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Hospital/health system marketing ROI was a hot topic at the recent SHMSD conference in Washington. Something of interest to all us healthcare marketers in this age of C-Suite accountability. I heard some presenters relay case histories, proudly quoting successful “ROI” stats, relative to increased preference ratings, website activity, call center volume, referrals, event participation, patient visits, and calculated column inch PR coverage.  All admirable, measurable results stemming from effective healthcare marketing efforts.

But there is a contrasting point of view that these are not true ROI metrics. That the correct definition of ROI must involve a revenue return connected to the specific healthcare marketing effort. That anything less undermines healthcare marketing credibility. Presenters from M.D. Anderson Cancer Center and Strategic Marketing Concepts offered the following ROI formula:

            ROI = [(Net Revenue - Marketing Expense)/Marketing Expense] x 100

Don’t fret - it’s not too tricky to fill in those blanks. You just need to know the following:

- Revenue collected from volumes driven by the marketing effort (adjusted for ”would have gotten anyway” volume)

- Factor for “cost of services provided” (direct variable costs which Finance must provide)

- Cost of marketing efforts

Ok, before I lose you in accounting jargon, let’s get back to the issue at hand. Which “ROI” definition is correct? My take is it depends on two factors: the available data and your audience.

If you’re substantiating your marketing budget to the CFO, obviously the textbook formula will speak her language.

If it’s a non-financial administrator you’re trying to dazzle, those other metrics mentioned above can be pretty impressive, and may actually be all you have if the necessary financial data isn’t available to calculate the textbook ROI. While in the World of Accounting, it may be more “correct” to give non-revenue based metrics an alternative term (i.e. Return on Expense), ”ROI” is the generally accepted, understood lingo. Hence, while I think it’s optimal to have and use the textbook ROI (and I do think the equation presented is something to strive for), I don’t think it’s a sin to use the term, “ROI”, for all of the above.  As marketers, we know the value of quick-read communication and should use it to our advantage.

I  think the key is to set agreed-upon, measurable goals prior to campaign start, diligently report back on returns and gear future strategy based on returns.

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That was the roundtable discussion I took part in at the SHSMSD conference last week. Where I found myself somewhat alone in my opinion that you should usually go for it with the “best” quality outcome competitive claim you can. “Best” was not a word some of my colleagues were comfortable with…”We don’t like to say ‘best’, because you never know if your rating will change next year”…”We prefer to say we’re in the top x% rather than ‘best’ or ‘better’… “We don’t want to be too competitive.”

With all due respect, I say how can you afford not to? It’s too competitive out there and advertising is too expensive not to make the most competitive claim you can. The relentless pursuit of the strongest, most compelling point of differentiation is a Brogan commandment. If you have a stellar accolade, be it U.S. News & World Report, HealthGrades, Solucient, Magnet, or maybe it’s a local “Top Docs” award, I say shout it as loud as you can WHILE you can.

Granted, there is undoubtedly consumer confusion regarding the myriad of awards in the healthcare marketplace. “What’s a Baldridge Award?” “Top 100 out of what?” “Of the last 3 hospital billboards I just saw, I wonder which award they’re touting is most important?” As healthcare marketing experts, that’s the kind of thing we need to advocate for. We have to help our clients or healthcare organizations simplify the message down to its very core. It’s our job to translate the benefit of the award in a way that makes consumers take notice.

In example, one of our clients, The Christ Hospital, has received the U. S. News & World Report’s Top 50 Best Hospital ranking for Heart & Heart Surgery many years in a row. More compelling, we felt, was the fact that they were 4th in mortality in the country for this category. The resulting ads we developed translated into the striking consumer benefit: best survival at The Christ Hospital, even in comparison to national leaders (which yes, we named).

Which brings us to the topic of name brands, like the Cleveland Clinic, Mayo Clinic and Johns Hopkins referenced in the above ad. Taking the “higher road” may be an appropriate strategy for these national leaders who can rely on their longstanding reputations as academic, research and treatment innovators. But the large majority of hospitals and health systems simply don’t have this brand luxury. When a unique quality outcome award is achieved, I say play your cards well and use it to your best advantage.

By the way, The Christ Hospital ratings did change slightly this year. No biggie. We simply tailored the ad approach accordingly, still using the strongest claim possible.

We all know that transparency of quality indicators and pricing in healthcare is the trend. Consumers can access a plethora of resources like HospitalCompare.com to research outcomes, mortality, volume, pricing, etc. But do they? A couple of my roundtable colleagues testified that in recent focus groups they had conducted, not a single participant had actually used these resources to check hospital ratings. At another conference session, a presenter quoted that 20% of his marketplace was actively comparative shopping for hospital services. This is anecdotal feedback and consumers will definitely get more in the groove of using these tools as they gain popularity and as we, as consumers, must shoulder more and more of our healthcare costs.So in the meantime, don’t we have an opportunity (or you might even say, responsibility) to educate our target audiences on where our hospitals are excelling? I think so. And I also believe in playing your absolute “best” cards — never send a boy to do a man’s job!

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