Cover Story: Doctor, Heal Thyself
Every year, nearly half of all 309 million Americans visit a new doctor. About 40 percent of those patients find physicians on their own; whereas, the other 60 percent trust their current doctors to provide good referrals.
That's where PracticePlus LLC comes in, according to Hughes Bakewell, president of that new subsidiary of Woodbridge, N.J.-based 1-800- DOCTORS: "Very few physician practices—whether they're a part of a hospital or whether they're in independent practice—promote their capabilities to the people that give them the majority of their business, each and every day: referring physicians."
That's why two years ago, Meridian Health—a healthcare organization in New Jersey that was trying to solve this problem—came to 1-800- DOCTORS with the idea of enhancing physician-to-physician marketing. The health system had tested an idea and thought 1-800-DOCTORS could commercialize it.
Enter Bakewell, 1-800-DOCTORS' general manager of consumer services, who now also runs PracticePlus. PracticePlus teamed up with Balihoo—a Boise, Idaho-based local marketing automation product and service provider—and performed more tests with Meridian. With the second opinion firmly in hand, PracticePlus took the plunge last year with a soft-launch of a branded version of Balihoo's platform called "WordOut." The hard launch came in the second quarter of 2011.
As of presstime, PracticePlus has 10 hospitals signed up, a dozen in the pipeline, and expects 25 to 75 to contract with it by the end of the year. That count doesn't include hospital-owned or hospital- affiliated practices—which PracticePlus expects to be hundreds in the next couple years.
"As these health systems are buying practices, one of the things they struggle with is [when] the practice says, 'Well, how are you going to help me grow my practice?'" Bakewell says. "'Now that you own me, what are you going to do to help me get new patients in the door?'
"And most health systems and hospitals have very, very time-pressed staffs," he continues. "They've got way more to do than they have time to do, and this additional marketing requirement is making them all say, 'How the heck am I going to do this?'"
WordOut to the Rescue
"We're going after what we refer to as 'patients on the move,'" Bakewell says. "There are about 140 million first-visit appointments made each year, and it's growing pretty significantly as the population is aging."
Bakewell says 1-800-DOCTORS is already firmly in the minds of "self-referring" consumers. So PracticePlus will pursue the other 60 percent of annual referrals.
"When we go to a health system, we want to get both … the health system, and have them use this platform to market their own employed physicians," Bakewell says. "And that's going to become increasingly important because hospitals, as you probably have read, have been snapping up practices right and left because of [healthcare reform] and the changes in where healthcare's going."
Health systems are motivated by changes in the market to ensure patients stay with them "from cradle to grave," so they're acquiring practices so they can take care of all patients' needs in one place, he says.
That means the first challenge of introducing the product to hospitals is synergistic—PracticePlus has to clearly differentiate itself from 1-800-DOCTORS' marketing methods.
First of all, the main channel the WordOut platform uses is direct mail, not telephone lines. Second, it's primarily a B-to-B application, rather than a B-to-C.
"The platform has the ability to do emailing, faxing and then, if the practice wants to get into … direct consumer, it has all the consumer tools that Balihoo has," Bakewell says. "You can do radio, print, TV, outdoor, etc.
"But what's interesting is that we've learned what works far and away the best [for doctors] is good, old-fashioned direct mail," he continues. "And there's a reason for that." Physicians say they get so many emails now, they don't even open them. Similarly, the fax machine is running 24 hours a day.
"The reason direct mail works is because there's very little physician-to-physician, colleague-to-colleague direct mail right now," Bakewell says. "A physician practice will get lots of direct mail. But it's typically directly from the hospital, vs. a doctor at the hospital. Or it's directly from a pharmaceutical company or some back-office supply company or whoever it may be. What we do with these pieces, we make it very clear to whoever's screening the mail for that practice that this is a colleague-to-colleague piece of communication. Because they rarely see it, they think to themselves, 'This is probably important,' and it gets past that gatekeeper and gets into the physician's hands."
Bakewell extends those time considerations to mail piece design as well: "The second thing that we do is we make sure that we design the pieces so that the physicians can quickly and easily determine whether that communication has relevance to them."
WordOut's Bedside Manner
"It's funny," Bakewell says. "People talk about direct mail [and say], 'It's kind of passé.' And, 'It's all about electronic.' And, at least in our case, that's not true."
Granted, the halcyon days of general practitioners running into specialists in the hospital cafeteria and discussing the latest developments in kyphoplasty—a damaged vertebrae repair—are generally gone. But that doesn't mean physician-to-physician marketing is devoid of the personal touch.
"When we sign a practice up, we do a poll of their practice management system and get an understanding of what their referral base is," Bakewell says. "And then we put together a report on their penetration by specialty and by geography."
Often, of course, the specialty has far more potential than it has realized.
"Typically, they may be getting referrals from just … 15 [percent] to 50 percent of the referring physicians in the market," Bakewell says. "So there's … untapped opportunity there.
Bakewell says they talk to practices about what they're doing during the next year. "They may have a new office they're opening. They may have a procedure that they're doing that's a new procedure—that's a leading-edge procedure. They may have new equipment the referring physician would want to know about."
This consultation leads to the creation of a marketing calendar. A typical one may include eight physician-to-physician communications during the year.
Then PracticePlus personalizes the WordOut templates, or the practice can do so itself by uploading logos, physician signatures and facility photos. For instance, the practice can modify copy in the templates for a new doctor.
"Then they're able to pick who they send it to," Bakewell says. "So they're still at their keyboard. We've got all of the referring physicians by geography and by specialist. And it's typically … referring physicians or primary care physicians or OB/GYNs or internal medicine docs. But specialists can refer, too. And they can pick, 'OK. I want to send this piece to all primary care physicians, OB/GYNs and internal medicine docs within these six counties.' It'll tell them how many records that is. It'll tell them the cost to do that—from production all the way through fulfillment, mail house, etc.
"And then they can click 'send' and the database is picked, the piece accompanies the database and it all goes to a print production and mail fulfillment center to send out," he says. "So that can be done in five minutes or less. Typically at 25 percent of what it would cost them at that quality level to do it if they retain an agency."
WordOut on the Street
The only reason PracticePlus hard-launched last year was the tests not only functioned well, they produced results for doctors, Bakewell says.
"The first one's an orthopedic surgery practice," he explains. "It's a 15-physician, three-office practice. They're actually opening up two offices this year—so they are very healthy and are growing at a very quick clip. But they've got a lead physician who is very aggressive and very growth-oriented, very competitive. And this represented an opportunity for him to get the word out … to referring physicians in his area so he could drive market share."
So, two years ago, this orthopedic surgery practice that's affiliated with Meridian used WordOut to create an introductory brochure, announcements about the new office and a scholarship.
"They did an overview of kyphoplasty, which is a minimally invasive repair to damaged vertebrae profile," Bakewell says. "And then they did a new physician announcement."
He says in that test year alone, the orthopedic surgery practice saw "spectacular" results. A total of 191 new referring physicians came in.
"So 108 direct new referring physicians were directly attributable to the mailing," Bakewell says. "Let's just assume, conservatively, that each one of them referred one patient. The average value of an orthopedic surgery patient or orthopedic patient is about $1,200. So that's about $130,000 in revenue, just to the practice. And that's to the practice—the health system realizes significant incremental revenue beyond that, for each patient."
It costs the practice $6,000 a year to license WordOut. Bakewell says if the practice sends mail to 1,000 people, it probably spends a total of $7,000.
"So you're looking, very conservatively, at 10-to-1 ROI in this particular case," Bakewell says.
The second case study may not set off any bells, but it may mean a steady heartbeat for the practice.
"This is a cardiac surgery practice," Bakewell says. "So, again, a very important practice to the health system. And their goal, really, was to stabilize and maintain practice volume. Cardiac surgeons—typically, across the country—have been under enormous pressure over the last three or four years due to declining reimbursement from payers. And due to the fact that a lot of their procedures that were their bread and butter, higher value procedures like bypasses, are being replaced by things like stents and drug therapies. ... So they're kind of getting double whammied."
The practice needed to stabilize the patient: itself.
"They executed five campaigns in the first year," Bakewell says.
After the five mailings—an introductory brochure, an endoscopic vein harvesting procedure profile, a minimally invasive mitral valve replacement profile, an atrial fibrillation procedure profile and a holiday greeting card—the practice saw five new referring physicians.
"A cardiac surgery case is $25,000-plus," Bakewell says. "All in, to the doctor, it can be $5,000 each. So if each of those docs referred two new patients within a year, that's $50,000 to the practice. If, again, you make the same assumption about the $13,000 to $15,000 that they're paying, it's a 4-to-1 ROI. Again, conservatively."
A less tangible, but still real, result for this cardiac practice is that referring doctors are now aware that they can send heart surgery patients to a local hospital, rather than telling them to go to New York or Philadelphia.
"These doctors are nationally known. Nationally renowned. Heavily published. Top schools. Board certified. And they wanted to let referring physicians in their market area know that they're doing very leading-edge procedures," Bakewell says. "They did not need to refer their patients 80 miles away and their families for a traumatic big surgery, multi-day hospital stay. They could just get tremendous care right within their own market."
Doctor, Sell Thyself
Doctors were perhaps the last holdouts among professionals, Bakewell says. They just weren't marketing themselves—until now.
"They couldn't do what we do before," he says. "They just couldn't afford it. That's one of the biggest reasons. Very few agencies do practice marketing. The only ones they'll do it with are typically people who are doing elective procedures who can afford to do major brochures."
Plastic surgeons, for instance, already market directly to consumers.
But among the other physicians who are marketing, many of them are spending their money in all the wrong places. PracticePlus fixes that, Bakewell says.
"I mean, some of these practices —they're grossing $25 [million], $30 million a year," he explains. "They're doing virtually no physician-to-physician communication. Some of them are trying to do consumer; you'll see the billboards and occasionally you'll see the TV or hear the radio—whatever. Hardly any of them are promoting their capabilities to where they get the majority of their patients everyday, which is referring physicians. So that's why we think this is working so well."
Besides that, he says, the hospitals that are offering the products and services of PracticePlus to these physicians are seeing another benefit. "It's a loyalty tool for a health system with affiliated—some call them voluntary—not-owned practices," Bakewell says.
And he thinks healthcare providers will stay loyal to PracticePlus, too.
"Health systems are a notoriously difficult … prospect to go after, because everybody wants to do business with them because they can aggregate," Bakewell explains. "They're typically multi-billion dollar organizations. They've got a lot of buying power. And they enable you to get to doctors, which everybody wants to do."
But, he continues, "going doctor-to-doctor is something that's very hard to do profitably for any business. ... Because of the fact that we've been at it on the 1-8OO-DOCTORS side for several years, because we have a absolutely amazing group of advisory board members. … We've got a bit of an advantage in that it's going to be hard for somebody else to break into that group of prospects easily."