Referring physicians are arguably a hospital’s most important customers. They’re certainly profitable: One physician, on average, generates roughly $1.5 million in revenue from referrals, tests and procedures performed in hospitals, according to the 2007 Physician Inpatient/Outpatient Revenue Survey conducted by Merritt, Hawkins & Associates, an Irving, TX-based physician recruiting firm.
With that kind of money at stake, it’s no wonder that hospitals and health systems are dedicating more resources to marketing themselves to physicians. Increasingly sophisticated physician sales programs, charged with growing (or at least maintaining) referral levels, are springing up across the country. It’s a trend that will continue as hospitals struggle to grow volume in a mostly stagnant marketplace, predicts Roger W. Smith, PhD, vice president of human resources at the continental division of HCA. “We’re all used to thinking of patients as the customer, but the physician is an extremely important customer as well,” he says.
Whether you’re planning to start a physician sales program or want to make an existing program more effective, there’s no question that finding and hiring the right person to lead the program—and then giving them the organizational support they need—can be the difference between success and failure. The search
When HCA’s continental division started its physician sales program a little more than two years ago, the organization’s leaders—including Chief Executive Officer Jack O. Bovender Jr.—were all involved in the recruitment effort. That top-level buy-in is the reason for the success of the program at the 10-hospital division, Smith says. “If CEOs are regarding this position casually, I think its not going to work out very well for them.”
The search for a VP of physician sales was all about “networking, networking, networking,” says Smith. He asked vendors, physicians, CEOs and anyone else he could think of if they knew anyone who would be good for the job. He even attended a marketing conference in search of candidates, personally interviewing several on site. “If you want to attract a VP-level person, you better have someone of a similar rank talking with them,” he says. The hire
Physician relations consultant Kriss Barlow, principal of the Hudson, WI–based Barlow/McCarthy, says organizations should seek a leader who can manage external salespeople—because they “don’t beat to the same drum,” Barlow says—and serve internal customers with the kind of data and outcome information they need. The person must be someone who will “embrace the spreadsheet,” yet also understand the needs of both the physician and the hospital while straddling the two very different worlds of healthcare and sales.
You want “someone who is outgoing, dynamic and a customer-service leader,” Smith adds. “I always step back and ask myself, ‘If I’m going to send someone into a room of angry doctors, whom do I want to send in?’
Ultimately, HCA hired Mike Riley, an internal candidate, as vice president of physician sales. He was already familiar with the culture of the organization. And as “the quintessential diplomat,” he would work well with the CEOs of all 10 hospitals in the mini-network, as well as the division president. Friendly, genuine and trustworthy, he had all of the traits that the organization was looking for in a physician sales leader. The job
Once you’ve hired the right person, Barlow and Smith agree, you must set them up to succeed. For starters, they say, the person who runs the physician sales program should be a VP or director-level position aligned with business development or marketing with a straight line to the CEO.
“They need to have the eyes and ears of the CEO and the credibility of the CEO,” Barlow says. The physician sales leader must also have a certain amount of clout within the organization. Physicians, she warns, are keenly aware of who has political clout within organizations—and who doesn’t. —Gienna Shaw