Changing Payer Mix for Hospital Helps Yield 1200%

A major hospital client of ours faced increasing financial pressure due to hospital payer mix. We developed a long-range strategic plan that helped make them one of the most successful pediatric integrated healthcare delivery systems in the county.
Our healthcare regional marketing efforts yielded a 1200% ROI for the system. Brand equity increased among desirable customer segments more than 35%. Payer mix improved with a 25% affinity increase among desirable patient segments and a 50% affinity decrease among less desirable patient segments. And most notably, the organization realized a single-year financial performance increase of more than 30%.

Hospital systems are complex organizations made up of other hospitals, physician networks, home healthcare companies, health plans, foundations and more. To keep the whole system stabilized and running smoothly, we provided a long-term, fifteen-year vision that all of these entities could endorse and support.

Some of the issues that we addressed in addition to changing the payer mix were corporate culture and capacity in a number of key areas of operation. We also implemented an annual, whole system planning program to drive the budgeting procedure and to detail the system’s strategic implementation of the vision.

Our integrated planning process begins with an exhaustive research effort among customers, influencers and enablers. Then we do a comprehensive report showing the impact of competitors, market forces and economic trends on the system’s current and potential efforts. We fielded corporate culture, performance attitudes and organizational communication assessments. Then, we facilitated the system’s visioning and whole system strategic planning efforts.

The resulting plan called for significant improvements in the performance of individuals and departments. We completed a 360˚ leadership evaluation based on the organization’s key performance indicators and implemented a proven competency modeling platform for hiring, selection and succession planning. We identified key areas of opportunity for organizational learning and change management. And we re-engineered the system’s planning, business development and marketing departments – establishing brand standards and running the day-to-day marketing and business development operations for the first year.

We developed an employee engagement plan which included events, promotions, improvements to systems and processes as well as a number of organizational learning opportunities. Our healthcare regional marketing campaign also included radio, television, print, out-of-home, events, sponsorships and media relations.

With this plan, we successfully attracted more of the higher-paying and insured patients which helped to counter balance the amount of uninsured emergency patients, creating a more profitable payer mix. The vision was endorsed and supported by all of the constituencies involved and the new environment now encourages employee retention and recruitment.