In our recent The Future of the CMO report, we outline five opportunities for Chief Marketing Officers (and their teams) to pursue to survive, if not thrive, in the current environment. You might think the fifth, “Money still matters – Continue to pursue financial impact,” would be the most obvious. Of course, driving financial growth and showing real ROI would be a top priority for health system marketing leaders, right?
While it’s not surprising that this strategy is difficult – both to achieve and prove – what is surprising is how more and more CMOs are taking this off their priority list. And the reason for that is best summed up by the statement “We’re full.”
It is true that many hospitals and health systems are facing a backlog of patients. In fact, in our study, we cite the historic demand of healthcare from Baby Boomers entering their prime care years, combined with historic labor constraints, as creating a “pig through the snake” scenario, where systems can’t handle the volume of patients seeking care. This has led some C-suite leaders to question the value of marketing (“If we can’t even handle the patients we’re seeing now, why do we need marketing?”), and has contributed to the elimination of the CMO position itself at a number of systems.
So in many cases, there are more patients seeking care than there are slots to provide care. But as with all things, the picture is more complicated. Because in nearly every one of these situations, not ALL areas are full. A hospital being “full” at an overall level means some areas suffer from capacity constraints, while others may be underutilized. Some service lines are busy; others could use more volume. Some physicians are booked 10 months out; others have openings tomorrow.
And of course, from a financial perspective, not all patients have the same impact. A system is going to fare better financially with a better payor mix, and typically, the more commercially insured patients in the mix, the better the organization’s financial status. The focus on the right payor mix will become even more critical as Medicaid funding disappears and more patients move from the lower payor status of Medicaid to the worse payor status of “self-pay.” And finally, just because you are “full” in some areas today doesn’t mean all those slots will stay full as time moves on. How much volume is lost when circumstances prevent a patient from receiving care when scheduled?
So yes, you may be “full” overall. But are you full everywhere? Are you attracting the right payor mix everywhere? Are you doing anything to fill those inevitable gaps in the schedule that appear?
Here’s where the unstoppable force – an overcapacity situation – meets the immovable object – the need to grow. Many systems are losing money or have a shaky financial outlook. All three of these situations – a “full” system, a poor financial outlook, and a desire to grow – can be true at the same time.. If you’re in a system that considers itself “full,” yet wants to grow, but is losing money or worried about it – what is the strategy? Where will that growth come from? Maybe M&A will help. Otherwise, it will come organically, from bringing in more of the right patients, financially, at the right time. There are many ways to focus your marketing efforts on attracting new patients to specific service areas, to target those with better insurance, and to fill appointments that suddenly become open. It requires a strong data-driven approach, a smart segmentation strategy, and a firm understanding of the system’s needs and goals.
Don’t let “we’re full” pull you away from delivering what marketing is supposed to deliver: real, demonstrable financial growth to your organization.
BPD is a strategic business partner that helps deliver the future to healthcare’s leading brands. Our proprietary data platform and full-service media and creative capabilities allows us to deliver patient acquisition efforts that deliver 10-20x ROI and millions in service line contribution margin for health systems across the country. Email Chris Bevolo to learn more.
