CRM in Health Care Is Gaining Momentum
Current marketplace dynamics reveal a predominant and growing customer-service focus in technology adoption. Health care organizations must view customer service based on CRM and pursue strategies to enhance and maintain customer satisfaction. The rise of consumer-driven health care, as well as the increased consumer demand for accurate and timely issue resolution, has forced health care organizations to focus on front-office technologies to streamline processes and increase customer satisfaction. Many health care organizations are finding that old ways of doing business no longer foster strong customer relations.
CRM is more of a journey than a set of tools. CRM is a customer-focused business strategy designed to optimize profitability and customer satisfaction. To realize CRM success, health care organizations must foster behaviors and implement processes, applications, and technologies that support coordinated customer interactions throughout all communication channels. CRM offers health care organizations the opportunity to improve existing relationships and define new long-term customer relationships.
CRM transformation begins when a health care organization chooses to become more customer-centric and addresses IT requirements along with the change management (people and processes) necessary to transform the enterprise. Executing a CRM strategy requires long-term planning, synchronization with market dynamics, and resource commitments. To form the foundation for a dramatic shift in customer-interfacing behaviors, health care organizations must have integrated systems and share common customer-interaction channels. To produce true business transformation, health care organizations must ultimately succumb to the challenge of re-engineering their cultures, processes, and IT environments.
CRM technologies enable greater customer insight, increased customer access, more effective interactions, and integration throughout all customer channels and back-office enterprise functions. CRM is a business strategy organized around customer segments that fosters customer-satisfying behaviors and implements customer-centric processes.
The Three Key Business Processes of CRM
CRM comprises the following three major business processes:
- Sales, also known as technology-enabled sales (TES), refers to the application of technology to enable selling through all sales channels, including selling partners and the Web. Opportunity management systems (OMS) lay the framework for a TES application solution. An OMS is a combined business planning, forecasting, and account management system. It is the backbone of a multichannel TES system enabling B2B selling across field sales, inside sales, and external sales channels.
- Customer Service and Support is responsible for retaining and extending customer relationships once a product or service is sold. Customer service and support (CSS) applications are front-office systems with back-end links to support a customer-centric environment. These applications support and manage relationships with external customers (such as members and physicians) and internal end users. Functions within these applications include call tracking and escalation, configuration and workflow management, problem resolution, and knowledge bases.
- Marketing, also known as technology-enabled marketing (TEM), involves analyzing the marketing process and automating it for the customer relationship cycle (selection, acquisition, retention, and extension). TEM requires a proactive strategy for using information and IT in marketing efforts using data management, mining, analysis, and reporting tools.
The business processes that support CRM offer health care organizations the opportunity to enhance customer service and embrace one-to-one customer management. While the three business processes that support CRM are critical for all industries, they are applied in a unique way to health care. Most industries are product-driven and revolve around brand, price, and quality. They have a sales-driven model that deals with tangible products, and they have the ability to create demand. Product-driven industries rely on CRM to understand consumers and increase sales.
Health care, on the other hand, is uniquely service driven and requires health care organizations to understand consumer utilization or medical service needs and the associated costs. For health care organizations, CRM provides the opportunity to create relationships and involve the customer in more active patient care management. Health care organizations must understand how these business processes are defined within the context of health care and apply them to fit a service-driven industry.
Health Care Stakeholders
Another unique factor in health care is the different types of organizations and stakeholders. In the health care industry there are pharmaceutical companies, health care payer organizations, and care delivery organizations (which consist of hospitals, medical groups, and physicians). The stakeholders among the three types of organizations are members, patients, physicians, and consumers (potential members and/or potential patients). In addition, CRM adoption varies widely between pharmaceutical companies, health care payer organizations, and care delivery organizations (CDOs). This is due to budgetary issues, a lack of knowledge regarding CRM strategies, and many unproven vendor solutions in health care. Unlike product-driven industries (such as retail and manufacturing), where substantial benefits for CRM are being realized, health care continues to lag in CRM success.
Pharmaceutical Companies
Pharmaceutical companies must provide information and services to a wide range of stakeholders, including consumers, physicians, payers, and care delivery organizations.
Pharmaceutical companies are aggressively purchasing CRM solutions from large vendors that offer the full suite of products, including sales, marketing, and customer service capabilities. These products are proven in other industries and best fit the needs of pharmaceutical companies developing and selling a specific product. Pharmaceutical companies are planning a gradual migration to a more robust Internet-built set of CRM modules to drive down both IT and sales and marketing costs, while keeping in step with elevated client demands. A new generation of products for self-service and personalization, together with traditional sales, marketing, and service products, will make it possible for organizations to migrate from both homegrown systems and packaged applications with complex and outdated architectures.
The drug companies frustrate many prominent physicians. Our most frequent response from physicians regarding their pharmaceutical reputation is, When will you show up offering us unobtrusive tools that enhance the process of doctoring? The current list of large CRM pharmaceutical vendors is most focused on enabling sales representatives to manage samples, comply with Food and Drug Administration regulations, and understand physician prescription history and influence. They fail to provide the physician or patient with the crucial self-help capabilities needed for unassisted informed decision-making.
An effective CRM approach is critical to competitiveness as pharmaceutical vendors exploit new communication channels and management strategies. Managing and understanding data is the basis for forming relationships with all stakeholders. Pharmaceutical organizations are realizing that data obtained during the clinical trial process can be used for CRM. Technology can help lay the foundation for CRM by improving the accuracy of the data collection process, as well as the analysis and report preparation processes. Technology also organizes the information into more-easily accessed and manipulated data stores.
Sales
Pharmaceutical organizations are actively deploying sales applications to sell more to existing customers and extend the duration of customer relationships by providing products and services that are designed to meet specific customer needs. By enforcing product, pricing, and business rules, sales applications: take the complexity out of selling; assure that the right product configuration is selected and that only appropriate valid options can be used; and deliver correct pricing, quotes, proposals, and accurate orders on demand.
CSS
Customer service and support applications and contact center technologies are allowing pharmaceutical organizations to manage, synchronize, and coordinate service, support, and sales interactions across a broad range of communication channels. Web-based solutions for customer service are also allowing users self-service and assisted-service over the Internet. Applications and solutions in todays market are designed to leverage a companys existing investment in telephony and systems infrastructure, while enabling rapid deployment to the organizations contact center.
Marketing
Pharmaceutical organizations are taking advantage of marketing applications for customer analysis and marketing automation. They are using the software to analyze customer behavior patterns and insights, and implement those insights through personalization and outbound marketing. In addition, it is critical for pharmaceutical organizations to streamline event lead-generation and evaluation. Many pharmaceutical organizations are creating real, measurable sales opportunities. Event management solutions are being deployed to automate pre- and post-campaigns, as well as at-event lead capture, lead-value determination, and quick distribution of leads to sales.
Study results from clinical trials are being used to facilitate data mining and trends analysis to support ongoing marketing initiatives. Word-of-mouth marketing, facilitated by access to sponsor-provided chat rooms, can also be a result of providing a good experience for patients. Physicians who were active participants in clinical trials can be targeted to encourage prescription writing for key drugs.
Health Care Payer Organizations
Health care payer organizations (payers) interact with numerous stakeholders, including members, consumers/potential members, brokers, and care delivery organizations (hospitals, physicians, medical groups). Each entity requires a payer to create a CRM strategy to meet the unique needs of each stakeholder.
Payers are deploying niche solutions, including CSS applications and TES applications. TEM has not gained momentum because of a lack of proven solutions in health care and the lack of interest from payers due to other business and technology priorities. In addition, payers are taking a phased implementation approach to CRM and are avoiding the implementation of a suite of products that support all three business processes (CSS, TES, and TEM). The reasoning behind this phased approach is the lack of preparedness and resources to implement the full suite of CRM-related products, and there are no proven suite solutions in the health care market.
Managed care is a highly competitive market, and new technology has irrevocably changed the landscape in which enterprises compete for and retain customers. Health care payer organizations have discovered that applying todays technology and best practices ensures tomorrows customer base. No longer can payer organizations sit back and miss opportunities to attract members or expect unsatisfied members to continue to use the payer organizations services.
Sales
Unlike product-driven organizations, payers currently rely little on direct sales to individual consumers. Large employer groups select and monitor health plans and pay the premiums. Today, some employer groups are placing more responsibility on employees and allowing them to evaluate and select health plans individually. As sales models in health care evolve to a more direct sales focus, payers are increasingly turning to the Internet as a sales distribution channel. TES applications are being implemented to support the full sales process as well as Internet functionality, including quotations, underwriting, billing, enrollment, and workflow tools. TES applications are designed to streamline the internal and external sales process to increase revenue, market share, productivity, and agent and customer satisfaction, and to reduce costs.
Payers are also actively looking to opportunity management systems (OMS) to manage revenue-generating sales activities. Visibility is a must in any economy, and is even more important in a tough economy. Given this, every payer needs the ability to manage sales opportunities. OMS systems provide capabilities such as call scripting, account/contact management, event tracking, lead distribution, forecasting, and pipeline management.
CSS
To increase customer satisfaction and support self-service capabilities, payers are actively deploying CSS applications. CSS applications enable payers to track, manage, and report information in a timely, flexible, and even proactive manner. CSS is also able to automate front-office business processes, provide data/information flow integration among business functions, facilitate fast and flexible access to critical information, support business rules workflow, and support new communication channels.
Payers are also implementing contact center technologies such as email response management systems (ERMS), interactive voice response (IVR), Web call-through, collaboration, and text chat. Payers are prioritizing the adoption of these contact center technologies based on the context of their CRM strategies and on their degree of risk acceptance and how the technology might positively affect productivity, contribute to customer intimacy, or make an enterprise more proactive in addressing customer needs.
Marketing
Marketing techniques are being applied to medical management, whereby payers use technology to support, profile, and predict utilization and cost with the goal of directing members to the right intervention and thereby improving outcomes. The key is to understand both the clinical and psychosocial characteristics on patients. TEM, especially via the Internet, is critical in the development of collaborative medical management.
Care Delivery Organizations
Many care delivery organizations (CDOs) realize that the C in CRM does not stand for just customer or consumer. There are multiple stakeholders, and each requires the creation of unique CRM strategies and solutions. The key CDO stakeholders include: patients, health care payer organizations, pharmaceutical companies, and consumers/potential patients.
Providers are lagging behind in implementing CRM because of an unclear understanding of how CRM can be related to providing a service to each stakeholder and not a specific product. Because CRM is rather immature for CDOs, there are few vendor solutions in the health care market that target a specific stakeholder, never mind all CDOs stakeholders. CDOs need to know everything about their stakeholders and their needs. The business processes that support CRM offer CDOs the opportunity to enhance customer service and embrace one-to-one customer management.
CDOs are slowly progressing toward CRM strategies that incorporate Web-based consumer self-services (e.g., registration, scheduling, bill payments), online marketing campaigns, and customer service initiatives.
Sales
CDOs are turning to the Internet as a sales channel for customer acquisition. A technology-enabled customer acquisition strategy not only involves automating the customer-acquisition and sales process, but also determines which customers should be targeted and through which channel. This requires CDOs to be far more proactive in their customer-acquisition strategies. Many CDOs are focused on implementing enterprise scheduling and registration systems as the core of their customer acquisition strategies. In the future, these goals will become more far-reaching. In the outpatient arena, CDOs should focus on Web-enabling their scheduling applications to enable customer self-service, so that they may attract new customers with little incremental cost. In the inpatient arena, CDOs with business intelligence analytics will be capable of offering preferential service to referring physicians during periods of underutilization to improve patient censuses. In the payer organization arena, superior business analytics will give providers better tools to understand their costs during the contracting process.
Marketing
Most CDO marketing efforts are on health promotion and preventive medicine. CDOs are formulating branding strategies and developing online and offline marketing campaigns. The single greatest area of TEM in the provider marketplace is the coordination of the CDOs online marketing strategies.
CSS
CSS applications include nurse-on-call applications, billing support applications, and contact center technologies (IVR, CTI, ERMS). CDOs have tremendous administrative overhead costs tied into coordinating patient care activities (e.g., patients, referring physicians, payer organizations). Each of these stakeholders has different needs, requirements, and roles in the patient care process. One of the most significant cost categories for CDOs is the expense of labor to coordinate these players. Furthermore, many of the most vocal complaints by consumers and their providers involve poor customer service related to insurance processing and bill payment. CDOs are also developing portals as a communications channel to manage interaction between patients, physicians, hospitals, and health care providers to increase customer loyalty, reduce costs, and increase market share. The portal can supply visitors with specific health care information, services, and benefits (e.g., online prescription orders, health risk assessments, chat rooms, and the ability to communicate via email with physicians).
Bottom Line
Enterprises no longer view their customer base as a homogenous collection of revenue-generating units. Instead, they want to be more personal with clients. As the health care organization grows, however, it becomes increasingly difficult to provide personalized levels of service. CRM projects focus on integrating and leveraging all of a companys outward-facing actions to acquire new customers, retain existing ones and, most importantly, identify the most profitable prospects. Acting on the notion that effectively managing the customer relationship from initial contact through follow-up services yields the greatest chance of keeping customers satisfied, companies are deploying CRM-enabling technologies, such as call center software and self-service Web sites, to please the never-satisfied customer.
