Marketing is the entire process of discovering the needs and wants of your customers (the referral sources), communicating internally to create offerings that address the needs of the customer, and communicating the value of your offer to your customers. When it comes to the last part, communicating your value to your customer, you have sales (“home health marketers”), advertising, public relations, viral marketing, and other possible avenues. Home health marketers usually ranks as the single most expensive impression you can make on a doctor or case manager. Newsletters, advertising in specialized journals, postcards, reminder items, etc. can cost up to $2 per impression. Even a sales rep who sees 300 referral sources per month easily costs $10 per impression.

Ideally, the salesperson / home health marketer gets to focus his or her efforts on the hardest part of the sales process, closing the sale. “Closing the sale” means giving a prospect the last little push he needs to commit to a transaction (i.e. start referring the patients you want). Many small businesses also use the home health marketer to build name recognition, work towards top of mind awareness, position the agency against the competition, educate referral sources, and build credibility. Managers need to keep in mind that they can accomplish these last five objectives with other, less expensive marketing methods (i.e. advertising).

It should be noted that Brazzell Marketing Agency has at least three clients that have never created a formal outside salesperson position and that, nevertheless, have the largest home health census in their counties. For those managers using or considering sales people, put yourself in the doctor’s position. Imagine that you are buying life insurance. You are considering a policy from MetLife vs. HSBA. You never heard of HSBA until you met the salesperson. Everything you’ve learned about HSBA is the word of this salesperson and the information he typed on a sales sheet. All things being equal, most people lean toward MetLife because they “know” the company. How do they “know” MetLife? Snoopy says “It pays.” He says it on TV, radio, print ads, and internet. MetLife has more credibility with consumers because they use a consistent, diversified marketing mix, not just sales people. Do you back your home health marketer with advertising and/or public relations, or is your salesperson all on his own out there? To get the maximum possible return on the most expensive impressions you make on referral sources (the sales visit), first warm up the referral source with other marketing and then support your salesperson with follow-up marketing.

“I send referrals to the last person who brought me lunch.”

Providers hear statements like this when they have failed to differentiate themselves from everyone else with the same license to practice.  Physicians resort to irrational reasons for making healthcare decisions (i.e., forcing patients to pick from a list of unfamiliar names or sending referrals to the provider that employs a fellow golfer).  Successful marketing differentiation generates referrals from both familiar and new sources.  Differentiation gives the doctor a rational reason to name one provider before the next.

Furthermore, when a provider gives the doctor a way to articulate how it differs from the competitor, the doctor actually feels more inclined to share the information and make more referrals.  Imagine that you bought a new convertible.  You are satisfied with it, but, in your perception, it does not do anything differently from any other convertible.  You probably would not go out of your way to tell people about the vehicle.  However, suppose your convertible had a safety feature that automatically launches titanium roll bars out of the back when the car tilts more than 45%, and experts showed your convertible was safer in a roll over than most hard tops.  You would be much more likely to point this feature out when the topic of cars comes up.  (By the way, this is the Volvo C70 – I just couldn’t resist telling you.)  Take advantage of this natural human reaction.  People who think they know a secret or news want to share the secret or news.

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Four Steps to Effective Marketing Differentiation:

1. Choose from whom to be different: In general, businesses should try to differentiate themselves from their largest competitor or the largest group of competitors that could be defined in one way.  Effective differentiation will garner for your practice a percentage of the competitor’s referrals.  In general, the larger the competitor, the more you can take from them.

New home care agencies in hyper-competitive markets like to say that what differentiates them is that they are caring, compassionate, and that they show-up.  Some agencies say they will provide services but do not show up as scheduled.  However, saying your difference is that you actually show up for the visits does not follow rule one above.  The agencies that do not show up for scheduled visits are not the largest competitors.  These agencies do not have the loyalty of doctors or patients.  Therefore, comparing your agency to them gains you nothing.  You have to describe why a doctor would use your agency instead of the one he or she already likes.

2. Choose and Prove Your Difference: You may decide to position yourself as the only independently owned practice in the region or as the provider most likely to achieve good and efficient outcomes.  Today’s consumer is rightly skeptical.  It is no longer enough simply to say something, you must offer evidence.  If you are the most caring, tout your satisfaction surveys.  If you get great outcomes, tell them that you can resolve diagnosis X in only Y visits.  Yesterday, if one were to tell you, “Volvo means performance and safety,” your initial reaction might be, “that’s just hype.”  Now that you have read some evidence toward that assertion, you are more likely to give the assertion some credibility.

3. Connect Your Difference to a Benefit: It is not enough to say that your agency is two decades old or that you have 361 offices in 12 states, because you leave the doctor to draw her own conclusions from the facts.  Draw the conclusions for them.  Tell them that you have grown and prospered for two decades and this proves both your experience and your quality of care.  Draw conclusions that are larger than the evidence provided.  Do not just say that your nurses have training in Wound Vac®.  Say that your nurses’ specific training in Wound Vac® serves as just one example of the agency’s experience with advanced wound care techniques.

4. Repetition, Repetition, Repetition: After choosing a difference and a benefit, providers must repeatedly communicate these ideas to referral sources.  The more a person hears the same message, the more likely the person is to remember and use that information.  Establish and maintain methods for repetitively putting your message in front of referral sources.

Market positioning is arranging for a brand to occupy a clear and desirable place, relative to competing brands, in the minds of target consumers.  Medical professionals are overloaded with information about products and services.  They cannot re-evaluate providers every time they make a referral decision.  To simplify referral decisions, doctors and case managers organize providers into categories in their minds – they “position” you relative to your competitors.  A brand’s position is a complex set of impressions, feelings, and knowledge that referral sources hold for each provider.  Whether you have a market positioning strategy or not, if the referral source cares about your practice at all, you will be positioned.  You do not want to leave your market position to chance.  Implement a market positioning strategy that will give your brand the greatest advantage in your market.

Think of your market position as a more comprehensive concept than each singular sales strength.  For instance, BMW may have softer and more durable leather than Volkswagen.  This is a sales strength that adds to the larger concept that BMW is the luxury sports car.  A home health agency that has a directly employed therapy team may position itself as the “home rehab agency” to differentiate themselves from the other agencies promoting nursing first and therapy second.  This is not to say that one good sales strength might not be a good positioning strategy.  A home health agency that gives twice the number of visits per episode compared to its competitors might position itself as “providing more care.”

If you want to occupy a position already occupied by a competitor, this can sometimes be accomplished by further refining and defining the position itself.  For instance, two competing hospital affiliated programs may want to position themselves as institutional and well-established.  Spoils would go to the competitor that would further define that position as institutional and the best qualified (frequently listing the certifications and higher degrees on staff).

Market positioning strategies that run counter to the truth don’t work.  The concept that marketing lets you pick a weakness and say the opposite is a common, counterproductive myth.  For instance, in the 80s, Ford attempted to position itself as an American producer of quality cars with the catch phrase “Quality is Job 1.”  However, a host of recalls and general discontent with product quality caused this marketing effort to miss with consumers.  After decades of advertising, it took a few years of actual improvements in quality for Ford to achieve the somewhat unexciting 2010 accomplishment of a 7th place ranking in perceived car quality.

Referral-based health care providers should constantly be thinking about how to improve their services next.  A good market positioning strategy can guide that planning.  For instance, if your physical therapy practice has positioned itself as the one with a hands-off approach to maximize patient self-efficacy, advertising new manual therapy certifications or pain relieving modalities might undermine your positioning strategy.  A better strategy might be to advertise certification in a new, ball-based dynamic stability program that would add to the hands-off market position.

Because market position is a dance with the competition, it is appropriate to change the strategy periodically in rapidly changing markets.  An agency that responded to referrals in 24 hours may have positioned itself as the fast one.  In large markets, however, many home health agencies now respond to referrals in two to four hours.  If the 24-hour agency can’t get faster, it needs to change its market positioning strategy before it gets positioned as “the agency that used to be fast.”

Employing a market positioning strategy can synergistically enhance your other marketing efforts and entrench your positive place in the minds of your referral sources.

For busy administrators and practice managers, an easy mistake to make is failing to execute a strategy because you are planning something better or, worse yet, something perfect.  This is especially applicable for small practices with tight budgets.  Healthcare procedures often need to be conducted perfectly.  Business procedures are different.  Business procedures need to be conducted profitably.

If not now, there was probably a time in recent memory when you had a business procedure planned, and considered delaying it, because you thought you could do it better, later.  “Could I potentially do this better if I had more time?” is not the question busy executives can afford to ask themselves when reviewing marketing plans.  The correct question is often, “Is this better than nothing.”

Common situations in which administrators and practice managers should be asking themselves “Is this better than nothing?” include:

• You have designed your brochure, flyer, business cards, or website yourself, but you haven’t printed/published your work.
• You’re planning a newsletter, but the mail list is not yet perfect.
• You could launch a new care path specialty now, but you know that your care path will be even better six months later when something else happens.

Sometimes, the answer is legitimately, “Doing nothing would be better than doing this.”  If a promotional piece was designed so poorly that it would reflect negatively on your business, then no, it’s not better than nothing.  If the strategy in its current state would achieve no effect with your target audience, then no, it’s not better than nothing.

However, if you are looking at a marketing activity that could produce additional referrals for your practice without compromising reputation, it’s usually better than nothing.  Don’t choose nothing when you could choose something productive.

The title of this bulletin, “Better than Nothing,” may sound negative.  In life, people often shrug their shoulders when saying this – essentially saying they don’t like something.  However, when running a small business, one can confidently say, “It’s better than nothing,” in a tone of affirmation.  In marketing, “It’s better than nothing” means it will do good.

Welcome to our online magazine, the BMA – AdVisor. This free service from Brazzell Marketing Agency, is dedicated to sharing marketing success strategies specific to referral-based health care providers (like the types of providers listed above).  We recommend that you first get a subscription so you will receive periodic notifications about new material at the AdVisor.  It’s free.  Enter your email in the blank on the right and click the button.

By the way, did you know that one health care provider in Virginia doubled new patient referrals in just 90 days?  If not, you should visit our website to learn how, for free, no obligation.  Click Home Health Care Marketing or Physical Therapy Marketing.

Brazzell Marketing Agency promotes a marketing strategy for referral-based health care providers.  This includes home health care, physical therapy, and hospice.  Based on an initial success experienced in 2001 and two other doubling or near-doubling successes reported in later years, Brazzell calls their marketing strategy “The Referral Doubling Strategy.”  Brazzell provides a free presentation explaining exactly how to conduct the strategy, but only to verifiable health care providers who are not in competition with Brazzell Marketing Agency clients.  Health care providers can request the Referral Doubling Strategy presentation from this page of the company website:
http://brazzellmarketing.com/HomeHealth.htm

In 2010, Brazzell Marketing Agency gained the ability to obtain all Medicare cost reports for home health, hospitals, skilled nursing facilities, and hospice.  Brazzell uses this information to offer The Brazzell Report for home health market analysis.   Having almost all home health cost report information has given Brazzell Marketing Agency new opportunity to perform more thorough analysis of the ongoing effectiveness of “The Referral Doubling Strategy.”

The study completed in early June compares eight home health agencies using the Referral Doubling Strategy to 16 comparison agencies.  Comparison agencies are either direct competitors of the strategy agency or in the same geographic region.  Researchers chose comparison agencies that were as close as possible to the same size as the strategy agency.

Positive results seemed equally likely for home health agencies in both urban and rural settings.  Positive results also seemed equally likely regardless of the size of the client.  Clients realizing positive results ranged in annual census from  50 to 5,892 patients.  The most current and comprehensive review possible for this marketing strategy justifies the name, “The Referral Doubling Strategy.”

Lewis Morris, Chief Counsel to the Inspector General, who issued the opinion on electronic referral systems.

On May 20, the Office of the Inspector General (OIG) released an advisory opinion that calls into question discharge referral systems currently in popular use by hospitals and home care agencies.  Automated, electronic referral systems have recently grown in popularity.  Hospital discharge planners use these systems to input the details of a patient being discharged with post-acute care needs.  The details are then electronically distributed to post-acute care providers such as home health, home care, hospice, rehab facilities, assisted living facilities, etc.  Many hospitals award the referral to the first post-acute provider indicating acceptance of the referral.

An unnamed entity requested an advisory opinion from the OIG regarding this business arrangement.  The OIG’s advisory opinion against the arrangement is based solely on the information provided by the requester and relevant law.  The requester stated that post-acute providers such as home health care agencies must pay fees for inclusion in the system, and that some home health agencies find the fees unaffordable.  The requester stated that the system could fax referral information to agencies not paying for access to the electronic referral system.  The requester also stated that post-acute care providers paying for access to the electronic referral system would receive information much more quickly and would have a much greater likelihood of being the first to respond.

The OIG Advisory Opinion No. 11-06 found that such a system would present more than a minimal risk under the anti-kickback statute.  Referred-to-entities may not pay for preferential treatment from referral sources – even if such payments go to a third party.

The Anti-Kickback Statute & Safe Harbor
The anti-kickback statute makes it a criminal offense to knowingly and willfully pay to induce referrals for services reimbursable by a federal health program.  Criminal liability applies to all parties involved in an anti-kickback violation (i.e. the referral source, the referral recipient, and the software vendor).  Violation of the statue constitutes a felony punishable by a maximum fine of $25,000 and five years imprisonment.  Conviction leads to automatic exclusion from federal healthcare programs including Medicare and Medicaid.

Referral systems such as the type described above are not automatically illegal.  In fact, the law contains a safe harbor from the anti-kickback statute to allow referral systems under certain conditions (42 C.F.R. subsection 1001.952).  Among those conditions are requirements that referral fees be assessed uniformly against all participants, be based only on the cost of operating the referral service, and not vary with the volume or value of referrals of Federal health care program business.  However, the recent OIG advisory opinion seems to say that referral systems allowing members to pay for better access to referral sources are illegal.

Providers of Electronic Referral Systems
Automated referral system companies include AllScripts, Curasspan / eDischarge, and Total Living Choices.  Of the three, Total Living Choices (www.corp.tlcchoices.com) claims to operate an “open-access” system wherein they do not require providers to pay a fee to be included in electronic discharge systems.  We have learned that the requester of the OIG advisory opinion was Total Living Choices.  Curaspan president, Thomas Ferry states that he has double checked with their law firm Choate, Hall & Stewart, LLP, and that he believes the OIG advisory opinion is not applicable to Curaspan (http://connect.curaspan.com/).  On May 23, Ferry made a written response to the OIG opinion [click here]. In short, Ferry has stated that the Curaspan system lists profiles for both paying members and non-members.  Non-members may update their profiles free of charge.  It is up to the discharge planners to show choices to patients and help patients make informed decisions about post-acute care.  This would suggest that in the Curaspan system, patients choose a home health agency while at the hospital and a referral is made.  Ferry’s written response goes on to state that the Curaspan system sends faxes to non-members in a timely fashion.  Ferry explains that discharge planners must “verify” fax numbers before they can send the faxes, but the extent to which this barrier prevents non-members from getting announcements is unclear.    Curaspan’s discussion of faxes alludes to the fastest-response-gets-the-referral system described in the OIG opinion, and suggests that Curaspan users may conduct referral placement this way as well.   The question of legality would seem to hinge on whether the system truly puts non-members on an equal footing with paying members in terms of being able to respond quickly to hospital announcements and whether the system is bought or sold with the intent of giving paying members an advantage in garnering extra referrals.  We could not find a public statement from AllScripts, and we are presently requesting additional information from them.

What home health agencies and other post-acute care providers should do now:

1. Connect with Total Living Choices [click here] and Curaspan [click here] since both companies seem to be saying that you can update your profiles with them for free.
2. If you are paying subscription fees to referral systems, review the terms under which you subscribed to those systems.  Make sure there is no suggestion that you subscribe to systems for the purpose of paying for greater access to hospitals.  The OIG opinion seems to suggest that the only valid reason to participate in electronic referral systems to is to gain the internal efficiencies associated with electronic health records / electronic care coordination.

Hospitals and other providers using electronic systems to send referrals need to review procedures to make sure they are not party to violations of anti-kickback statutes.  Fastest-response-gets-the-referral systems should only be used if paying and non-paying providers have an equal chance of responding to your announcements.

Download the full OIG Advisory Opinion No. 11-06 here:  http://oig.hhs.gov/fraud/docs/advisoryopinions/2011/AdvOpn11-06.pdf

Penalties for violating rules governing gifts:

• Civil monetary penalties up to $100,000 if a gift is found to have as its principal purpose the intent to ensure referrals
• Repayment of Medicare or Medicaid payments related to Stark violations
• Exclusion from Medicare and Medicaid programs
• Filing a Medicare or Medicaid claim in violation of the Stark Law constitutes a “false claim” which could trigger liability under the federal False Claims Act.

In 2009, the OIG set a maximum allowable gift value of $30 per gift and $355 per year to each referral source (not to be confused with the $10 per gift / $50 per year maximum on gifts to Medicare / Medicaid beneficiaries).  Unfortunately, simply counting the retail value of incoming gifts is not enough to keep healthcare professionals in the clear.  There are some stipulations under which any gift would be unacceptable.  If gifts of any value are construed by inspectors to be given with the intent of ensuring referrals, this would be a violation.  If gifts of any value are found to have a proportional relationship with referral volume, this would be a violation.  There are some exceptions, but free food often counts as gifts.  Services such as continuing education credits can count as gifts, and their retail value must be considered.  Cash equivalents can be instant Stark violations.  Gift cards and gift certificates may be considered cash equivalents and could be an instant Stark violation regardless of value.

Since someone else’s opinion of your intent related to gift giving can make the gifts an instant violation, gift giving can be a bit of a gamble as a marketing strategy.  Furthermore, ensuring that gifts are given in a way that is not proportional to referral volume is almost impossible where significant gifts are concerned. Simply giving gifts to all your active referral sources while neglecting inactive referral sources could be construed as paying for referrals.

How Investigations Get Started:

Investigations into illegal inducements typically begin with a complaint against a particular provider.  Competitors, disgruntled employees of gift-recipients, and disgruntled employees of gift-givers prove the most likely complaint sources. The complaints can be completely anonymous.  The OIG, CMS, or their delegates typically investigate these sorts of violations.

Reminder items such as pens, mugs, and calendars can be valuable marketing tools.  Brazzell Marketing Agency now designs and prints promotional magnets which usually steer clear of gift giving rule violations.  Use these guidelines to make sure that other marketing activities stay within legal boundaries.  Bear in mind that, in home health and physical therapy, the best marketing strategies usually revolve around constant improvement of quality of care combined with consistent communication with a broad base of referral sources.

Decision Health White Paper Directory: http://homehealthwhitepapers.decisionhealth.com/
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Business always has been and always will be about “What have you done for me lately?”  From the way you respond to your employees to the way your referral sources respond to your company, a success this quarter always overshadows a success from a year or two ago.  Constant improvement and change ultimately increases referrals, but only under certain circumstances.

If a provider wants referral sources to base new referrals on anything other than personal relationships or corporate allegiance, that provider must differentiate itself in its community.  Sometimes, differentiation can be as simple as being the one that does the most physician education or the most physician courting.  However, in today’s highly competitive home health market, further differentiation is usually required to gain the competitive advantage.

Providers sometimes attempt to differentiate themselves with exciting descriptions such as, “pioneering,” “more caring,” “heroes,” “premier,” etc.  Administrators should bear in mind that unfounded claims will have a greater effect on the general public than they will on referral sources.  Doctors will be looking for proof of marketing claims.  In physician oriented literature, if one states that the company is a pioneer, one should also explain what new ground that company broke.  For the best effect with referral sources, blend exciting descriptions with factual support.

The question becomes for each owner and administrator, “What factual truth makes me a better choice than my competitor?”  Common ways to differentiate one healthcare provider from the next include:

• Associating your company with a highly respected brand or institution
• New programs
• New equipment
• Clinical outcome measures
• Specialized training
• Awards
• Satisfaction surveys
• Improved methods for interacting with referral sources

A scheduled effort to make tangible improvements to services on a regular basis will help protect a provider from the occasional successes of competitors.  Brazzell Marketing Agency clients have ongoing access to advice about changes that are working in other markets.

For healthcare providers, the constant improvement and constant change can help garner new referrals only under one condition. Providers must make referral sources aware of their services and advantages.  Retail has the fantastic, inexpensive tool of in-store promotion.  Grand Home Furnishings, for instance, never clearly advertised that they now carry less expensive furniture, but droves of buyers walk in the store and see that Grand has expanded its product lines.  Referral-based healthcare providers, on the other hand, must reach out to referral sources in a deliberate and repetitive manner.

Marketing statements on fax cover sheets and promotional inserts with mailed correspondence can help improve lines of communication with current referral sources.  Providers must open and maintain lines of communication to effectively reach and motivate the occasional or inactive referral sources.  The communications strategy should seek to make as many impressions as possible short of becoming annoying.  Marketing efforts occasionally have perfect timing.  The rep walks in an office on the very day that the competitor irritated the referral source.  More often, however, the referral source needs to be able to remember your marketing message at a later date.  This requires ongoing repetition.

Brazzell Marketing Agency specializes in the communications needs of referral-based healthcare providers.  Communications ideas are scattered throughout the Popular Services Page of the Brazzell Marketing Agency website [click here].  Paid consultation services to evaluate and brainstorm about communications plans are also available.