Before You Make That Cut

Karen Minich-Pourshadi, for HealthLeaders Media , June 9, 2010
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The quick and simple application for this new insight: When diabetes patients come in to have their feet checked for circulation, they could be asked if they've had their annual heart exam. "So we're in the process of making these types of connections. If we didn't know about it, we won't know that a significant number of people are feeding our cardio line," explains Englert. However, if the facility looked at the diabetes center as a standalone operation, it would seemingly be a smaller portion of the business, a marginal profit annually. "When you analyze the ripple effect it has, it changes everything. We're still breaking these connections out," says Englert.

This outreach can extend to other areas that help to grow each of the existing services lines. For instance, Englert says that the health system has a low-performing ASC, but it's a patient touch point for another service area his hospital is watching, peripheral vascular disease. So, based on the data the hospital collected from using the strategic halo it set up screening clinics and is beginning to identify people who were unaware they may have a need for such services. In essence, instead of waiting to see if patients will come to Alle-Kiski for this treatment, it is identifying them early on and keeping these patients in its market—while providing better-quality service.

"It's so simple and it makes so much sense. Yet a lot of folks don't have the resources to dig into the data, and you need a database," Englert notes. During the admissions process if hospitals capture data such as primary care physician, whether the patient is new or how long he or she has been coming, and what the last treatments received were, the hospital can crunch the information and make the connections.

Marketing leaders can then take that information and develop a targeted marketing and communications program, using direct mail instead of general advertising.

"It took us about six months to get all the data, and the return-on-investment results aren't immediate, but we feel we'll see the results long-term," he says.

Similarly J. Alex Bacchetti, vice president of planning and marketing at Provena Mercy Medical Center in Aurora, IL, heard about strategic halo and saw it as an opportunity to grow service lines and create targeted marketing efforts. The 315-authorized-bed hospital based in the western Chicago suburb took five years of patient data and put it into a database to help with marketing efforts.

"Now when we want to promote a particular program and we pick a target audience, pick a list, and merge and purge and send out any number of direct mail pieces, it also allows us to track who comes to the event and when we refresh the database we can look and compare the new database against the last six months of patient data to see how it compares to who we mailed to," explains Bacchetti.

This type of analysis provides his team with the ability to discern whether the efforts are bringing in new revenue and if the communications efforts are producing results. For instance the hospital decided to do a women's heart screening event. It used the database to target the marketing efforts, resulting in 127 people attending the event. By targeting the correct demographic, Provena Mercy Medical Center was able to generate 64 inpatients and outpatient visits for $68,000 in revenue. From all 12,000 mailers, Provena Mercy Medical Center garnered 780 inpatient or outpatient visits for $1.3 million in revenue.

The event cost the marketing department approximately $30,000 to set up; however, Bacchetti says the resulting procedures covered five to ten times that cost, and it improved the hospital's presence in the community. Plus, Bacchetti says the initial cost for the database was 5% of the marketing budget and the maintenance is less than 5% of the budget annually.

"No one cuts themselves to success, but when you figure out which revenue stream to build by looking downstream and upstream, that's when you figure out if you are saving the right money," notes Sturm.

Just as the body is the sum of all its parts, so too is a hospital operation. Strategic halo helps finance leaders see the larger picture of how their service lines and patients interact with one another and, based on metrics, make decisions on where to grow and where to cut.

Karen Minich-Pourshadi is a Senior Editor with HealthLeaders Media.

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