Wednesday, July 28, 2010

The Re-Emergence of Centers of Excellence- Part 2

An interesting discussion started on LinkedIn in the American College of Healthcare Executives Group regarding my original blog on the Re-Emergence of Centers of Excellence. The questions as asked by Howard Gershon, Principal, New Heights Group, LLC., was how would I define a Center of Excellence? A fair question since I had not done that in the original post. My thanks also to L. Elizabeth Mullikin, FACHE, Executive Director, Neurosciences Institute at John Muir Health, Leon Harris, Administrative Resident, Providence Hospital and Roy Orr, FACHE, Consultant, Firethorne Interim Hospital Consulting for their contributions to the discussion.

I have seen healthcare organizations all over the board on the topic of Centers of Excellence. Here are the attributes that I consider to make up a Center of Excellence for any disease-state. The ones added by Elizabeth, Leon and Roy are an asterisk. These attributes are not necessarily in order of importance.

Board certified specialist and subspecialties in the disease-state
Current diagnostic and treatment technology
Standardized (where applicable) care plans
If surgical services are involved standardized surgical and medical device packs
Unique or innovative service not found in the service area*(Elizabeth)
Long-term sustainable business plan* (Roy)
Dedicated full-time CoE director or manager
Defined quality program
Center of Excellence P&L
SG&A costs below 23% of revenue
Center defined capital budget for acquisition of new technology, devices etc
Outcomes better than the national average
Active satisfaction measurement of physicians, payers and patients
Patient referrals from what would be considered outside of the normal hospital or health system service area
Fully developed patient disease-state educational materials (and that doesn't mean a pamphlet from an association or pharma)
Outcome case studies
Transparency dashboard which reports surgical and treatment outcomes, case mix index, mortality and morbidity data, financial indicators, satisfaction rates for physician, payer and patient, quality measures, market share, etc
Joint Commission CoE certification*(Leon)
Other third party external accreditation's if available for the disease-state
The disease-state is a core competency of the organization
Centers brand name and brand architecture is consistent with and fully integrated into the hospital or other providers brand plan.

Excellence means excellence. There is no half-way. If the organization is not committed to do it right, then it's just another program of the healthcare provider all dressed up with no place to go.

Michael is a fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association and can be reached at 815-293-1471 or

Monday, July 19, 2010

The Re-Emergence of Centers of Excellence

Are you ready?
Ready for the re-emergence of Centers of Excellence under healthcare reform?
Centers of Excellence for the longest time were really nothing more than someone in a hospital or a group of doctors telling everyone that they were a Center of Excellence (CoE) for Cardiology, or Oncology, or Neuroscience, or Women's Health to name a few of the more "popular" CoEs. With little objective data- outcomes in areas such as financial, quality, satisfaction etc, many healthcare institution simply said they were a CoE for a particular service line. A little paint here, new wallpaper there, designate an unused hospital floor or wing the area, maybe even generate some fundraising and donation opportunities to name it after someone of community note and presto, a Center of Excellence.

Okay, that was probably a little overboard for some organizations took CoEs seriously and did have objective financial and quality measures which they communicated the benefits of to Board, payers, physicians and community. They built a brand that was sustainable. But as with most things over time, the concept was short lived and unsustainable as practiced across the healthcare industry.

I digress a little.....

Foolish me, thinking that this kind of practice has declined. Recently some of the smaller for-profit companies in the specialty pharmacy industry are doing the very same thing and making the very same mistake the hospital industry made in creating CoEs. Just because you say you have a CoE, doesn't mean it is one. When physicians and nurses are not involved in creating the care protocols (and that means more than one nurse and two doctors), just because you say something doesn't necessarily make it so. When its driven by Sales, the nightmare is beginning. Delivering a medication on time is expected and not a single CoE measure.

Now the game has changed
Due to healthcare reform, I am predicting that Centers of Excellence will be making a big come back. Healthcare organizations going forward over time will be paid based on quality, not quantity. That means quantifiable quality and best practice medicine. Indicators yet to be developed that are standardized so that all hospitals or clinics stating that they have a CoE for any service line, disease state or treatment will have to meet. Your reimbursement will depend in it.

Marketing needs to be at that internal product development table for the reemergence of CoEs. Pick what you do best.

What to do
First and foremost, learn from your past mistakes. And please, please do not use "world class" in your communications. Hint - if you are not treating individuals from around the world, you are not world class. Few healthcare organizations can make that claim. And the majority of you out there are not the Mayo Clinic, Cleveland Clinic or the University of Chicago to name a few.

Develop those outcome indicators based on current research and best practice for a service line or treatment and other quality, financial and patient satisfaction indicators. Identify your target market segments and messaging about what you are doing for physicians, payers, patients and community. Talk in real terms not fuzzy you love use because we are a CoE.

One last point, make your marketing plan strategic first, tactical second, and sustainable thirdly for over a long period of time. Use traditional and online channels. And most importantly of all, bring value; for the healthcare consumer of the near future will be buying based on price and quality. The sooner you start demonstrating quality and price, the better off you will be.

Mike Krivich is a Fellow, American College of Healthcare Executives and a Professional Certified Marketer, American Marketing Association. He can be reached at or 815-293-1471.

Tuesday, July 13, 2010

Driving patient volumes and revenue via RN-based physician referral call center

Okay it is quiz time.

What is the fastest way to build brand awareness, drive patient volumes and revenues, reconnect with patients that haven't used your hospital in several years, build your physician practices and can be analyzed in financial terms to prove Return on Marketing Investment (ROMI)?

Hint- the answer is in the title.

That's right, physician referral brand building marketing activities via an RN-based call center.

Here's the premise and it's something that I have used successfully over the years to drive volume and revenue for all products lines. At the end-of-the-day, nothing happens in any way, shape or form in your healthcare organization without a physicians order. In the case of an ER utilization, the docs there already will be your surrogate for admissions, tests and follow-ups and for referral to physicians in the event an ER patient does not have one.

It is a classic push pull strategy.

Push the patients to your physicians, pull the physicians to your organization.

Inherent in the concept and activity is the process improvement you are undertaking internally to make your healthcare organization the easiest place in the known world for physicians to practice medicine.

For you see, with all the brand building marketing activity that goes on for a hospital or multi-hospital system, changes in market share are due more to physician admitting behavior than anything else. In longitudinal market research studies that I have participated in over too many years to tell, when you look at changes in the marketplace over time, competing hospitals market share only changes usually by one or two percentage points annually.

Sometimes the gain or loss is only for six months. It's the same one or two points among all competing facilities. Meaning that physicians are moving patients between competing hospitals. Patients don't move themselves, the physicians are. When all things are equal, the physician will tend to move to the hospital that makes it easier (i.e., efficient and effective) to practice medicine.

Also with your physician referral marketing, you need to run all community activities, wellness programs and events registration, speaker bureau opportunities and product-lines through your physician referral as well. It's all about capturing a patient name and getting them to your docs.

What follows now is an actual Return on Marketing Investment analysis that the CFO and members of the Finance department were involved in looking at an RN-based call center- physician referral, speakers bureau and event registration.

The method can be adapted to any campaign and provides you with the data fields and logical analysis you need. This has been heavily edited to hide the organization. The full report was quite large and contained an entire programmatic evaluation of the Physician Referral Call Center with recommendations for improvement to increase scope and capabilities. This portion is most applicable for today’s conversation.


An analysis was undertaken to look at the ROI of the Physician Referral Call Center. The analysis matched a database of call center name records for the period to financial records which had already been downloaded. The analysis produced the following results:

9,102 call records were matched with utilization and financial data.
9,102 calls resulted in a total of 9,121 encounters in the ER, Inpatient and Outpatient categories of service.

751 encounters were ER
177 returning encounters
573 first time encounters

1,105 encounters were Inpatient
530 returning encounters
699 first time encounters

7,267 were Outpatient
2,014 returning encounters
5,253 first time encounters

Total charges for all encounters equaled $22,522,649

Charges for new encounters all services totaled $16,085,198 or 71 percent of the total charges

Average charge per ER encounter $1,304

Average charge per Inpatient encounter $13,581

Average charge per Outpatient encounter $903

Gallup measures loyalty at 68 percent (would return for service) which means that for every 100 patients 32 would not return for care- therefore:
ED- 57 returning encounters captured that would not have returned
Inpatient – 170 returning encounters captured that would not have returned
Outpatient- 645 returning encounters captured that would not have returned

Incremental charges counted returning encounters not loyal
ER - $74,337
Inpatient- $2,308,851
Outpatient- $582,505
Subtotal charges counted: $2,965,693

Overall market share in primary and secondary service area is 14.53 percent. The number of first time encounters have utilized us above market presence is therefore:
ER 573 first time encounters, 83 not countered, 490 counted –
Inpatient – 699 first time encounters, 101 not counted, 598 counted
Outpatient – 5,253 first time encounters, 763 encounters not counted, 4,490 counted

Based on an overall market share of 14.5 percent the incremental charges counted for new encounters not because of market presence:
ER - $638,960
Inpatient – $8,121,438
Outpatient – $4,054,470
Total Charges counted: $12,814,868

Discount from gross charges for Medicare, Medicaid, Managed Care, Bad Debt and Charity Care @ 65% is $8,326,644

Net Revenue: $4,488,224

PRCC program costs: $233,410

Net contribution: $4,254,814
ROI 18.22:1

This is the one way that you can have an immediate and lasting impact in driving patient volumes and revenues. This is all about creating internal value and accountability. Here is value. Here is accountability.

Physician referral activities pay off in a big way.

I can be reached at 815-293-1471.

Tuesday, July 6, 2010

Don't forget about direct mail

Don't forget about direct mail

The other day I was going thru the mail and received a direct mail piece from a hospital system. Then the "news flash - film at 11" type of realization hit. It had been some time since I received any direct mail materials from any of the local healthcare providers. Truth be told, it has probably been a couple of years or more now that I remember receiving any healthcare related direct mail. And that is a mistake in my opinion.

If you have been in healthcare long enough, you can remember a time when besides newspaper ads, Sunday newspaper stuffer, billboard and radio campaigns, TV ads etc., that the majority of healthcare marketing was direct mail- health and wellness magazines, magnets, newsletters, postcards etc. Replaced today no doubt by facebook, YouTube, Twitter, LinkedIn, web sites, banner ads, emails and all other types of social media. Like lemmings rushing over the cliff, healthcare organizations fast abandon messaging distribution channels in favor of the new and more expedient methods of communicating. But is anybody listening, or should I say reading?

Not everyone clicks through on banner ads. Everyone is not on facebook. Not everyone has an Iphone. And guess what, people still read their mail and newspapers.

Are you missing an opportunity via a little used, or should I really say, "out-of-fashion" communication and distribution channel to get your brand messages in the marketplace?

An interesting question.

My opinion is yes, direct mail is still important and can strengthen your brand messaging in the market.

Your brand message needs to be communicated in multiple ways, using multiple communication channels. That would include traditional and online. The healthcare industry tendency is to abandon one communication and distribution channel in favor of another. Many reasons can be sited for not using direct mail, long production times, printing and mailing costs, list acquisition etc.

But if you are the only provider out there in that communication channel, then what is the value to you of having your brand message in an uncluttered healthcare messaging space?

If you think that direct mail is old and passé, then why do Verizon, Kohl's and other retailers continue to spend organizational resources in that medium? It might not hurt for you to take a look at your own mail to see who still uses the technique. Learn from other industries. You may find that your marketing communications plan to carry your brand messaging is not as integrated and comprehensive as it needs to be.

So as we rush to embrace all the new technologies and methods of communicating that our competitors are using, don't abandon the traditional side of marketing brand messaging channels. To do so is a missed opportunity to build your brand and shame on you for missing an important brand building opportunity.

You can reach me at 815-293-1471.