Description
Perhaps you have been to a health fair sponsored by a local hospital in your community. Who benefits from such an effort? When you or your neighbors are screened for signs of illness (hypertension, for instance) or learn about available services, clearly the promotion benefits you, but what about the hospital? Having its name associated with “community service” benefits the institution. Any patients and/or clients the institution attracts may also result in some financial benefit, even if the organization is ostensibly “non-profit.”
In this Discussion, you will identify examples of promotion for social change in your community and analyze whether the promotion benefits the community, the organization, or both.
To prepare for this Discussion:
- Review this week’s Learning Resources.
- Identify two local health care providers and identify an example of each organization’s effort in promoting a service or services as a form of positive social change. One of the organizations should be for-profit, the other, not-for-profit.
Post a brief description of how each organization’s promotion fosters social change. Then, evaluate how each organization’s marketing promotion benefits the community and how it benefits the organization. Finally, for each example of marketing promotion you have identified, analyze whether the interest of the community and the interest of the organization are in conflict. Briefly comment on how the promotions of the for-profit and non-profit organizations differ and how they are similar.
Support your work with specific citations from this week’s Learning Resources and/or additional sources as appropriate. Your citations must be in APA format.
: Evaluating Strategic Planning and Marketing/Summary
Throughout this course, you have explored the values, vision, and mission for your organization. You
performed the appropriate environmental assessment. You defined your organization’s goals and
objectives, and you formulated and implemented a strategy you believe helps you achieve them. Now
what? How do you know if it all worked as planned?
This week, you will consider the fifth step to strategic planning and marketing: evaluation. A carefully
considered and measurable evaluation allows an organization to determine how effective its efforts
have been in achieving its goals. Evaluation allows the organization to identify weaknesses and highlight
procedures and/or tools that may be useful and effective when applied in other circumstances.
As you may discover, evaluation is not the end of the process, but a necessary step in a constant,
continuous cycle of improvement for any organization.
In this week’s Discussion, you will consider promotions of health care organizations that target social
change. Using real-world examples, you will analyze whether these promotions benefit the organization,
the community, or both.
Learning Objectives
Students will:
Examine organizational marketing in the context of social change
Evaluate strategic planning and marketing results
.
——————————————————————————————————————–
•
•
•
Zuckerman, A. M. (2012). Healthcare strategic planning (3rd ed.). Chicago, IL: Health
Administration Press.
Chapter 9, “Making Planning Stick: From Implementation to Managing Strategically”
Chapter 10, “The Annual Strategic Plan Update”
Chapter 12, “Future Challenges for Strategic Planning and Planners”
Is Billboard Advertising Beneficial
for Healthcare Organizations?
An Investigation of Efficacy and
Acceptability to Patients
John L. Fortenberry Jr., PhD, chair. Health Administration Department, James K. Elrod
Professor of Health Administration, and professor of marketing. School of Business,
Louisiana State University, Shreveport, Louisiana, and Peter J. McColdrick, PhD, Tesco
Professor of Retailing, S4anchester Business School, The University of Manchester,
Manchester, United Kingdom
EXECUTIVE
SUMMARY
The healthcare industry is increasingly turning to billboard advertising to promote
various medical services, yet little attention has been directed toward understanding
the performance and policy implications of billboard advertising from the perspective of the patients targeted. To shed light on this, we initiated a field experiment
investigating the impact of an urgent care center’s billboard advertising campaign,
colleaing primary data over a 32-day period at the center’s two clinics. Over the
course of the billboard campaign, perspectives from 1,640 patients were collerted via
questionnaire. Institutionally supplied business metrics were also monitored.
Our principal findings indicate that billboard advertisements are noticed by
patients, favorably viewed by patients, and effective across the sequence of steps leading to patient patronage. Enhancement of awareness exerts the most powerful influence on patronage, but the capacity to inform consumers is also highly significant.
These effects are not limited to new patients, as many returning clients were made
more aware of the clinics and were influenced by the campaign. The study offers
insights for creative billboard treatments and campaign planning. Although effeas
remained strong throughout the campaign, some degree of “wearout” was evident
after three weeks, which suggests the need to rotate billboards frequently and to
consider digital billboards. Corner tabs—small announcements sometimes placed in
the corners of billboard advertisements—proved largely ineffective as a promotional
device and may clutter the central messages.
Given these findings, we believe healthcare institutions are justified in using
billboards, as they perform effeaively and appear relatively free of controversy. Careful planning of creative billboard treatments and appropriate scheduling patterns are
essential to maximize their communications potential.
For more information on the concepts in this article, please contact Dr. Fortenberry at Iohn.Fonenbeny@lsus.edu.
81
JOURNAL OF HEALTHCARE MANAGEMENT 55:2
MARCH/APRIL
H
ealthcare institutions and providers
face serious dilemmas as communication with current and prospective
patients becomes increasingly difficult
(Fortenberry 2010). The prolifération
of media options results in increasingly
fragmented audiences (Andruss 2007;
Moriarty, Mitchell, and Wells 2009).
Clutter is now a serious problem in
most advertising media, as vast numbers of messages compete for attention
(Berkowitz 2006; Elliott and Speck
1998; Cratton 2006; Bloom 2003).
Information overload leads to highly
selective attention, and technologies
such as DVD recorders and ad-blocking
software can reduce exposure to ads
(Tellis 2004; Gritten 2007). A fiirther
challenge is the shortening of attention
spans, a trend to which text and Internet
communication both caters and contributes (Obermiller 2002; Whaley 2006).
2010
of reaching 1,000 members of a targeted
population with a given form of marketing communication (Moriarty, Mitchell,
and Wells 2009; OAAA 2008), as indicated by comparative figures presented
in Table 1. These characteristics give
billboards significant advantages.
These benefits have not been lost on
the healthcare industry, which is now
a large user of the medium (Berkowitz 2006; Managed Healthcare 1994).
Despite extensive and increasing use,
however, little is known about how
billboards work, and academic research
is scarce (Woodside 1990; Fortenberry
and McGoldrick 2006; Taylor, Franke,
and Bang 2006) and seemingly nonexistent for the healthcare industry. Civen
increasing pressures for healthcare marketing officers to demonstrate a return
on advertising expenditures (Eudes
2006; Berkowitz 2006; Thomas 2005),
understanding if and how major types
of media work is essential,
Although all media possess
strengths and weaknesses, billboards
have a degree of immunity to the audience fragmentation, clutter, ad blocking, and attention span problems facing
other media. Audience fragmentation is
not an issue because the limited travel
routes in given communities concentrate exposure of billboards to mass
audiences. Additionally, technology that
blocks billboard advertisements is currently not available. Billboard advertisements also enjoy a relatively clutter-free
setting, as zoning ordinances limit their
proliferation (Lamar Advertising 2008;
OAAA 2008). Because of their nature,
billboard positioning and creative
treatments have always assumed short
attention spans. In addition, among the
major media, billboards offer the lowest
cost per thousand, a measure of the cost
LITERATURE
REVIEW
The neglect of academic research on
billboard advertising is often attributed
to the costs involved with enacting field
experiments, the preferred method for
studying the medium (Woodside 1990;
Bhargava and Donthu 1999; Fortenberry
and McColdrick 2006). Laboratory
experiments do not effectively replicate
the externalities associated with billboards, such as motorist attention to the
road, and other environmental distractions that take attention away from billboards. The extant literature focuses on
four main categories: history, art, policy,
and performance.
Research on tbe history of billboard
advertising focuses on the growth and
82
Is BILLBOARD ADVERTISING BENEFICIAL TOR HEALTHCARE ORGANIZATIONS?
influence performance, as reported in a
few performance-related studies discussed later.
The policy category is perhaps the
most developed ofthe four areas of
the billboard literature. Substantial
works mostly focus on the societal
benefits or detriments associated with
billboard advertising, and debates
between proponents and opponents of
the medium are commonplace (Taylor
1997). Billboard proponents frequently
emphasize the medium’s ability to
communicate information to travelers,
deliver customers for advertisers, and
increase road safety (Laible 1997; OAAA
2008). Billboard opponents, however,
contend that billboard advertisements
cause such undesirable consequences
as aesthetic pollution (e.g., roadside
clutter, excessive transmission of ambient light), environmental harm (e.g.,
damage to the environment when
vegetation is removed to place roadside
billboards), and motorist harm (e.g.,
billboard advertising distracts drivers
and contributes to vehicular accidents)
(Vespe 1997; Scenic America 2006).
Some also claim that the preponderance of billboards that advertise harmful products in minority communities
affects public health (Altman, Schooler,
and Basil 1991; Hackbarth, Silvestri,
and Cosper 1995). The conflicting
arguments of Laible (1997) and Vespe
(1997) perhaps best illustrate this
debate. One side asserts that the public
likes billboards, and the other claims
the public dislikes billboards, although
it appears that the public is never actually asked for its perspective. Despite
lengthy battles, this key question
remains unanswered.
TABLE 1
Comparative Costs of Various Media
Cost per
Ttiousand
Media
Television (prime lime)
Magazine
$30.45
•
$25.93
Newspaper
$12.24
Internet
$11.25
$9.69
Radio
Outdoor
$3.62
Source: Information based on estimaces from media experts
andOAAA(20U’)).
development ofthe medium; works by
Hendon and Muhs (1986) and Gudis
(2004) are excellent examples. Although
assumptions regarding billboard efficacy have clearly driven their development over the years, such performance
considerations are not a focus of these
historical accounts. They provide interesting accounts ofthe chronological
development ofthe medium but do not
analyze the performance characteristics
or related matters that would be helpful
in executive decision making.
Within the art category, the literature focuses primarily on photographic
collections of billboards; Fraser (1991)
and Heon, Diggs, and Thompson
(1999) are good examples. Such authors
often present the winning entries from
billboard artwork contests, providing readers with examples of creative
efforts. This area ofthe literature tends
to address creativity, rather than an ad’s
ability to generate a marketing return
on investment. However, there is clearly
much scope for creative treatments to
83
JOURNAL OF HEALTHCARE MANAGEMENT 55:2 M A R C H / A P R I L 2 0 1 0
OBJECTIVES AND
CONCEPTUAL FRAMEWORK
The literature on billboard performance is clearly the least developed,
and few academic studies have been
published. However, this area is of great
importance to institutions and media
planners because they need a close
understanding of the performance characteristics of billboards to make pmdent
judgments regarding their use. Most of
the work in this area has focused on
recall—that is, the ability of a consumer
to view an advertisement and remember
its message and other relevant characteristics. The studies of Hewett (1972),
Fitts and Hewett (1977), King andTinkham (1990), and Osborne and Coleman (2008) indicate that billboards are
capable of generating recall.
The primary objective of this research
is to gain insights into the performance
characteristics of billboard advertising in
the healthcare industry and thereby help
institutions make more efficient media
allocations. The sparse previous research
in nonhealthcare settings indicates the
following:
Several authors have focused on
how creative and spatial characteristics
affect recall. Studies by Young ( 1984);
Donthu, Cherian, and Bhargava
(1993); and Bhargava, Donthu, and
Caron (1994), for example, indicate
that roadway positioning, size of text,
use of color, and related characteristics
affect consumers’ ability to remember
billboard message content. A further
element of the billboard performance
literature focuses on the ability of
billboards to drive sales, although the
field experiments of Bhargava and Donthu (1999) are the sole independent
contributions in this important area.
The Outdoor Advertising Association
of America (OAAA 2009) compiled
case studies of billboard campaigns,
and Taylor, Franke, and Bang (2006)
surveyed management views regarding billboards. However, the efficacy of billboards remains seriously
underresearched.
•
Billboards generate recall (Hewett
1972; Fitts and Hewett 1977; King
and Tinkham 1990; Osborne and
Coleman 2008).
•
Creative and spatial applications
affect billboard advertising recall
(Young 1984; Donthu, Cherian, and
Bhargava 1993; Bhargava, Donthu,
and Caron 1994).
•
Billboards can drive sales (Bhargava
and Donthu 1999).
We aim to assess the impact of
billboards across what is known in the
advertising literature as the hierarchy of
effects, which is referred to herein as the
patient patronage sequence—that is, the
theoretical series of steps through which
consumers travel as they move from initial awareness toward making a decision
to act or buy. The concept that people
pass through a hierarchy or sequence
of stages in their progression from
awareness to action is well established
in advertising (Tellis 2004), consumer
behavior (Solomon 2007), psychotherapy (Prochaska and Norcross 1999),
and social marketing (Velicer, Rossi, and
Procbaska 1996). Knowledge relating
to the efficacy of billboards at different
stages in this sequence is of value to
84
Is BILLBOARD ADVERTISING BENEFICIAL FOR HEALTHCARE ORGANIZATIONS?
healthcare providers. More specifically,
we also test the efficacy of comer-tab
promotions.
Secondary objectives pertain to
billboard policy matters relevant to the
general debate (Taylor 1997) between
proponents (Laible 1997) and opponents (Vespe 1997) of this advertising medium. Specifically, we measure
whether patients view the medium
favorably and consider billboards
appropriate for marketing healthcare
services to help resolve the issue of
whether the public likes or dislikes billboards. A medium regarded as inappropriate or controversial could clearly be
detrimental to new business and loyalty.
Given the paucity of academic research
on billboards in general and its absence
in the healthcare context, the study further aims to close significant gaps in the
literature on advertising and healthcare
marketing.
The study draws on two conceptual
domains in examining the effects of
billboards: first their efficacy in promoting healthcare establishments, and
second, the perceived appropriateness
of the medium for healthcare promotion. For the first domain, we draw from
the literature on billboard performance
and the wider literature on hierarchies
and models of the effects of advertising
and construct scales to measure effects
on customer awareness, perceptions
of informativeness, and influence on
initial and return visits. For the second
domain, we draw from a selection of
the literature related to billboard policies, and then we measure attitudes of
patients toward the medium and its
appropriateness for healthcare advertising. Figure 1 shows the conceptual
and analytical framework of the study,
illustrating these two sets of influences
on new or returning patient visits.
FIGURE 1
Conceptual Framework of the Study
Efficacy:
Promoting Healthcare Facility
Patient Patronage Sequence
Raising/
Creating
Awareness
Appropriateness:
Attitudes Toward Billboards
Billboard Policy Debates
Conveying
Relevant
Information
Appropriate
for Health
Advertising?
Influencing Visits to the Facility:
First Visit >>>> Return Visits
85
Overall
Opinion of
Medium
OF HEALTHCARE MANAGEMENT 55:2
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ANALYTICAL PLAN
AND METHODOLOGY
2010
The campaign represented a 133
gross rating point showing, which
indicates daily exposure levels for the
campaign at 133 percent of the population aged 18 years or older. This meant
that people in this age group were
typically exposed to the campaign more
than once per day, given the number of
billboards purchased. Willis-Knighton
Health System purchased nine bulletins (14 X 48-foot billboards) and
seven posters (12 x 24-foot billboards),
and these were scheduled mainly in
the month of October at a total cost
of $25,411. Figure 2 shows the creative treatment, including a corner-tab
invitation to telephone a “Flu Shotline.” This approach provided further
opportunity to assess performance
through direct monitoring of call
volumes.
To pursue these objectives, we designed
and implemented a comprehensive
analytical plan following the conceptual
framework depicted in Figure 1.
Field Experiment
Following guidance regarding the
preferred method for studying billboards, we developed an associated
field experiment with the cooperation
of a local healthcare provider. Specifically, our study tracked a 32-day billboard campaign by the Louisiana-based
Willis-Knighton Health System promoting its Quick Care urgent care centers
in Shreveport and Bossier City, an area
with a population of around 260,000
(U.S. Census Bureau 2008). Tbese
centers were well suited to the investigation, as urgent care needs occur at
any time and require a relatively short
decision process, usually within the
span of a typical billboard campaign.
Furthermore, these centers had not
been the focus of extensive advertising
in the past.
Questionnaire
To assess the billboard advertising campaign, we developed a self-administered,
three-section questionnaire that was distributed to patients on arrival at Quick
Care.
FIGURE 2
The Quick Care Billboard Advertisement
Source: Reprinted with permission from Willis-Knighion Health System, Shreveport Louisiana.
86
Is BILLBOARD ADVERTISING BENEFICIAL I-OR HEALTHCARE ORGANIZATIONS?
The first section focused on performance aaoss the patient patronage
sequence. The study context limited
questionnaire length and precluded the
use of multi-item scales. However, Rossiter (2002) and Bergkvist and Rossiter
(2007) show that single-item scales
can perform equally well for objects
“easily and uniformly imagined,” such
as billboards. After first establishing
whether the respondent bad noticed the
billboards, a seven-point scale adapted
from Havlena and Craham (2004)
measured change in awareness levels. A
scale of advertising informativeness was
built on a concept developed by Ducoffe
( 1995) and Smit and Neijens (2000).
For a later stage in the patient patronage
sequence, an extent of influence scale
was adapted from Cilly and colleagues
(1998).
The second section focused on the
billboard policy debate, and patients
were asked about the degree to which
they view billboards to be appropriate
for marketing healthcare services and
about their overall view of billboards.
The seven-point scale, which ranged
from 1 = very negative to 7 = very positive, was adopted from Krosnick, Judd,
and Wittenbrink (2005). This section
addressed the debate about whether
consumers like or dislike billboard
advertisements, and it appears to be the
first academic study, either within or
outside the healthcare sector, that seeks
consumer perspectives.
The third section included a series of
demographic inquiries, which permitted
us to investigate potential trends and
patterns associated with specific patient
groups and subgroups. Questionnaire development included two focus
groups, and furtJier qualitative methods
helped to interpret the results.
Sample
Over the course of the campaign, 2,380
patients came to one of the two Quick
Care locations for treatment. Of these,
1,640 participated in the survey, yielding a response rate of 68.9 percent.
Table 2 summarizes the demographic
characteristics of respondents, which
TABLE 2
Summary of Respondent Characteristics
(N = 1,640)
Characteristic
Respondent Income ($)
Under $10,000
18.2
$10,000-524,999
20.9
$25,000-$39,999
23.9
$40,000-$54,999
15.4
$55,000-$84,999
13.2
$85,000 and over
8.5
Mean income
$37,644
Gender
Male
37.0
Female
63.0
Age
Under 18 years
18-29 years
25.8
30-39 years
25.0
40-40 years
19.1
50-59 years
12.7
60 years and older
10.3
First Visit to Clinic
Yes
53.3
No
87
7.1
46.7
JOURNAL OF HEALTHCARI; M A N A G E M E N T 5 5 : 2 M A R C H / A P R I L
2010
dents. This supports claims by the advertising industry that billboards generate
significant attention and supports their
use by healthcare institutions. The overall difference between first-time visitors
and others is highly significant (Chisquare = 39.44, p < .001), with 65.4
percent of first-time visitors noticing the
billboards, compared with 79.5 percent of existing clients. Figure 3 shows
that the level of notice was consistently
higher among existing patients, which
indicates that billboards have potential for brand reinforcement. However,
the incremental gain over the first two
weeks was considerably greater among
those making a first visit, indicating that
were similar between the two Quick
Care locations. Female respondents
outnumbered males, but this was not
surprising as women are typically the
chief caregivers for dependent family
members. The respondents had a mean
age of 38.5 years and a mean annual
income of $37,644 (individual, not
household). Slightly more than half of
the respondents were making their first
visit to Quick Care.
RESULTS
Performance Characteristics
The propensity to notice billboards was
very high at 72.7 percent of respon-
FIGURE 3
Temporal Trends in Patients Noticing Billboards
85%80%-
^^^^^
1 75%-
E
CÛ
^
• •
70%*
g 65%-
*
•
*
*
60%-
*
First visit
— -No
• ••Yes
55%1
I
I
r
Week 1
Week 2
Week 3
Week 4
Week of Campaign
88
Last 4
days
Is BILLBOARD ADVERTISING BENEFICIAL FOR HEALTHCARE ORGANIZATIONS?
billboards also fulfill their (assumed)
primary role of attracting new clients.
Overall, the propensity to notice
the billboards increased rapidly
between weeks 1 and 2, peaking at
week 3, before declining to the end
of the campaign; this represented a
significant difference between the
weeks (Chi-square = 13.791, p < .01).
This parallels earlier billboard research
findings by King and Tinkham (1990)
and indicates the onset of advertising
wearout (Craig, Sternthal, and Leavitt
1976). The most powerful noticeeliciting period is in the initial weeks
of billboard campaigns.
Table 3 shows the performance of
Quick Care’s billboard advertisements
across the patient patronage sequence.
For awareness, an early-stage effect,
73.6 percent of respondents overall
reported a moderate or greater increase
in awareness resulting from the adver-
tisements. The enhancement of awareness is strong overall but significantly
greater for new clients (t = 2.96, p< .01).
At a later stage in the patient patronage sequence, 79.3 percent of new
and returning customers reported the
billboards to be moderately or highly
informative.
For degree of influence, a later-stage
effect, results were more evenly balanced
but remained supportive of billboard
use; 63.6 percent of respondents indicated that the Quick Care billboards at
least moderately influenced their visit.
The influence on new visitors was significantly greater (f= 2.70, p < .01), but
healthcare advertisers should not ignore
the extensive influence on returning
customers. The proportions indicating
lower influence come as no surprise, as
patients often patronize a clinic based
on referrals from medical practitioners,
insurance companies, and family and
TABLE 3
Performance and Policy-Related fVieasures
Measures
(Scale of 1-7)
Low%
(1-3)
Moderate %
Visit
Increased awareness
First
Informative
Influenced the visit
Appropriateness
Overall opinion
Mean
Score
/ value
(4)
High%
(5-7)
22.5
15.2
62.3
4.84
Other
28.9
15.2
55.9
4.48
2.96
( The physician value index is a metric that can help
hospital leaders understand the various levels of
“I think doctors are motivated to improve if they see objective data that
they are not performing as well as their peers. It is not necessarily a
financial incentive, but a patient care incentive that will motivate them.”
—Jack Lewin, CEO, American College of Cardiology (as quoted by
physician performance along the care continuum in
Goldman, E., “Pay-for-Pejformance Advocates Acknowledge Raws: If
terms of cost and quality.
Not Designed Carefully. Plans Can Warp Physician Behavior and Fail to
> The metric illustrates physician performance in the
Improve Health Care Quality. ” Internal Medicine News. Sept. l. t
context of an overall quality of care composite that
incorporates patient satisfaction, care outcomes,
patient safety, and hospital financial performance.
> Hospitals can use the metric to identify and leverage
the practices of top-performing physicians to
improve overall system financial performance and
patient quality of care.
Hospitals face unprecedented challenges today in preparing for healthcare
reform and regulatory requirements, an ever-increasing population of
uninsured, fast-rising supply and device costs, and even more rapidly
shrinking reimbursements. These challenges exert pressure on hospital
leaders to drive profitability and maintain high-quality care. And they force
hospital leaders to rethink their approach to rescue and protect margins.
Hospital executives now find that ineremental performance improvement
no longer works. What they want is an innovative business model that will do
more than just help them weather the storm. They want to put an absolute
end to shrinking margins and position their institution for sustainability
and profitability.
Hospitals now have a tremendous new opportunity with the prospect of
developing accountable care organizations (ACOs), as outlined in the
Affordable Care Act. The goal of this aspect of the legislation is to integrate
hospitals and physicians by holding them jointly responsible for quality and
cost of care. The ACO model simply encompasses a patient care continuum
that includes the hospital, primary care physicians, specialists, and potentially other medical professionals. Innovative hospitals are taking the lead to
develop coordinated care systems that embody the core principles underlying ACOs. They have come to view physicians as partners and collaborators
in this enterprise.
92
FEBRUARY 2011 healthcare iinancial management
The biggest challenge for hospital leaders in
today’s post-reform era is aligning clinical and
financial goals without undermining qualify of
care. Many healthcare providers helieve that
quality of care and cost of care are conflicting ends
of a spectrum—success with one is at the expense
of the other. This attitude mirrors that of the U.S.
auto industry in the 1970s and 1980s, until
Japanese competitors proved them wrong. The
lesson came at a high price: The U.S. lost dominance in the global automotive market.
and low risk of mortalify, which resulted in a high
cost of care and low qualify of care. The physician
Yet achieving ACO status and a high level of over- would likely be much more receptive to this
all performance depends on absolute clinicalapproach, especially if he or she is also presented
financial alignment, which begins with successful with other physician data reflecting a comparahle
physician integration across the care continuum.
patient mix but with a lower cost and higher qualify.
Because physician decisions and actions impact
70 to 80 percent of the hospital cost structure,
In short, hecause of their training, physicians
leaders need to address the question, “Do we
typically are much more likely to be persuaded by
really understand how to engage physicians to
research and facts. When faced with a holistic
align their interests with ours?”
view, backed with data, they are much more likely
Innovative hospital systems know
that the best way to gain physician
buy-in for change is by showing
how clinical processes affect
financial performance.
To hegin to answer this question, hospital executives should first identify problems, prioritize
them, and analyze root causes to make changes
that will yield the greatest impact.
Talking Change with Physicians: Storytelling
or Hard Facts?
If physicians resist clinical process change, it is
often hecause of how the case for that change is
presented to them. The usual approach to communicate with them is project-based and anecdotal. For example, hospital executives may cite
the fact that a physician is using a high-cost hip
implant associated with an average length of stay
of five days but the hospital still has a higherthan-average 3o-day readmission rate. The
physician is unlikely to accept such anecdotal
data and will probably respond with a common
rehuttal: “These patients were sick and had a high
risk of mortality.” The physician may also question the statistical significance of the sample.
Instead, the hospital administrators should have
presented the physician with a statistically significant sample (including confidence intervals) of a
specific patient case mix with no complications
to respond enthusiastically. Innovative hospital
systems, therefore, know that the best way to gain
physician buy-in for change is by showing how
clinical processes affect financial performance.
Knowing what’s required, do hospitals have
“actionable insight” for productive communication with physicians? Traditional decision support systems offer only department-centric
information, creating silos and many versions of
truth. Without patient-, process-, and outcomecentric intelligence, hospitals lack transparency
and predictability around cost of care and qualify
of care by physician, diagnosis-related group
(DRC), facilify, and other dimensions.
Consider these four questions:
> Do you measure and report cost and qualify to
demonstrate value along many dimensions?
> Are you confident in your abilify to analyze
raw data on cost and qualify thoroughly and
correctly?
> Does your current analysis show physician
impact on hospital performance from qualify
and cost perspectives?
> Are the analytical processes institutionalized,
repetitive, and continuous?
M m a . o r g FEBRUARY 2011
93
FEATURE STORY
A “no” to even one of these questions indicates a
need for greater preparation before you pursue an
integrated or ACO business model. Any effori
lacking a system perspective will be viewed as just
another “consulting program ofthe day” and will
not have a lasting impact. A hospital can build
trust with ACO stakeholders only by clearly showing the quality and cost of care by episode, facil ity, physician, DRG, and other dimensions.
using cost and quality as the basis for the analysis,
it becomes clear which changes will improve cost
without sacrificing quality, or improve quality
without adding cost.
Where do physicians exist in the care continuum
in terms of quality and cost? Strategic physician
integration should be founded on a clear understanding of physician performance levels along
the care continuum if it is to succeed. Thepfijsieian value index is a dynamic and comprehensive
set of metrics that can help hospital leaders
achieve this understanding.
The physician value index is predicated on a comprehensive, systemwide analysis of quality-of-care
metrics. Every quality measure from each system
(e.g., clinical, operational, and ancillary) is collected and classified by impact on key performance
indicators (KPIs) related to considerations such as
safety, outcomes, and process. The KPIs are
assessed systematically to determine the impact on
physicians. All measures are then rolled up to provide an aggregate score of quality of care by physician by DRG, as is shown in the exhibit below.
Then, to develop a physician value index, healthcare leaders map the quality-of-care scores for
physicians and DRGs against cost of care.
This metric set illustrates physician performance
in the context of overall patient satisfaction and
hospital financial performance. With this frame
of reference, hospital leaders can begin to measure how specific actions by physicians within and
across DRGs can directly impact overall system
financial performance and quality of care. Ry
The Physician Value Index
Visually, the physician value index is a matrix in
which top-performing individuals appear in the
upper right quadrant, and low-performing individuals appear in the lower left quadrant. The
X axis represents performance along quality of
care. The Y axis shows performance in terms of
A Strategy (or Physician Integration
QUALlTY-OF-CARE METRICS BY PHYSICIAN
Surgeon
Count Total
Cost
$16,158,209.55
Average
Cost
1
1
1
Satisfaction
Average
Ouality
Structural
Safety
Process
60%
70%
89%
57%
83%
72%
Outcome
Total
720
97175
147
j $3,247,510.41
$22,091.91
62%
71%
89%
58%
79%
72%
91926
65
‘ $1,415,563.12
$21,777.89
55%
70%
90%
57%
85%
71%
91975
55
$1,226,759.59
$22,304.72
55%
68%
88%
57%
79%
69%
96196
55
$1,026,767.31
$18,668.50
63%
70%
88%
58%
76%
‘ 71%
97244
44
$979,691.42
$22,265.71
57%
70%
87%
57%
82%
71%
91305
43
$1,
Throughout this course, you have explored the values, vision, and mission for your organization. You
performed the appropriate environmental assessment. You defined your organization’s goals and
objectives, and you formulated and implemented a strategy you believe helps you achieve them. Now
what? How do you know if it all worked as planned?
This week, you will consider the fifth step to strategic planning and marketing: evaluation. A carefully
considered and measurable evaluation allows an organization to determine how effective its efforts
have been in achieving its goals. Evaluation allows the organization to identify weaknesses and highlight
procedures and/or tools that may be useful and effective when applied in other circumstances.
As you may discover, evaluation is not the end of the process, but a necessary step in a constant,
continuous cycle of improvement for any organization.
In this week’s Discussion, you will consider promotions of health care organizations that target social
change. Using real-world examples, you will analyze whether these promotions benefit the organization,
the community, or both.
Learning Objectives
Students will:
Examine organizational marketing in the context of social change
Evaluate strategic planning and marketing results
.
——————————————————————————————————————–
•
•
•
Zuckerman, A. M. (2012). Healthcare strategic planning (3rd ed.). Chicago, IL: Health
Administration Press.
Chapter 9, “Making Planning Stick: From Implementation to Managing Strategically”
Chapter 10, “The Annual Strategic Plan Update”
Chapter 12, “Future Challenges for Strategic Planning and Planners”
Is Billboard Advertising Beneficial
for Healthcare Organizations?
An Investigation of Efficacy and
Acceptability to Patients
John L. Fortenberry Jr., PhD, chair. Health Administration Department, James K. Elrod
Professor of Health Administration, and professor of marketing. School of Business,
Louisiana State University, Shreveport, Louisiana, and Peter J. McColdrick, PhD, Tesco
Professor of Retailing, S4anchester Business School, The University of Manchester,
Manchester, United Kingdom
EXECUTIVE
SUMMARY
The healthcare industry is increasingly turning to billboard advertising to promote
various medical services, yet little attention has been directed toward understanding
the performance and policy implications of billboard advertising from the perspective of the patients targeted. To shed light on this, we initiated a field experiment
investigating the impact of an urgent care center’s billboard advertising campaign,
colleaing primary data over a 32-day period at the center’s two clinics. Over the
course of the billboard campaign, perspectives from 1,640 patients were collerted via
questionnaire. Institutionally supplied business metrics were also monitored.
Our principal findings indicate that billboard advertisements are noticed by
patients, favorably viewed by patients, and effective across the sequence of steps leading to patient patronage. Enhancement of awareness exerts the most powerful influence on patronage, but the capacity to inform consumers is also highly significant.
These effects are not limited to new patients, as many returning clients were made
more aware of the clinics and were influenced by the campaign. The study offers
insights for creative billboard treatments and campaign planning. Although effeas
remained strong throughout the campaign, some degree of “wearout” was evident
after three weeks, which suggests the need to rotate billboards frequently and to
consider digital billboards. Corner tabs—small announcements sometimes placed in
the corners of billboard advertisements—proved largely ineffective as a promotional
device and may clutter the central messages.
Given these findings, we believe healthcare institutions are justified in using
billboards, as they perform effeaively and appear relatively free of controversy. Careful planning of creative billboard treatments and appropriate scheduling patterns are
essential to maximize their communications potential.
For more information on the concepts in this article, please contact Dr. Fortenberry at Iohn.Fonenbeny@lsus.edu.
81
JOURNAL OF HEALTHCARE MANAGEMENT 55:2
MARCH/APRIL
H
ealthcare institutions and providers
face serious dilemmas as communication with current and prospective
patients becomes increasingly difficult
(Fortenberry 2010). The prolifération
of media options results in increasingly
fragmented audiences (Andruss 2007;
Moriarty, Mitchell, and Wells 2009).
Clutter is now a serious problem in
most advertising media, as vast numbers of messages compete for attention
(Berkowitz 2006; Elliott and Speck
1998; Cratton 2006; Bloom 2003).
Information overload leads to highly
selective attention, and technologies
such as DVD recorders and ad-blocking
software can reduce exposure to ads
(Tellis 2004; Gritten 2007). A fiirther
challenge is the shortening of attention
spans, a trend to which text and Internet
communication both caters and contributes (Obermiller 2002; Whaley 2006).
2010
of reaching 1,000 members of a targeted
population with a given form of marketing communication (Moriarty, Mitchell,
and Wells 2009; OAAA 2008), as indicated by comparative figures presented
in Table 1. These characteristics give
billboards significant advantages.
These benefits have not been lost on
the healthcare industry, which is now
a large user of the medium (Berkowitz 2006; Managed Healthcare 1994).
Despite extensive and increasing use,
however, little is known about how
billboards work, and academic research
is scarce (Woodside 1990; Fortenberry
and McGoldrick 2006; Taylor, Franke,
and Bang 2006) and seemingly nonexistent for the healthcare industry. Civen
increasing pressures for healthcare marketing officers to demonstrate a return
on advertising expenditures (Eudes
2006; Berkowitz 2006; Thomas 2005),
understanding if and how major types
of media work is essential,
Although all media possess
strengths and weaknesses, billboards
have a degree of immunity to the audience fragmentation, clutter, ad blocking, and attention span problems facing
other media. Audience fragmentation is
not an issue because the limited travel
routes in given communities concentrate exposure of billboards to mass
audiences. Additionally, technology that
blocks billboard advertisements is currently not available. Billboard advertisements also enjoy a relatively clutter-free
setting, as zoning ordinances limit their
proliferation (Lamar Advertising 2008;
OAAA 2008). Because of their nature,
billboard positioning and creative
treatments have always assumed short
attention spans. In addition, among the
major media, billboards offer the lowest
cost per thousand, a measure of the cost
LITERATURE
REVIEW
The neglect of academic research on
billboard advertising is often attributed
to the costs involved with enacting field
experiments, the preferred method for
studying the medium (Woodside 1990;
Bhargava and Donthu 1999; Fortenberry
and McColdrick 2006). Laboratory
experiments do not effectively replicate
the externalities associated with billboards, such as motorist attention to the
road, and other environmental distractions that take attention away from billboards. The extant literature focuses on
four main categories: history, art, policy,
and performance.
Research on tbe history of billboard
advertising focuses on the growth and
82
Is BILLBOARD ADVERTISING BENEFICIAL TOR HEALTHCARE ORGANIZATIONS?
influence performance, as reported in a
few performance-related studies discussed later.
The policy category is perhaps the
most developed ofthe four areas of
the billboard literature. Substantial
works mostly focus on the societal
benefits or detriments associated with
billboard advertising, and debates
between proponents and opponents of
the medium are commonplace (Taylor
1997). Billboard proponents frequently
emphasize the medium’s ability to
communicate information to travelers,
deliver customers for advertisers, and
increase road safety (Laible 1997; OAAA
2008). Billboard opponents, however,
contend that billboard advertisements
cause such undesirable consequences
as aesthetic pollution (e.g., roadside
clutter, excessive transmission of ambient light), environmental harm (e.g.,
damage to the environment when
vegetation is removed to place roadside
billboards), and motorist harm (e.g.,
billboard advertising distracts drivers
and contributes to vehicular accidents)
(Vespe 1997; Scenic America 2006).
Some also claim that the preponderance of billboards that advertise harmful products in minority communities
affects public health (Altman, Schooler,
and Basil 1991; Hackbarth, Silvestri,
and Cosper 1995). The conflicting
arguments of Laible (1997) and Vespe
(1997) perhaps best illustrate this
debate. One side asserts that the public
likes billboards, and the other claims
the public dislikes billboards, although
it appears that the public is never actually asked for its perspective. Despite
lengthy battles, this key question
remains unanswered.
TABLE 1
Comparative Costs of Various Media
Cost per
Ttiousand
Media
Television (prime lime)
Magazine
$30.45
•
$25.93
Newspaper
$12.24
Internet
$11.25
$9.69
Radio
Outdoor
$3.62
Source: Information based on estimaces from media experts
andOAAA(20U’)).
development ofthe medium; works by
Hendon and Muhs (1986) and Gudis
(2004) are excellent examples. Although
assumptions regarding billboard efficacy have clearly driven their development over the years, such performance
considerations are not a focus of these
historical accounts. They provide interesting accounts ofthe chronological
development ofthe medium but do not
analyze the performance characteristics
or related matters that would be helpful
in executive decision making.
Within the art category, the literature focuses primarily on photographic
collections of billboards; Fraser (1991)
and Heon, Diggs, and Thompson
(1999) are good examples. Such authors
often present the winning entries from
billboard artwork contests, providing readers with examples of creative
efforts. This area ofthe literature tends
to address creativity, rather than an ad’s
ability to generate a marketing return
on investment. However, there is clearly
much scope for creative treatments to
83
JOURNAL OF HEALTHCARE MANAGEMENT 55:2 M A R C H / A P R I L 2 0 1 0
OBJECTIVES AND
CONCEPTUAL FRAMEWORK
The literature on billboard performance is clearly the least developed,
and few academic studies have been
published. However, this area is of great
importance to institutions and media
planners because they need a close
understanding of the performance characteristics of billboards to make pmdent
judgments regarding their use. Most of
the work in this area has focused on
recall—that is, the ability of a consumer
to view an advertisement and remember
its message and other relevant characteristics. The studies of Hewett (1972),
Fitts and Hewett (1977), King andTinkham (1990), and Osborne and Coleman (2008) indicate that billboards are
capable of generating recall.
The primary objective of this research
is to gain insights into the performance
characteristics of billboard advertising in
the healthcare industry and thereby help
institutions make more efficient media
allocations. The sparse previous research
in nonhealthcare settings indicates the
following:
Several authors have focused on
how creative and spatial characteristics
affect recall. Studies by Young ( 1984);
Donthu, Cherian, and Bhargava
(1993); and Bhargava, Donthu, and
Caron (1994), for example, indicate
that roadway positioning, size of text,
use of color, and related characteristics
affect consumers’ ability to remember
billboard message content. A further
element of the billboard performance
literature focuses on the ability of
billboards to drive sales, although the
field experiments of Bhargava and Donthu (1999) are the sole independent
contributions in this important area.
The Outdoor Advertising Association
of America (OAAA 2009) compiled
case studies of billboard campaigns,
and Taylor, Franke, and Bang (2006)
surveyed management views regarding billboards. However, the efficacy of billboards remains seriously
underresearched.
•
Billboards generate recall (Hewett
1972; Fitts and Hewett 1977; King
and Tinkham 1990; Osborne and
Coleman 2008).
•
Creative and spatial applications
affect billboard advertising recall
(Young 1984; Donthu, Cherian, and
Bhargava 1993; Bhargava, Donthu,
and Caron 1994).
•
Billboards can drive sales (Bhargava
and Donthu 1999).
We aim to assess the impact of
billboards across what is known in the
advertising literature as the hierarchy of
effects, which is referred to herein as the
patient patronage sequence—that is, the
theoretical series of steps through which
consumers travel as they move from initial awareness toward making a decision
to act or buy. The concept that people
pass through a hierarchy or sequence
of stages in their progression from
awareness to action is well established
in advertising (Tellis 2004), consumer
behavior (Solomon 2007), psychotherapy (Prochaska and Norcross 1999),
and social marketing (Velicer, Rossi, and
Procbaska 1996). Knowledge relating
to the efficacy of billboards at different
stages in this sequence is of value to
84
Is BILLBOARD ADVERTISING BENEFICIAL FOR HEALTHCARE ORGANIZATIONS?
healthcare providers. More specifically,
we also test the efficacy of comer-tab
promotions.
Secondary objectives pertain to
billboard policy matters relevant to the
general debate (Taylor 1997) between
proponents (Laible 1997) and opponents (Vespe 1997) of this advertising medium. Specifically, we measure
whether patients view the medium
favorably and consider billboards
appropriate for marketing healthcare
services to help resolve the issue of
whether the public likes or dislikes billboards. A medium regarded as inappropriate or controversial could clearly be
detrimental to new business and loyalty.
Given the paucity of academic research
on billboards in general and its absence
in the healthcare context, the study further aims to close significant gaps in the
literature on advertising and healthcare
marketing.
The study draws on two conceptual
domains in examining the effects of
billboards: first their efficacy in promoting healthcare establishments, and
second, the perceived appropriateness
of the medium for healthcare promotion. For the first domain, we draw from
the literature on billboard performance
and the wider literature on hierarchies
and models of the effects of advertising
and construct scales to measure effects
on customer awareness, perceptions
of informativeness, and influence on
initial and return visits. For the second
domain, we draw from a selection of
the literature related to billboard policies, and then we measure attitudes of
patients toward the medium and its
appropriateness for healthcare advertising. Figure 1 shows the conceptual
and analytical framework of the study,
illustrating these two sets of influences
on new or returning patient visits.
FIGURE 1
Conceptual Framework of the Study
Efficacy:
Promoting Healthcare Facility
Patient Patronage Sequence
Raising/
Creating
Awareness
Appropriateness:
Attitudes Toward Billboards
Billboard Policy Debates
Conveying
Relevant
Information
Appropriate
for Health
Advertising?
Influencing Visits to the Facility:
First Visit >>>> Return Visits
85
Overall
Opinion of
Medium
OF HEALTHCARE MANAGEMENT 55:2
MARCH/APRIL
ANALYTICAL PLAN
AND METHODOLOGY
2010
The campaign represented a 133
gross rating point showing, which
indicates daily exposure levels for the
campaign at 133 percent of the population aged 18 years or older. This meant
that people in this age group were
typically exposed to the campaign more
than once per day, given the number of
billboards purchased. Willis-Knighton
Health System purchased nine bulletins (14 X 48-foot billboards) and
seven posters (12 x 24-foot billboards),
and these were scheduled mainly in
the month of October at a total cost
of $25,411. Figure 2 shows the creative treatment, including a corner-tab
invitation to telephone a “Flu Shotline.” This approach provided further
opportunity to assess performance
through direct monitoring of call
volumes.
To pursue these objectives, we designed
and implemented a comprehensive
analytical plan following the conceptual
framework depicted in Figure 1.
Field Experiment
Following guidance regarding the
preferred method for studying billboards, we developed an associated
field experiment with the cooperation
of a local healthcare provider. Specifically, our study tracked a 32-day billboard campaign by the Louisiana-based
Willis-Knighton Health System promoting its Quick Care urgent care centers
in Shreveport and Bossier City, an area
with a population of around 260,000
(U.S. Census Bureau 2008). Tbese
centers were well suited to the investigation, as urgent care needs occur at
any time and require a relatively short
decision process, usually within the
span of a typical billboard campaign.
Furthermore, these centers had not
been the focus of extensive advertising
in the past.
Questionnaire
To assess the billboard advertising campaign, we developed a self-administered,
three-section questionnaire that was distributed to patients on arrival at Quick
Care.
FIGURE 2
The Quick Care Billboard Advertisement
Source: Reprinted with permission from Willis-Knighion Health System, Shreveport Louisiana.
86
Is BILLBOARD ADVERTISING BENEFICIAL I-OR HEALTHCARE ORGANIZATIONS?
The first section focused on performance aaoss the patient patronage
sequence. The study context limited
questionnaire length and precluded the
use of multi-item scales. However, Rossiter (2002) and Bergkvist and Rossiter
(2007) show that single-item scales
can perform equally well for objects
“easily and uniformly imagined,” such
as billboards. After first establishing
whether the respondent bad noticed the
billboards, a seven-point scale adapted
from Havlena and Craham (2004)
measured change in awareness levels. A
scale of advertising informativeness was
built on a concept developed by Ducoffe
( 1995) and Smit and Neijens (2000).
For a later stage in the patient patronage
sequence, an extent of influence scale
was adapted from Cilly and colleagues
(1998).
The second section focused on the
billboard policy debate, and patients
were asked about the degree to which
they view billboards to be appropriate
for marketing healthcare services and
about their overall view of billboards.
The seven-point scale, which ranged
from 1 = very negative to 7 = very positive, was adopted from Krosnick, Judd,
and Wittenbrink (2005). This section
addressed the debate about whether
consumers like or dislike billboard
advertisements, and it appears to be the
first academic study, either within or
outside the healthcare sector, that seeks
consumer perspectives.
The third section included a series of
demographic inquiries, which permitted
us to investigate potential trends and
patterns associated with specific patient
groups and subgroups. Questionnaire development included two focus
groups, and furtJier qualitative methods
helped to interpret the results.
Sample
Over the course of the campaign, 2,380
patients came to one of the two Quick
Care locations for treatment. Of these,
1,640 participated in the survey, yielding a response rate of 68.9 percent.
Table 2 summarizes the demographic
characteristics of respondents, which
TABLE 2
Summary of Respondent Characteristics
(N = 1,640)
Characteristic
Respondent Income ($)
Under $10,000
18.2
$10,000-524,999
20.9
$25,000-$39,999
23.9
$40,000-$54,999
15.4
$55,000-$84,999
13.2
$85,000 and over
8.5
Mean income
$37,644
Gender
Male
37.0
Female
63.0
Age
Under 18 years
18-29 years
25.8
30-39 years
25.0
40-40 years
19.1
50-59 years
12.7
60 years and older
10.3
First Visit to Clinic
Yes
53.3
No
87
7.1
46.7
JOURNAL OF HEALTHCARI; M A N A G E M E N T 5 5 : 2 M A R C H / A P R I L
2010
dents. This supports claims by the advertising industry that billboards generate
significant attention and supports their
use by healthcare institutions. The overall difference between first-time visitors
and others is highly significant (Chisquare = 39.44, p < .001), with 65.4
percent of first-time visitors noticing the
billboards, compared with 79.5 percent of existing clients. Figure 3 shows
that the level of notice was consistently
higher among existing patients, which
indicates that billboards have potential for brand reinforcement. However,
the incremental gain over the first two
weeks was considerably greater among
those making a first visit, indicating that
were similar between the two Quick
Care locations. Female respondents
outnumbered males, but this was not
surprising as women are typically the
chief caregivers for dependent family
members. The respondents had a mean
age of 38.5 years and a mean annual
income of $37,644 (individual, not
household). Slightly more than half of
the respondents were making their first
visit to Quick Care.
RESULTS
Performance Characteristics
The propensity to notice billboards was
very high at 72.7 percent of respon-
FIGURE 3
Temporal Trends in Patients Noticing Billboards
85%80%-
^^^^^
1 75%-
E
CÛ
^
• •
70%*
g 65%-
*
•
*
*
60%-
*
First visit
— -No
• ••Yes
55%1
I
I
r
Week 1
Week 2
Week 3
Week 4
Week of Campaign
88
Last 4
days
Is BILLBOARD ADVERTISING BENEFICIAL FOR HEALTHCARE ORGANIZATIONS?
billboards also fulfill their (assumed)
primary role of attracting new clients.
Overall, the propensity to notice
the billboards increased rapidly
between weeks 1 and 2, peaking at
week 3, before declining to the end
of the campaign; this represented a
significant difference between the
weeks (Chi-square = 13.791, p < .01).
This parallels earlier billboard research
findings by King and Tinkham (1990)
and indicates the onset of advertising
wearout (Craig, Sternthal, and Leavitt
1976). The most powerful noticeeliciting period is in the initial weeks
of billboard campaigns.
Table 3 shows the performance of
Quick Care’s billboard advertisements
across the patient patronage sequence.
For awareness, an early-stage effect,
73.6 percent of respondents overall
reported a moderate or greater increase
in awareness resulting from the adver-
tisements. The enhancement of awareness is strong overall but significantly
greater for new clients (t = 2.96, p< .01).
At a later stage in the patient patronage sequence, 79.3 percent of new
and returning customers reported the
billboards to be moderately or highly
informative.
For degree of influence, a later-stage
effect, results were more evenly balanced
but remained supportive of billboard
use; 63.6 percent of respondents indicated that the Quick Care billboards at
least moderately influenced their visit.
The influence on new visitors was significantly greater (f= 2.70, p < .01), but
healthcare advertisers should not ignore
the extensive influence on returning
customers. The proportions indicating
lower influence come as no surprise, as
patients often patronize a clinic based
on referrals from medical practitioners,
insurance companies, and family and
TABLE 3
Performance and Policy-Related fVieasures
Measures
(Scale of 1-7)
Low%
(1-3)
Moderate %
Visit
Increased awareness
First
Informative
Influenced the visit
Appropriateness
Overall opinion
Mean
Score
/ value
(4)
High%
(5-7)
22.5
15.2
62.3
4.84
Other
28.9
15.2
55.9
4.48
2.96
( The physician value index is a metric that can help
hospital leaders understand the various levels of
“I think doctors are motivated to improve if they see objective data that
they are not performing as well as their peers. It is not necessarily a
financial incentive, but a patient care incentive that will motivate them.”
—Jack Lewin, CEO, American College of Cardiology (as quoted by
physician performance along the care continuum in
Goldman, E., “Pay-for-Pejformance Advocates Acknowledge Raws: If
terms of cost and quality.
Not Designed Carefully. Plans Can Warp Physician Behavior and Fail to
> The metric illustrates physician performance in the
Improve Health Care Quality. ” Internal Medicine News. Sept. l. t
context of an overall quality of care composite that
incorporates patient satisfaction, care outcomes,
patient safety, and hospital financial performance.
> Hospitals can use the metric to identify and leverage
the practices of top-performing physicians to
improve overall system financial performance and
patient quality of care.
Hospitals face unprecedented challenges today in preparing for healthcare
reform and regulatory requirements, an ever-increasing population of
uninsured, fast-rising supply and device costs, and even more rapidly
shrinking reimbursements. These challenges exert pressure on hospital
leaders to drive profitability and maintain high-quality care. And they force
hospital leaders to rethink their approach to rescue and protect margins.
Hospital executives now find that ineremental performance improvement
no longer works. What they want is an innovative business model that will do
more than just help them weather the storm. They want to put an absolute
end to shrinking margins and position their institution for sustainability
and profitability.
Hospitals now have a tremendous new opportunity with the prospect of
developing accountable care organizations (ACOs), as outlined in the
Affordable Care Act. The goal of this aspect of the legislation is to integrate
hospitals and physicians by holding them jointly responsible for quality and
cost of care. The ACO model simply encompasses a patient care continuum
that includes the hospital, primary care physicians, specialists, and potentially other medical professionals. Innovative hospitals are taking the lead to
develop coordinated care systems that embody the core principles underlying ACOs. They have come to view physicians as partners and collaborators
in this enterprise.
92
FEBRUARY 2011 healthcare iinancial management
The biggest challenge for hospital leaders in
today’s post-reform era is aligning clinical and
financial goals without undermining qualify of
care. Many healthcare providers helieve that
quality of care and cost of care are conflicting ends
of a spectrum—success with one is at the expense
of the other. This attitude mirrors that of the U.S.
auto industry in the 1970s and 1980s, until
Japanese competitors proved them wrong. The
lesson came at a high price: The U.S. lost dominance in the global automotive market.
and low risk of mortalify, which resulted in a high
cost of care and low qualify of care. The physician
Yet achieving ACO status and a high level of over- would likely be much more receptive to this
all performance depends on absolute clinicalapproach, especially if he or she is also presented
financial alignment, which begins with successful with other physician data reflecting a comparahle
physician integration across the care continuum.
patient mix but with a lower cost and higher qualify.
Because physician decisions and actions impact
70 to 80 percent of the hospital cost structure,
In short, hecause of their training, physicians
leaders need to address the question, “Do we
typically are much more likely to be persuaded by
really understand how to engage physicians to
research and facts. When faced with a holistic
align their interests with ours?”
view, backed with data, they are much more likely
Innovative hospital systems know
that the best way to gain physician
buy-in for change is by showing
how clinical processes affect
financial performance.
To hegin to answer this question, hospital executives should first identify problems, prioritize
them, and analyze root causes to make changes
that will yield the greatest impact.
Talking Change with Physicians: Storytelling
or Hard Facts?
If physicians resist clinical process change, it is
often hecause of how the case for that change is
presented to them. The usual approach to communicate with them is project-based and anecdotal. For example, hospital executives may cite
the fact that a physician is using a high-cost hip
implant associated with an average length of stay
of five days but the hospital still has a higherthan-average 3o-day readmission rate. The
physician is unlikely to accept such anecdotal
data and will probably respond with a common
rehuttal: “These patients were sick and had a high
risk of mortality.” The physician may also question the statistical significance of the sample.
Instead, the hospital administrators should have
presented the physician with a statistically significant sample (including confidence intervals) of a
specific patient case mix with no complications
to respond enthusiastically. Innovative hospital
systems, therefore, know that the best way to gain
physician buy-in for change is by showing how
clinical processes affect financial performance.
Knowing what’s required, do hospitals have
“actionable insight” for productive communication with physicians? Traditional decision support systems offer only department-centric
information, creating silos and many versions of
truth. Without patient-, process-, and outcomecentric intelligence, hospitals lack transparency
and predictability around cost of care and qualify
of care by physician, diagnosis-related group
(DRC), facilify, and other dimensions.
Consider these four questions:
> Do you measure and report cost and qualify to
demonstrate value along many dimensions?
> Are you confident in your abilify to analyze
raw data on cost and qualify thoroughly and
correctly?
> Does your current analysis show physician
impact on hospital performance from qualify
and cost perspectives?
> Are the analytical processes institutionalized,
repetitive, and continuous?
M m a . o r g FEBRUARY 2011
93
FEATURE STORY
A “no” to even one of these questions indicates a
need for greater preparation before you pursue an
integrated or ACO business model. Any effori
lacking a system perspective will be viewed as just
another “consulting program ofthe day” and will
not have a lasting impact. A hospital can build
trust with ACO stakeholders only by clearly showing the quality and cost of care by episode, facil ity, physician, DRG, and other dimensions.
using cost and quality as the basis for the analysis,
it becomes clear which changes will improve cost
without sacrificing quality, or improve quality
without adding cost.
Where do physicians exist in the care continuum
in terms of quality and cost? Strategic physician
integration should be founded on a clear understanding of physician performance levels along
the care continuum if it is to succeed. Thepfijsieian value index is a dynamic and comprehensive
set of metrics that can help hospital leaders
achieve this understanding.
The physician value index is predicated on a comprehensive, systemwide analysis of quality-of-care
metrics. Every quality measure from each system
(e.g., clinical, operational, and ancillary) is collected and classified by impact on key performance
indicators (KPIs) related to considerations such as
safety, outcomes, and process. The KPIs are
assessed systematically to determine the impact on
physicians. All measures are then rolled up to provide an aggregate score of quality of care by physician by DRG, as is shown in the exhibit below.
Then, to develop a physician value index, healthcare leaders map the quality-of-care scores for
physicians and DRGs against cost of care.
This metric set illustrates physician performance
in the context of overall patient satisfaction and
hospital financial performance. With this frame
of reference, hospital leaders can begin to measure how specific actions by physicians within and
across DRGs can directly impact overall system
financial performance and quality of care. Ry
The Physician Value Index
Visually, the physician value index is a matrix in
which top-performing individuals appear in the
upper right quadrant, and low-performing individuals appear in the lower left quadrant. The
X axis represents performance along quality of
care. The Y axis shows performance in terms of
A Strategy (or Physician Integration
QUALlTY-OF-CARE METRICS BY PHYSICIAN
Surgeon
Count Total
Cost
$16,158,209.55
Average
Cost
1
1
1
Satisfaction
Average
Ouality
Structural
Safety
Process
60%
70%
89%
57%
83%
72%
Outcome
Total
720
97175
147
j $3,247,510.41
$22,091.91
62%
71%
89%
58%
79%
72%
91926
65
‘ $1,415,563.12
$21,777.89
55%
70%
90%
57%
85%
71%
91975
55
$1,226,759.59
$22,304.72
55%
68%
88%
57%
79%
69%
96196
55
$1,026,767.31
$18,668.50
63%
70%
88%
58%
76%
‘ 71%
97244
44
$979,691.42
$22,265.71
57%
70%
87%
57%
82%
71%
91305
43
$1,
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