Monday, February 6, 2012

Hospitals and Data mining

More reporting from Phil Galewitz.  Back in December he described how hospitals were using former drug reps to target physicians to get referrals for "profitable, well-insured patients".  The suggestion that doctors could and would prompt patients to get particular procedures at a particular facility at the whim of a sales rep is pretty grotesque, even to someone who has read a lot about health care finance.  But at least there is a possibility of responsibility, doctors after all do take an oath to do no harm.  What happens when hospitals cut them out and go straight to the patients?  And not just ad buys on TV, but specific procedures marketed directly to individuals:
[Provena St. Joseph Medical Center] is one of a growing number of hospitals using their patients' health and financial records to help pitch their most lucrative services, such as cancer, heart and orthopedic care. As part of these direct mail campaigns, they are also buying detailed information about local residents compiled by consumer marketing firms — everything from age, income and marital status to shopping habits and whether they have children or pets at home.
While hospitals may profit from offering cholesterol tests and mammograms, the big payoff is in what those screenings may lead to – additional tests and procedures, including surgery.
"It's all about downstream revenue," says Patrick Kane, senior vice president of marketing at Cape Cod Healthcare in Massachusetts who used such approaches at Wellmont Health System in Kingsport, Tenn. "The old adage in business is that it’s easier to sell an existing customer new services, rather than find a new customer."
One of the biggest pluses for hospital executives is that they can track a campaign's financial success by comparing the amount of services used by targeted consumers against those in a control group with the same demographic and economic characteristics, but who are not sent mailings.
When the Henry Ford Health System promoted mammograms last year in mailings to 30,000 women aged 40 or older, more than 5,700 responded -- 304 more than in the control group. The mailings generated $268,000 more in profit than the control group -- a return of more than four to one on the cost of the campaign, says Denise Beaudoin, vice president of customer engagement.
"Some doctors used to be leery about the effectiveness of these marketing campaigns, but not when we can show them data like this," she says.
It's nice to know that while we don't know much about whether one treatment works better than another, we have randomized controlled trials on the effectiveness of their marketing.  Great job folks!

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