78 72 108 64 75
Small Investment 82 9 73 60 56 30 56 42
Provider Capacity 30 30 90 40 34 48 18 69
Product Champion 12 54 78 74 26 64 64 69
Programmatically Integrated 102 54 76 74 40 68 62 47
Total Score 491 617 655 644 484 487 554 512
Mean Score 41 51 55 54 40 41 46 57
Rank Order 6-7 4 2 3 8 6-7 5 1
Maximum mean score 81
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The 80/20 Rule (or, in this case, 71/63)

• Sorted by discharges. The top 6 MDCs account
  for 71 of inpatient volume and 63 of inpatient
  reimbursement.

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What To Market?
Generally Yes CV/CP Cancer Neurosciences Bone and Joint Diabetes Womens Health Emergency/Trauma Questionable Senior Services Surgical Services Medical/Surgical Diagnostic and Imaging Rehab and Wellness Transplant Emerging Bariatrics Complementary Therapies

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Cardiovascular Service Line Volume Flow
Marketing Interaction
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Defining Roles
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Definition of Roles

• Service Line Executive
• Facilitator
• Troubleshooter
• Implementer

• Marketing Executive
• Creative Thinker
• Discoverer of
• Opportunities
• Counselor

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Desired Characteristics

• Service Line Executive
• Visionary
• Marketing Savvy
• Clinical Expertise
• Political Insight
• Ownership of Results
• Energy

• Marketing Executive
• Visionary
• Know Marketplace
• Marketing Expertise
• Political Insight
• Ownership of Results
• Energy

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Market Analysis
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Market Analysis The Big Picture Questions

• National Trends
• In 5-10 years, how will the provision of care be
  different?
• Which services are deemed as visionary?
• What are the 3 most important services or
  features that are needed to move the service line
  to the role of regional market leader and
  destination status?

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Marketing Assessment for Service Line What
Should Be Profiled?

• Clinical Review Clinical Capabilities and
  Deficits
• Pricing
• Market Review
• Quality Achievements
• How the Business Come in
• Perspectives of Consumers and Referring
  Physicians
• Out-migration From the Service Area
• Care Coordination Processes
• Clinical Services Interdependencies (What Feeds
  What and Is Fed by What)
• Potential Partnerships and Affiliations

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Market Research/Analysis

• Primary
• qualitative and quantitative awareness,
  preference
• needs assessment
• Secondary
• market share
• competitive profile
• benchmarks quality and satisfaction measures
• physician referral patterns, productivity and
  loyalty
• revenue generation by major procedure

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Where Does Business Originate?

• Identify
• key referral sources
• percentage of referrals by key source
• potential untapped sources of business

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Where Business Originates Digestive Diseases
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Where Business Originates Radiation Oncology

• Referral Source
• PCPs
• Surgeons
• Emergency Department
• Other specialists

• Medical Oncologists
• 50 from PCPs
• 50 from Surgeons

Patients

• Radiation Oncologists
• 37 of radiation oncology patients are referred
  by medical oncologists
• 40 referred by PCPs
• 10 from surgeons
• 13 referred by other specialists

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Inpatient Oncology Average Contribution Margin
-34
Percent change from CY01 to CY03 is outlined in
text box.
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Oncology Top Volume Cancer Cases
59 of Total Cases
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Cancer Relative Risk by Body Type
Source Illinois Department of Public Health,
Illinois State Cancer Registry Data represent
5-year age adjusted cancer incidence rates
Relative risks that are 10 or higher
highlighted.
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Oncology Patient/Referral Flow By Body Site
Prostate
Consumer
PCP
Urologist
90
Surgery
10
Radiation
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Assessing Price Elasticity for Discretionary
Services Bone and Joint Center
Interest in Osteoporosis Screening
Willing to Pay Out-of-Pocket
Survey of 1000 adult women Rynne Buckley
Marketing and Communications
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Highest Reimbursed Procedures Cardiac Service
Line

• The top cardiac inpatient procedures that had
  the best average reimbursement (collection) per
  case
• Other permanent cardiac (DRG 116) 2.1
• Circulatory Disorders (DRG 121) 1.3
• Circulatory Disorders (DRG 124) 1.3
• Cardiac arrhythmia .90
• Heart failure .84
• Chest pain .83
• Based on total cardiac inpatient cases with
  overall average reimbursement 6,310. Number of
  procedures 10 or more.

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Market Planning
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Service Line Market Planning
Review previous years achievements
SL and Marketing assess marketing impact and
fine-tune plan
Complete research analysis
Top management begins strategic planning
Service lines complete marketing plans
Top management completes strategic plan
Board of Directors reviews and adopts strategic
plan
Service line directors complete their next year
operating budgets
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Service Line Marketing Plan Template

• Market Situation
• Measurable goals and objectives
• Target audiences
• Strategies
• Program development/enhancement
• Referral development
• Internal marketing
• Pricing
• Sales and Promotion
• Tracking and evaluation systems

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Integrating Physicians

• Physician Champion is crucial
• Show physicians value of following protocols
• Tie together quality/customer satisfaction/net
  income
• Provide real time and periodic progress reports
• Hold marketing education session(s)

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Tracking Results
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Tracking Results
Strategic Initiative Accountability Leader Priority Resource Requirements When it will be implemented Result
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Expense
Month 6 Month 7
Month 1
Month 4 Month 5
Month 8 Month 9
Month 10 Month 11
Month 12 Annual
Month 2 Month 3
Average cost per call 15.05 Calls per
Month/adjusted 245
290 320 320
320 340 380
380 380 310 380
380 4425 Investment
3,687 4,365
4,816 4,816 4,816 4,816
5,719 5,719 5,719 4,666
5,719 5,719 66,596
Revenue
250 Bed Facility
Down Stream Contribution
Case Study 361 per call
x 4425 annual
calls
1,597,425 x
0.33 Incremental adjuster
527,150
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Re-thinking ROI

• Traditional approach incremental net income
  (marginal profit) divided by incremental
  marketing dollars limited to tracking a discrete
  service line return
• Observation 1 Marketing is an essential
  operating expense, as well as an investment

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Re-thinking ROI (cont)

• Observation 2 Health care as a rule is
  impatient for results (6 to 18 months) other
  industries take a longer perspective (e.g.
  telecommunications companies and banks look at
  five year returns)

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Re-thinking ROI

• Observation 3 There is no one overall formula
  for determining total ROI
• True ROI measurement can only be done by having a
  data repository
• Points of access provide a model for pursuing ROI
  measurement
• ROI vs. ROE (Returns on Efforts)

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Health Systems
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Service Line Marketing Across Health Systems

• Best for information sharing, but not always
  practical for local clinical delivery
  (particularly where the system is geographically
  disparate)
• Case in Point Southeastern Health System tries
  to standardize cardiovascular services across the
  system

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Putting It All Together Right Ingredients
Success

• Commitment of Leadership
• The right people with the right skills
• Clearly defined roles
• Robust market analysis
• Track progress with marketing plan
• Physician collaboration and buy-in
• Straightforward results reporting