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 stakeholders value proposition and business
models. Consumerism is not a fad; it is a trend of enormous significance.
1

Todays 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.



Todays 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 doctors
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. Whats 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
Its not surprising that consumers are often dissatisfied with their healthcare
experience. Todays 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 hospitals 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 customers 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:

Childrens 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 companys 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 time-
consuming 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 second-
generation 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 todays 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-health-
solutions/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-health-
consumers/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 web-
generated 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.