Medical referral marketing in USA Today, Wall Street Journal

If you thought referral marketing was a crazy fad think again.  Below are two recent articles in the national press, USA Today, and Smart Money Magazine from the Wall Street Journal, which discuss this emerging trend in healthcare management.

We joke about this being an emerging trend because certain markets have been doing this for decades while the East Coast seems to be just catching on in 2012.  Many would assume that a trend like this began in the competitive environs of California but we seem to link this trend back to Indiana where virtually every practice engages in some type of medical practice marketing.  The December 2011 article in USA Today points out practices in the Chicago suburbs who actively promote their capabilities with a Practice-Rep or Physician Liaison.

The difference between the two titles is this; Physician Liaison’s typically are employed by a hospital where they market service lines such as cardiology, surgery, etc.  Practice-Reps tend to be employed by privately owned specialty practices where they market the capabilities of just that practice and no others in that community.  With a Liaison, you’re lumped into a service line.  With a Practice-Rep you are front and center stage to the referral community.

Below is a help wanted ad from a leading teaching hospital here in Philadelphia.  They are advertising for a “newly created position” of Manager of Physician Liaison’s.  Take a look at the job description and you’ll see that they are serious about going after referrals in their catchment communities.  Fortunately our credentials exceed their job requirements for this position so you can rest assured that “Your management team” will exceed the requirements of this premier institution.

Job Description We currently have a strategically key, newly created position available to be responsible for growth by earning referrals from physicians to our nationally recognized hospital. The Manager will be responsible for creating referral development plans based on __________ University Hospital’s strategic and operating plans, physician liaison business plan and market intelligence. The manager will have oversight for the field team, responsible for hiring and maintaining a team that professionally represents the organization and accomplishes the assigned tasks. This person will understand the practice of medicine including referral relationships, payor requirements and other economic and financial influences. This position is eligible for up to 20% of base pay in incentive bonus compensation.

Job Requirements Qualifications Minimum Bachelor degree required, preferably in business, healthcare administration, or public health administration. Previous leadership or management experience preferred. Hospital experience required. Previous experience as physician liaison preferred. Minimum of five (5) to seven (7) years of sales experience, preferably with physicians and/or health care provider setting. Ability to write and implement a marketing/sales plan. Ability to plan, organize and manage resources within prescribed timeframes (prioritize and focus). Ability to present, probe, persuade and actively listen to referral source needs and respond with the right mix of service line and product attributes that produces results. Ability and willingness to learn new software as needed to ensure efficiency and effectiveness. Strong direct relationship sales skills preferred. Ability to work within a team structure, integrating and collaborating with various leadership and management groups to strategize and drive results. Conceptual and critical thinking skills required. Strong quantitative and analytical skills required.

The link below takes you to the April 17th article in Smart Money magazine from The Wall Street Journal http://www.smartmoney.com/plan/health-care/the-surprising-secret-behind-doctor-referrals-1334332558571/
Below is the December, 2011 article from USA Today which further details this concept of direct field reps and referral marketing.

Hospitals hire reps to sell doctors on patient referrals

By Phil Galewitz, Kaiser Health News

In northwest Indiana, Carrie Sota visits five or six doctors’ offices every workday as part of her new sales job.

By John Zich, USA TODAY

Carrie Sota, physician liaison at University of Chicago Medical Center, talks with coworker Anthony Turner.

But Sota isn’t selling the physicians on a prescription drug or a medical device. She’s promoting her hospital — the University of Chicago Medical Center.

Sota, 30, is one of four employees the academic medical center has hired in recent months to make “sales calls” on physicians in the hope that they will send more patients to the hospital. “We are trying to build meaningful relationships,” said Sota, who was previously a saleswoman for a small medical device company.

The University of Chicago Medical Center is one of a growing number of hospitals nationwide hiring former drug and device sales reps to visit doctors’ offices to persuade them to use their services over competing facilities.

Rather than handing out samples of prescription drugs, the sales reps call on doctors armed with the latest information on how their facility is reducing hospital-acquired infections and improving patient-satisfaction scores.

In visits that can last five to 20 minutes, reps try to win doctors’ loyalty by helping them get better times on operating room schedules or easier patient referrals to hospital-based specialists. The sales reps can also carry messages back to the hospital, such as a doctor’s request for a new medical device to be available in surgery.

While hospitals have always tried to woo doctors to refer patients to them, the institutions are growing more direct in their efforts. The hospitals mine data to see which doctors have the most profitable, well-insured patients, and then they assign those doctors to a sales rep.

‘Physician liaisons’ on the rise

Convinced the sales-call strategy is fueling higher admissions, Tenet Healthcare, the nation’s third-largest for-profit hospital chain, has doubled its sales force in the past two years. It now has 152 “physician liaisons” at its 49 hospitals, most of which are in California, Texas and Florida.

About two-thirds of Tenet’s liaisons are former drug and device sales reps, and they can make tens of thousands of dollars in bonuses if doctors increase their referrals to the hospitals. “These people are really good and really assertive and very sophisticated,” said Stephen Newman, Tenet’s chief operating officer.

But they do have critics.

Paul Ginsburg, president of the non-partisan Center for Studying Health System Change, said, “When you look at the health system, this is a waste of resources. It’s a zero-sum game.”

He added: “The net results of changing physician-referral patterns is that one hospital gains at a cost of others, and all the hospitals burn resources to pay (sales)people who take up the doctor’s time.”

While federal law prohibits hospitals from paying doctors to admit patients, hospitals paying salespeople to influence doctors can get the same results, he said.

Newman said Tenet’s liaisons have strict guidelines so they can’t “game the system” to reach financial bonuses. For example, their bonuses can’t be tied to just one doctor’s referrals.

As a result of major cutbacks by pharmaceutical and medical-device companies in the past decade, hospitals have thousands of former medical salespeople to draw from. Tenet’s roster of sales associates includes alumni of pharmaceutical and device giants Sanofi-Aventis, GlaxoSmithKline, Johnson & Johnson and Novartis.

Newman said the company is focused on increasing referrals from doctors who split their patient referrals among multiple hospitals, as well as from physicians who don’t yet refer to Tenet facilities. Since 2007, the company credits its physician liaisons with helping to boost the numbers of doctors who actively refer patients to its hospitals by 39%, or more than 4,500 doctors.

Hospitals say their new sales approach is part of a broader strategy to develop closer ties to physicians, who largely determine where patients go for care. Hospitals also are buying doctors’ practices or forming closer partnerships with physicians to improve care and drive admissions.

“I think everyone wants to grow their market, and lots of hospitals see that the No. 1 way to get referrals is physician-to-physician interaction, and the second-best way is physician-to-physician-liaison interaction,” said Christine Perry, who manages the physician liaison program at Duke University Health System. Unlike most hospitals that have hired marketing people for the positions, Duke hires nurses as its liaisons.

Specialists are profitable

Many of the physician liaisons focus on specialists, who bring in patients for services with the highest profit margins, including orthopedics, cardiac care and cancer care, Perry said. But the sales calls also extend to internists and family doctors.

In fact, she said, a big factor behind the trend is that many primary care physicians no longer visit their patients in the hospital, because most hospitals have full-time physicians called hospitalists who care for patients in the facility. As a result, hospitals have fewer opportunities to interact with doctors in the community to tell them about a new CT scanner or new specialist.

Dr. Kaveh Safavi, the lead health industry consultant for Accenture, said hospitals are seeking ways to keep beds filled in the face of efforts by government and private insurers to reduce hospitalizations by eliminating pay for unnecessary admissions. “Hospitals know they have to create a larger funnel for a bigger population of patients to make their way to them,” he said.

Kathy DeVries, vice president of marketing at University of Chicago Medical Center, said the former drug sales reps understand how to work with doctors. “They speak their language,” she said. The hospital is now trying to hire a sales rep focused solely on pediatricians. In its help-wanted ad, the hospital said the liaison will have a goal of making 160 contacts a month with physician offices, including “25 meaningful face-to-face contacts with physicians.”

One downside to hiring former drug and device sales reps is that their medical knowledge usually focuses on a single specialty, such as diabetes treatment or orthopedics. In pitching their hospital to a doctor, the sales reps have to be familiar with a wider range of hospital services, Perry said.

Keeping doctors informed

HCA, the nation’s largest for-profit hospital chain, has at least 150 employees who make physician visits — or about one per hospital, said spokesman Ed Fishbough. He said about 90% of them visit doctors who already send some of their patients to HCA hospitals. “It’s to give our physicians and their patients a voice and to listen to any concerns the doctors may have and to address those,” he said.

Michelle Osipowicz, who spent five years as a sales representative for at Takeda Pharmaceuticals, is enjoying that aspect of her new role as a liaison for The Hospital of Central Connecticut.

“I act as a conduit between the hospital and the doctors in the community,” said Osipowicz, who visits up to eight offices a day, sometimes dropping in unannounced to chat with office staff about the hospital’s services or its latest medical specialists. “I bring more value to the physician office. I feel more respected in this role,” she said.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a non-profit, non-partisan health policy research and communication organization not affiliated with Kaiser Permanente.

END OF ARTICLE

Referral marketing is not new and done right, it can be highly effective for physicians and patients alike.  The reality is that hospitals and progressive practices are embracing this approach to secure and grow their referrals and it’s time that you and your associates give this serious consideration.

We’ve been helping practices grow their referrals for more than 20 years.  We’re East Coast based and we have the credentials, experience, and references to help you make an informed decision.  Call us today at 610-323-4793.  www.practice-reps.com

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