With healthcare reform at the forefront right now and healthcare costs on the rise, it is a necessity that the healthcare industry uses every technology at its disposal to cut waste and maximize resources.
So without entering the fray on the larger question of reform, let’s explore how something as common and widely accepted as CRM technologies are being employed to improve marketing, improve care and reduce costs.
Physician Targeting in Pharma
Historically, most pharmaceutical companies marketed through physician targeting by assessing the number of total prescriptions and new prescriptions each physician wrote per week data purchased from information vendors. The physicians are then “deciled” into 10 groups based on their prescription writing patterns. Higher-decile groups—those that have prescribed highly in the past—are then targeted for more promotional calls.
This traditional strategy sounds logical enough—and it is culturally ingrained in most organizations—but there are several problems with it:
- It does not ask the important “what if” questions. Is there greater potential elsewhere? Is the scenario changing over time? Are there lower-decile prescribers who represent strong potential value? Which ones? How do we best reach them?
- It offers no real competitive advantage. Most companies with a competing product in the same therapeutic area target the same physicians based on lists from the same or similar data sources. As a result, no company generates any proprietary insight, and high-decile physicians get saturated with unwelcome sales calls.
It does not account for the collective past promotional activity that may have created the top decile. Could it be that the top decile received 10 times the promotional activity as the second tier?
Beyond this, some companies have experimented with newer data sets, such as managed care and patient-level data, but grappled with integration issues that made it difficult to gain a complete view of physicians and their prescribing practices. Still others paid premium fees to outside consultancies to periodically crunch the numbers and generate physician target lists for them.
Analytics are being used to reveal why physicians have prescribed in the past and to predict future prescribing in holistic context.
All of these strategies have benefits, limitations, and constraints—just the cost of business in the prosperous days of blockbuster drugs, unchallenged patent protections and huge sales forces. Things have changed. Pharma companies are now being driven to base sales and marketing decisions on deeper analytical insights using predictive modeling.
To identify the most promising targets, it is not enough to know that a physician had been a high prescriber in the past. Pharma companies need to answer the questions listed above and develop proprietary insights that can be leveraged for competitive advantage. Analytics are being used to reveal why physicians have prescribed in the past and to predict future prescribing in holistic context—not just “if they did this in the past, then they’ll surely do this in the future.” The use of analytics allows the exploration of data from various sources to predict trends based on a multitude of factors, not just on prior prescribing behavior.
For the companies that have endorsed this strategy, the early results are very positive:
- One company identified and targeted physicians that wrote 460,000 more prescriptions than the top decile, generating a 7 percent lift and a market value of $27 million over four months.
- Another company targeting an analytically derived population delivered 3.9 million prescriptions compared to 3.3 million over a previous six month period, 19 percent better than results achieved by the traditional high-decile focus.
- A third company determined that results for the launch phase of its new product in a new market could have been 37 percent higher had an analytically detailed target list had been used.
Results such as these are driving pharmaceutical marketers to re-examine the way physician targeting is done and to own this differentiating intelligence.
Disease Management: Sticking to the Plan to Stay Healthy
Chronic illnesses account for the majority of US healthcare expenditures. Such conditions as diabetes, congestive heart failure, depression and asthma push healthcare costs higher through repeated hospitalizations and emergency room visits, poor medication compliance, and failure to stick to treatment plans. Such illnesses could be managed—and real cost savings achieved—if insurers and providers would concentrate care management resources on ensuring that those at risk do what they’re supposed to.
Ultimately, plan success or failure is up to the member. Disease management plans depend on members—patients—to hold up their end of the agreement by making and keeping appointments, staying on schedule with medications, etc. To more strongly influence outcomes, many plan management organizations are now exploring ways to remind and influence members to stay in compliance. Specifically they are using targeted messages and methods of communication: CRM.
Communicating with disease management plan members is similar to any marketing communication. Instead of purchasing new jeans or opening a credit line, the desired outcome is plan compliance. The first step is to understand the preferences and profile of the individual member. That means going beyond basic contact information and plan details to analytically derived behavioral or medical insight.
Instead of purchasing new jeans or opening a credit line, the desired outcome is plan compliance.
Let’s say an analysis shows that members with chronic diseases who have mental health co-morbidities are far costlier than expected. The same analytical models marketers use to predict customer behavior can also anticipate which population is most likely to be non-compliant with their mental health prescriptions. Using this insight to trigger targeted communications to encourage people to remember their meds will reduce overall cost.
As another example, analyzing response and compliance rates based on segments of the plan population could suggest plan improvements, or at the very least more targeted communications. Lastly, if analytics are used to predict pending issues, such as the population segment likely to relapse and be readmitted, you could target communications addressing high-cost issues before they occur.
Although not considered a chronic disease, the H1N1 flu virus represents a perfect situation in which targeted communications could help. For example, since pregnant women are among the highest at-risk segments, why not target them specifically, alerting and instructing them on what to do?
Harkening to still other CRM best practices, communications with plan members can be improved by pinpointing the right time and frequency for contact and the member’s preferred channel. Members could be required respond to reminder communications acknowledging that they have taken their medication or completed whatever action the plan called for. Factors such as age, gender, or location could be used to improve and target messages to maximize response rates and ultimately plan compliance.
Marketing campaigns provide a much higher return on investment when executed with timely and relevant communications. Communications in a disease management program require the same precision. Capturing and analyzing the results of member interactions, then, can do far more than improve individual communication methods. By analyzing and reporting the overall plan and its performance, at a high level as well as a very detailed level, you’ll know which segments of the population are in compliance, why, and what possible avenues show promise.
CRM Technology Can Help
Leveraging the behavior and preferences of customers to drive targeted communications is a premise well understood in marketing. This same premise is on the rise in the health care industry, both for pharmaceutical marketing and intensive care management of diseases.
There are challenges to overcome, but CRM technologies are well positioned to play a significant role in improving the marketing capabilities of pharma companies as well as lowering the cost of healthcare by contributing to improved intensive care management plan compliance.
Copyright © 2009 SAS Institute Inc., Cary, NC, USA. All Rights Reserved.
