A rapidly evolving marketplace is giving traditional hospitals and health systems a run for their money.
Today's healthcare consumer has more choices than ever before, from neighborhood urgent care clinics to Teledoc to mail-order pharmacies. For instance, more than four out of five consumers are willing to receive their care at retail clinics, and the number who actually did rose from 9% in 2013 to 24% in 2017, according to the McKinsey consulting firm.
The ability to shop for care as easily as they browse online house listings even has its own name, “healthcare consumerism," the belief that patients should make their own active, informed purchasing decisions.
Unfortunately, most hospitals and health systems have yet to embrace consumerism in a meaningful way. “Infrastructure for collecting, analyzing, and executing on consumer insights and analysis is low to non-existent for most organizations," according to the 2018 State of Consumerism in Healthcare survey of industry executives by the consulting firm Kaufman Hall. Findings include:
• 64% consider the use of digital tools for engaging consumers to be a high priority, but only 23% report having strong capabilities in that area.
• The vast majority use traditional customer surveys to gain consumer insights, but only 32% have adopted customer segmentation, one of the most basic techniques in digital consumer experience strategy.
• Approximately one quarter lack “a fully operational data and analytics team that performs statistical modeling."
• Only 15% have consumer research specialists on staff.
"Healthcare providers have been slow to adapt because they've never had to be consumer focused in the past," said Kaufman Senior VP Dan Clarin, in a public statement announcing the report. "This shift requires a new mindset and new way of thinking that go beyond traditional approaches."
Certainly, providing quality customer service improves profitability. Average net margins for hospitals with “excellent" HCAHPS patient ratings are more than two-and-half times higher (4.7% vs 1.8%) than hospitals with "low ratings," according to The Value of Patient Experience, a 2016 hospital industry report by the auditing firm Deloitte.
Failing to do so makes traditional hospital systems vulnerable, not only to competing systems, but to newer entrants who have long embraced consumerism in their own industries. Major players include retail giants Walmart, Kroger, CVS and Rite Aid, who have built their corporate empires on a foundation of consumer analytics and customer service. The proposed merger of CVS Health and Aetna promises to “reinvent healthcare's front door using interventions in stores and homes, digital tools, and advanced analytics," according to Kaufman.
CRM – Tool of Choice
One of the most persistent barriers to consumerism is that people still find it “difficult to navigate the complex U.S. health care system," according to Rice University's Baker Institute for Public Policy. Among the institutions surveyed by Kaufman, only:
• 14% have made video visits widely available.
• 17% have made e-visits widely available.
• 23% allow customers to estimate their out-of-pocket costs online.
• Under 50% have or are piloting customer-friendly billing statements.
A customer relationship management (CRM) system can help dismantle that barrier. It eases the customer's entry into a health system and helps to retain loyalty by smoothing the flow of information between provider and patient, allowing both parties to make more informed care choices.
This is because “healthcare CRM" technologies go beyond the standard contact-management functions that serve other industries, such as following up leads and closing sales. CRM solutions are dedicated to serving the entire service chain, from making the first appointment to post-discharge follow-ups.
The ability to find, target, and influence people for better health is crucial to good customer service and public relations. Using CRM to analyze a database of patients can identify those with the propensity to develop a certain medical condition. Now you can send them preventive care suggestions and opportunities, reminders to comply with home-care instructions, or periodically follow-up with customers who suffer from chronic conditions.
On a positive note, in selected areas Kaufmann's 2018 survey results have seen significant improvement over 2017. Remember how only 23% of hospitals have strong digital capabilities? That's still a strong improvement from the 14% in last year's survey.
Moreover, an estimated 149 hospitals — 2.7% of all hospitals nationwide — will purchase CRM software for the first time this year, according to the Healthcare Information and Management Systems Society (HIMSS).
It's clear that the hospital industry recognizes the need to modernize the customer experience. What it needs to put that recognition into play is a cadre of forward-thinking marketing professionals who can spearhead new digital systems into a tradition-bound corporate culture.
Otherwise, in a few years, legacy health systems will be playing catch-up with lean, digitally savvy competitors poaching their customers and taking over market share. Don't be one of them.
Want more insight into what a healthcare CRM is and can do? Download our guide.