Vertical Focus: Healthcare Organizations Turn to CRM to Cure Their Ailing Customer Strategies

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Catering to the needs of potentially hundreds of thousands of patients undergoing everything from acupuncture to CAT scans is a headache two aspirin won't cure. As a result, the healthcare industry is increasingly turning to the same sorts of CRM strategies found in such industries as consumer packaged goods. Although healthcare providers offer a different sort of product than the typical B2C firm, there is a convergence in business strategy with its product-focused counterparts. For instance, looser restrictions on prescription drug advertising have made the business of attracting and retaining customers curiously similar to consultative sales industries like automotive sales or real estate. Still, "CRM is relatively new in healthcare," says Lori Mouton, director of marketing at Port Huron Hospital, in Port Huron, MI. Yet the industry feels the same pressure as other markets do to do more with less. "Marketing departments aren't necessarily increasing their budgets as what's being spent on healthcare is increasing, so we need to find a better way to allocate the resources we do have to meet objectives," Mouton says. Mouton solved this problem by working with Customer Potential Management to better segment the hospital's customer base and to provide more carefully targeted messages, while pulling back on mass-media spending. The unique situation Mouton and her peers face is that advances in medicine, access to healthcare, and greater longevity all add up to a wide variety of potential customer interactions. In addition, "there is an emotional element as well as a business transaction element," says Robert Booz, META Group vice president of health industry research. "The individual may be looking at a diagnosis where there is a great concern, or may be looking at posttreatment services that are as yet undefined." Healthcare networks and managed care organizations also face significant challenges in supporting what can be a highly diverse and geographically dispersed roster of providers, from brain surgeons to physical therapists. Some are employees of the network, while others are independent providers, and catering to all of them can become a daunting task. Eastern Maine Healthcare Systems (EMHS), in Brewer, ME, implemented FootPrints from UniPress Software in its internal call center to improve first-call resolution and cut down on support incidents. Fred Sherwood, helpdesk manager at EMHS, says that rapid and accurate responses require that customer support systems be closely tied to the technology that drives the clinical services. "Ninety percent of our customers are clinicians, and we needed a logging and tracking system to sit side-by-side with [the clinical system], because the clinical systems are our mission-critical application." Adding to the challenge is that shifts in healthcare delivery are causing consumers to demand greater input and in some cases getting a wider range of choices than the simple "HMO or PPO?" heads-or-tails decision of a decade ago. "Employers are empowering their employees to take more control over their healthcare spending decisions. We're seeing more and more dollars get put into flexible spending accounts, and they have the ability and responsibility for predicting where they will spend money over the next year," says Victor Otley, CEO of Intellicare, a customer care outsourcer specializing in the healthcare market. The broadening range of options puts healthcare administrators into a more consultative role than ever before as they help the end customer puzzle through choices to find the most efficient and effective allocation of healthcare dollars for their family's situation. The biggest current challenges to effective communication in healthcare are the terms of HIPAA and related privacy regulations, because HIPAA is just the tip of the iceberg. "The privacy and security of HIPAA is a baseline," Booz says. "Individual state requirements are greater than or equal to HIPAA, so the organizations have to know what the individual's state's requirements are, and this creates call center issues because they may have to handle [situations] differently depending on the [caller's] state of origin." As much as healthcare providers act like any other firm, some customer management tasks are largely irrelevant at the individual customer level. For instance, HMO relationships at the corporate level all but ensure a mass exodus of customers if a contract is terminated. "Winback [of a single patient] is virtually impossible if I'm a provider and a big employer [switches to] an HMO patients are not in network with," Otley says. Booz says that the healthcare outfits that will be CRM winners will map their range of services across the lifetime of their constituents: Healthcare providers need "information that is both deep and broad--deep in the sense of medical treatments, and broad in the sense of products over time."
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