The Silly Question of RoI in Healthcare Marketing

The other day I was with Dr. Jadhav who heads the Marketing function at the well known Narayan Hrudayalaya in Bangalore. Dr. Jadhav was keen to use radio for his hospital’s communication needs and I was hoping to persuade him to advertise with Fever 104, the radio station owned by The Hindustan Times, my current employers. Narayan Hrudayalaya, which is a well-known cardiac hospital thanks to the famous Dr. Devi Shetty and his pioneering initiatives, has recently started a Cancer Centre as well as a Multi Speciality hospital and wanted to promote these. The aim of the communication was to tell the citizens of Bangalore about these services available at Narayan Hrudayalaya and to drive ‘footfalls’.

While I discussed the plans with Dr. Jadhav, I could not help but notice his concern about the RoI on his marketing spends. Dr. Jadhav was very clear that if he spent Rs. 100, he needed 3 times the  sum in revenue, which could be directly attributed to this activity. I could easily relate to this because this is exactly the kind of  expectations the management teams had of me, when I headed the Marketing function at Max Healthcare and Artemis Health Institute.

I wish calculating RoI on healthcare spends was this easy. While there are many websites, which help one calculate RoI on marketing spends using complex formulae and spreadsheets involving the lifetime value of a customer, the cost of capital and what have you, I believe quite often the best way forward is a subjective gut feel and patience.

Measuring the success of a healthcare marketing campaign by merely counting the number of queries/walk ins generated in the hospital OPD is a great folly. The hospital business is unlike any other business and one must remember that exciting marketing communication alone will not lead to people walking in to check out the services of the hospital. This can happen for a new restaurant or a movie theatre,  but for someone to visit a hospital he must have a pressing need.

Tactical communication involving discounts, freebies and the like should be handled with care. I am not sure I would prefer to go to hospital for cardiac surgery because there is a discount being offered on the surgery, or I would like to go under the knife at a particular time just because the hospital is offering a deal. Come to think of it, I would be downright suspicious of the hospital if it tries to hustle me into a medical procedure by making a commercial offer.

Marketing spends in a hospital must be looked upon as an investment in the hospital brand and the values it stands for. The customers should be informed about the services of the hospital, the experience and training of its doctors, the robustness of its systems and processes and above all the promise of the experience the hospital hopes to deliver to its customers. It can highlight its ease of access, competitive pricing vis-a-vis other hospitals and superior services.  The hospital must showcase medical excellence, send out stories of success against great odds and constantly remind its customers what it truly stands for. It needs to communicate all or some of these over time before it should even attempt to measure the RoI.

A hospital’s brand equity is built over many years and much as hospital marketers would like to hurry this up, there are just no shortcuts. A hospital must set aside a small sum of money (7% of sales in the first years tapering to 2-3% in later years) year on year to spend on connecting with its patients and the local communities it hopes to serve. It should diligently spend this money informing, educating and reinforcing its brand values.

A few years later, the hospital will find itself buzzing with patients and no one would really be interested in the RoI on marketing spends.

Should Healthcare be free in India?

AIIMSYesterday morning I was billeted in a training session on Edward de Bono’s Six Thinking Hats and the power of parallel thinking. Out of the blue the trainer  asked the group to discuss the topic ‘Should Healthcare be free in India? The group that discussed this had well educated professional managers and senior executives. However none of them had a background in healthcare services per se.

Many people in this group felt that healthcare services should indeed be free in the country, pretty much like roads. Those with a a legal view supported this argument by pointing out that our constitution guarantees the right to life as a fundamental right and healthcare services can not be divorced from the right to life. A gentleman in the group gave the example of NHS in the UK and said that inspite of problems, it works. Many felt that in the face abject poverty in many parts of the country, it is only right that people have access to good quality healthcare at the expense of the government.     Continue reading

Healthcare for Those who can not Afford it.

the-poor-in-india

Turning away a fellow human being from the doors of a hospital when he is ill and unable to pay the bills appears to be wrong. However, if one was to dispassionately examine the situation, setting up and running large hospitals require huge amounts of capital, which has to be recovered from those who use the services of the hospital. If the hospitals were not to charge for their services from those who cannot afford to pay, they will soon go belly up and that surely does not help anyone.

So what does one do?   Continue reading