CUSTOMER RELATIONSHIP MANAGEMENT IN HEALTHCARE Lindsey P. Jarrell, FACHE Consumerism is playing an increasingly important role in healthcare, one that hospitals need to address in order to deliver the level of service that patients are starting to expect. In fact, according to a 2009 survey of healthcare consumers by the Deloitte Center for Health Solutions, consumerism is such a powerful force in healthcare that it is a defining characteristic between its past and its future that will impact every stakeholder s value proposition and business models. Consumerism is not a fad; it is a trend of enormous significance. 1 Today s consumers are highly attuned to the level of service in healthcare and their attitudes and behavior reflect this. Roughly one in four has switched or has considered switching hospitals, clinics, or doctors because of a negative customer service experience. 2 Slightly more than half of customers report that they choose hospitals based on whether they believe employees understand their needs. 3 Consumers have many choices when selecting their healthcare providers and they are beginning to exercise their options. Almost one-third report comparing doctors before choosing one and 15 percent compared hospitals. 4 Unfortunately, healthcare consumers believe the system is performing poorly: 76% percent grade the system as C or below. 5 Customer relationship management (CRM) is an approach used in many industries that focuses on addressing the unique needs of customers to increase value for both the customers and the organization. 6 CRM software is currently used in only about 15 percent of hospitals, but it is a growing trend. 7 It can help streamline operations to handle the multi-headed juggernaut of attempting to compete for lucrative customers, control costs, improve profitability, and foster a customer-focused cultural climate.
Today s Healthcare Consumer A growing number of consumers want to be actively engaged in their health. They compare doctors, hospitals, medications, devices, and health plans; explore alternatives to conventional approaches; and spend money to achieve their health goals. 8 They want to control their health information and prefer providers who use Internet-based tools to augment care. The 2009 Deloitte survey showed that 57 percent want a secure Internet site that would enable them to access their medical records, schedule office visits, refill prescriptions and pay medical bills. Forty-two percent of health care consumers want access to an online personal health record connected to their doctor s office, one in five would switch physicians to obtain such access, and consumers are less concerned about privacy and security issues than in the past,. 9,10 Many (62 percent) believe that hospitals vary with respect to quality. Because they are increasingly sensitive to errors, poor service and lack of useful tools that would enable them to navigate the system more effectively, they are receptive to innovations that offer greater value, better service, higher quality and lower costs. What s more, they embrace innovations that enhance convenience, personalization and control of their personal health information. Consumers, especially those who are younger, are willing to try new service and change providers in order to obtain better value. They are highly receptive to technology that eliminates redundant paperwork and unnecessary tests and saves time and money. 11 Why CRM It s not surprising that consumers are often dissatisfied with their healthcare experience. Today s healthcare environment is fragmented and complex, with numerous entities controlling access to information that exists, yet is inaccessible to both providers and patients. A lack of integration and workflow impedes the ability to deliver complete, accurate patient information, which has a negative
impact on patient satisfaction and quality of care. In seeking better tools to manage patients across the continuum of care, healthcare providers are turning to CRM software because it offers several components to address these issues. It provides integrated business systems that serve the medical staff, the administrative staff, and hospital stakeholders while also directly serving customers, giving them easy access to their healthcare history and on-demand knowledge of potential remedies. Effective CRM systems are starting to integrate personal health records with the hospital s data to provide a system for managing care-related activities, costs and benefits, and enabling patients to have better online access to enhance the management of their healthcare. The benefits of this approach include: The ability to analyze the performance of routine processes over time (such as admissions, discharges, transfers and referrals) in order to eliminate unnecessary steps and increase patient satisfaction. 12 Developing customized workflows to automate care coordination activities between provider organizations (e.g. physician office, hospital and home health) which can lead to improved patient outcomes, increased operational efficiency and reduced costs. 13 Proactively managing chronically ill patients (e.g., diabetes and congestive heart failure) to target them with communications about educational offerings and remind them of ways to manage their illness. 14 The ability to improve care coordination and reduce the risk of patient readmission. Reducing costs by consolidating systems and pooling resources to obtain economies of scale, improving utilization of appropriate healthcare resources and understanding the cost of treatments to drive business planning
Preventing and mitigating medical errors by integrating CRM data with medical history and clinical data. 15 Generating marketing campaigns targeted at specific patient types by combining a knowledge base with scientific analytics and feedback mechanisms. 16 With the advent of electronic medical records and the infusion of federal stimulus money that is helping to drive the widespread adoption of technology, CRM software may well be the next logical step in the increasing reliance and utilization of IT in healthcare. CRM Components for Healthcare Companies such as Siebel Systems, Salesforce, HealthForce and SalesBoom offer CRM solutions that are tailored to the needs of large and small providers. These systems often include the following components: Integrated Data In many industries, the majority of revenue comes from existing customers and healthcare is no different: about 80 percent of annual revenue comes from patients who have previously used the system. 17 Integrating enterprise-wide data is therefore a key component to improving customer service. An integrated database allows hospitals to collect data, analyze individual needs and preferences, develop relevant messages based on these needs and preferences and deliver communication through preferred channels (e.g., text messages, emails and phone calls). It requires an integrated combination of data and application programs to support analysis, opportunity identification, data mining and communications management. 18 Such a system is equipped, for example, to determine which patients are at greatest risk for disease or complications, allowing the hospital to provide appropriate interventions and communications at the right time. It can also help track and improve other
processes, such as check-in procedures. The result is a more personalized relationship between providers and patients that increases patient satisfaction. Customer Care and Recovery The trend toward consumerism in healthcare means that patients expect to be treated as customers. One in four patients say poor experiences at hospitals or clinics have caused them to use or think about using walk-in centers as an alternative. 19 In its 2008 Hospital Pulse Report, Press Ganey found that the larger the hospital, the lower the overall patient satisfaction rate. 20 Coupled with the fact that the majority of hospital revenue is from repeat business, this means that hospitals need to find ways of increasing customer satisfaction including rectifying mistakes - so that revenue is not lost. CRM software solutions can facilitate the collection of patient-related information from a consumer perspective, facilitate complaint management by allowing hospitals to capture, review, approve and access information about solutions to existing and past problems, and collect feedback data that can be used to improve operations. Feedback also helps mitigates risk in an environment in which government agencies are continually monitoring hospital performance. 21 Predictive Modeling CRM software can allow hospitals to predict patients who are at risk for developing certain conditions and identify those already diagnosed who are likely to develop complications, creating an opportunity for preventive interventions instead of more expensive treatments that may otherwise be required for acute episodes or chronic disease. 22 For example, predictive modeling can take into account co-morbidity, severity, frequency, physician and specialty data to predict the likelihood of a patient with diabetes developing heart disease or the chance of a patient with hypertension developing glaucoma. This translates to earlier disease discovery, better management, improved intervention and more relevant communications. 23
Marketing CRM-driven marketing can allow hospitals to deliver the right message to the right person at the right time. A comprehensive CRM database and analytical software can predict the likelihood of patients to require specific preventive interventions or develop certain health conditions. By leveraging CRM data, hospitals can implement customer-specific outreach to educate both diagnosed and undiagnosed patients. For example, one hospital implemented a campaign targeted at diabetes patients. This involved mailings that included offers for free glucose screening and nutrition classes, as well as discounted diabetes and cholesterol screenings. The campaign resulted in incremental patients in three categories: patients with a first-ever diabetes diagnosis, patients who used services who had been undiagnosed, and patients who used services who had been previously diagnosed. 24 CRM software is complimentary to both revenue cycle applications and electronic medical records within physicians offices and hospitals. One has only to think of the type and frequency of e-mails from retailers (e.g. hotel chains announcing special deals at exotic locations) that are carefully placed marketing campaigns based on a specific customer s previous buying experience and profile. The power of using CRM lies in combining data collection, information management and market targeting vehicles to creating a proactive marketing approach that can increase the customer base. 25 CRM Making a Difference CRM has been successfully used to help hospitals capitalize on their data to increase patient satisfaction and boost earnings. Today, many hospitals are demonstrating a substantial ROI from implementing a CRM program. Below are a few examples of CRM at work:
Children s Hospital and Research Center at Oakland faced declining referrals and revenue stream, incomplete process follow-through, and decreased patient satisfaction. Using a contact center CRM strategy, the hospital saw a 22 percent increase in overall referrals and a 50 percent improvement in both patient and referring physician satisfaction levels. 26 A group of six Florida hospitals used CRM tools to launch a direct mail campaign that generated $1.9 million in new revenue in three months. 27 CRC Health required a platform to manage patient intake, track Web entities, and streamline operations to increase revenue. A CRM system enabled the company s Web-generated revenue to jump from 4 percent to 26 percent. The company can now tie revenue to referral performance, boosting its growth potential. A tool to track web marketing effectiveness indicates to the dollar what is performing and what is not and the system even provides patients with available beds faster. As a result, CRC Health can serve a larger population. 28 Cedars-Sinai Medical Center wanted to improve low call-to-appointment conversion rates and patient satisfaction. The hospital designed a comprehensive contact center-based CRM strategy that improved appointment conversion rates from 22 percent to 48 percent and patient satisfaction by 42 percent over the first year. During that time, more than $3 million was generated in incremental revenue. 29 Challenges, Tips and Insights Implementing CRM software can be challenging. It needs to incorporate a variety of security safeguards including patient confidentiality and privacy issues as well as HIPAA compliance. A CRM systems can be costly and timeconsuming to get up and running. Naysayers may point to past efforts of hospitals to implement CRM systems that have failed. But the landscape of healthcare is changing, and CRM can be a valuable tool to help hospitals
adapt to the trend toward consumerism and transparency. IT capabilities and technological advances have paved the way for more sophisticated secondgeneration software-as-a-service platforms and CRM has become both more affordable and more user-friendly. 30 As with any widespread organizational change, enterprise-wide system compliance can be difficult to achieve. Internal resistance can be significant from top executives and administrators at the outset and from medical staff once implementation begins and the system is in place. It is important to develop strategies to assist team members at all levels in the organization in adopting a new CRM program. When considering the implementation of a CRM program, hospitals should keep in mind that: Converting from a patient orientation to a customer orientation requires a cultural re-orientation. CRM is not a campaign or a one-time event, but rather an all-out approach to dealing with customers. Modifications in the language used in all customer encounters even billing - can have a profound impact on the perceived quality of services. Quality is defined by the customer, not the provider. Conclusion Information is the fuel on which hospitals run and they must harness it to both continually improve performance and measure their record against competitors. During the next decade, the healthcare environment is likely to see an emphasis on improving, measuring, and reporting the quality and safety of care, link provider reimbursement to care performance, and demand greater levels of patient service. 31 CRM technology gives hospitals the tools they need to thrive in today s increasingly consumer-oriented healthcare market, while improving outcomes and reducing costs. While its implementation poses a
number of challenges, installing CRM programs is an undertaking worth pursuing. References 1 Deloitte Center for Health Solutions. 2009 Survey of health care consumers. http://www.deloitte.com/view/en_us/us/industries/us-federal-government/center-for-healthsolutions/60ea5a1264001210vgnvcm100000ba42f00arcrd.htm. Accessed April 13, 2010 2 Datamonitor. Addressing the challenges of consumer-driven healthcare. Published January 26, 2007. 3 Datamonitor. ibid. 4 Deloitte Center for Health Solutions. ibid. 5 Deloitte Center for Health Solutions. 2010 U.S. healthcare consumerism survey. http://www.deloitte.com/view/en_us/us/insights/centers/center-for-health-solutions/consumerism/2010- survey-healthconsumers/index.htm?id=usgoogle%20consumerism%20_hc_510&gclid=co6premo3qecfynd5qod 9DjKIw Accessed May 17, 2010. 6 Glaser J, Foley, T. The future of healthcare IT. Healthcare Financial Management. November 2008. 7 Higgins, JK. Rx for hospitals: a big dose of CRM. CRM Buyer. http://www.crmbuyer.com/story/healthcare/68758.html?wlc=1274277431. Published November 20, 2009. Accessed April 8, 2010. 8 Deloitte Center for Health Solutions. 2009 Survey of health care consumers. ibid. 9 Deloitte Center for Health Solutions. 2009 Survey of health care consumers. ibid. 10 Deloitte Center for Health Solutions. 2010 U.S. healthcare consumerism survey. ibid. 11 Deloitte Center for Health Solutions. 2009 Survey of health care consumers. ibid. 12 Smolke P, Virmani S. Why customer relationship management in healthcare? Presented at: Healthcare Information and Management Systems Society annual conference; February 24, 2008; Orlando, FL. http://www.mshug.org/docs/techforumorlando2008/smolke_p_vimani_s_closing.pdf Accessed April 13, 2010. 13 Smolke P, Virmani S. ibid. 14 Smolke P, Virmani S. ibid. 15 Healthcare industry CRM software solutions. www.crm.forecast.com. http://www.crmforecast.com/healthcare.htm. Accessed April 13, 2010. 16 Higgins, JK. ibid. 17 Healthcare relationship management depends on tailored database. www.healthcareitnews.com. http://www.healthcareitnews.com/news/healthcare-relationship-management-depends-tailored-database. Published May 13, 2004. Accessed April 8, 2010. 18 Healthcare relationship management depends on tailored database. ibid. 19 Healthcare industry CRM software solutions. ibid. 20 McKay L. Healing the sick. www.destinationcrm.com. http://www.destinationcrm.com/articles/editorial/magazine-features/healing-the-sick-55461.aspx. Published August 1, 2009. Accessed April 7, 2010. 21 McKay L. ibid. 22 Schumacher S. Patient relationship management: streamlined approaches for defragmenting healthcare. Health Management Technology. June 2001; 22(6). 23 Healthcare relationship management depends on tailored database. ibid. 24 Hallick J. CRM saves lives. www.destinationcrm.com. http://www.destinationcrm.com/articles/web- Exclusives/Viewpoints/CRM-Saves-Lives-60149.aspx. Published January 25, 2010. Accessed April 7, 2010. 25 Higgins, JK. ibid. 26 Young T. Hospital CRM: unexplored frontier of revenue growth? Healthcare Financial Management. October 1, 2007. 27 Higgins, JK. ibid. 28 CRC health builds custom solutions on force.com to streamline intake process and increase webgenerated revenue. www.salesforce.com. http://www.salesforce.com/customers/healthcare/crchealth.jsp. Accessed May 18, 2010.
29 Young T. ibid. 30 Young T. ibid. 31 Glaser J, Foley, T. ibid.