By Paul Spiegelman
For many hospitals with internal call centers, the question of outsourcing the operation to an outside company is often a difficult and uncomfortable notion fraught with many considerations. The core business for hospitals is delivering care, not operating a call center. They are used to having control over a locally run operation. Yet many hospital marketers and strategic business planners are realizing that what was once thought of as “the cost center that provides physician referral services” is now a profit center that is critical to long-range business planning and downstream revenue generation. To that end, hospitals are re-evaluating the best way to maximize the call center opportunity and operate in a cost-effective manner.
Community Health Network (CHN), based in Indianapolis, is a good example of thinking big to maximize its call center investment, serving as a best practice for other healthcare organizations struggling with planning for their call centers. CHN is one of the largest integrated healthcare delivery systems in Indiana with more than 60 facilities and 8,500 health care professionals.
CHN began its call center in the late 1980s by enabling callers to discuss health care questions with registered nurses, get referrals to network physicians, and register for classes. By the early 1990s, the system’s business development staff began to challenge the call center to look at new services – live, online nurse chat, warm transfers to appointment setting, and more. Following a due diligence process that examined strategy integration, resource distribution, and measurable outcomes, the decision was made to end the popular nurse-staffed model.
Jack Frank, CHN’s Network Vice President of Business Development, said phone calls had decreased by 22 percent and warm transfers also had experienced significant declines. “We had hit the cusp in terms of trying to maintain the appropriate level of staffing and remain cost effective,” he said. “Detailed analysis of callers revealed that many sought information from us and then went elsewhere for care. We knew if we jettisoned the clinical advice line and focused more on physician referrals and moving toward a customer contact center model, rather than a call center model, we could realize a significant savings in the labor dollars we were spending on the 27 RN call advisors.
In 2002, CHN made the philosophical change to end the consortium that managed the call center and create a contact center that would be a critical component of its overall marketing efforts. That May, CHN issued a request for proposal for an outside vendor to manage its new vision for a contact center. Frank explained that the system was looking for a consultant with whom it could work to redefine its approach to customer relationship management and introduce innovative ways for their customers to access information. “We had developed our own applications and we needed to find the right company that shared our vision of redefining customers’ experience in the healthcare environment,” he says.
CHN developed five primary objectives for selecting a vendor with whom to partner:
- Capable of directing callers to nurse advisors when appropriate.
- Able to manage fulfillment potential.
- Capable of providing physician referral services for acquisition and retention strategies.
- Able to manage class registration.
- Capable of leveraging cross sales opportunities.
CHN’s request for proposal outlined seven focused goals for potential vendor partners to address:
- Increase revenue to affiliated physicians in the network.
- Increase brand awareness.
- Enhance the patient experience.
- Grow market share.
- Employ customer relationship management philosophy.
- Enhance employer of choice position.
- Deliver positive financial impact on the entire network.
Frank says that knowing CHN’s vision and being able to articulate specific objectives for the customer contact center were key factors in its decision about an outsourced partner. “We wanted to work with someone who shared our vision of wanting clients that weren’t just customers, but partners.”
Today, CHN executives say they are delighted with the results from its partnership with their outsourced call center. “In 18 months since we began our working relationship, we have documented a 45 percent reduction in direct operating expenses related to the call center,” Frank says. “Working with our CFO, we developed a financial impact analysis that showed net revenue of $20 million to our system from patients that initially called the call center. This involved identifying specific patient information, tracking it through our database for total utilization of services by each caller, and calculating the total charges related to the utilization. We took gross charges and subtracted direct and indirect costs based on contractual allowance estimates of what we would eventually receive in reimbursement. That translates to an average amount of $1,200 generated per access point in the system. We are now tracking individual patients who contact us using this model for a 12-month period. We have finance staff and the CFO engaged in a process to evaluate impact and return on investment calculations with solid data. We are much more aligned in how we evaluate the return on investment for CHN’s customer relationship management activities.”
CHN is an organization who is ahead of its time as far as its vision of how consumers would use the Internet to interact with the organization. “We knew that we had to have an overall change in our culture – we wanted to move from episodic interactions with patients to long-term relationships,” Frank says. “The old call center tracked individual encounters that didn’t do anything to nurture an affinity between callers and our system.”
One approach CHN has used to strengthen the tie with current and potential patients is the “My Community,” affinity program. “When an individual logs onto our website, he or she is offered a variety of services, including online nurse chat,” Frank explained. “However, in order to access this and other enhanced services, we ask the individual to become a member of ‘My Community,’ our member’s only consumer portal. We collect some basic personal information that will enable us to personalize that individual’s future interaction with us. Our goal is to become the person’s healthcare provider for life.”
Future plans for CHN’s customer contact center include a personal health navigator for each person who contacts the healthcare system, disease management protocols including health screening reminders, and preventive health information. Frank summed it up this way, “Our vision and goals for the customer interaction center are the same today as they were three years ago. My advice to those organizations facing a crossroads with their call centers is to do your homework before choosing an outsourcing partner. Have a clear vision for your call center and know specifically what you are looking for in a partnership with an outsourced vendor. Our decision to focus on our CRM strategies, rather than how to ‘fix’ the call center has proven to be a strategic differentiator for us. Our outsourcer has been by our side the entire time.”
Paul Spiegelman is CEO of The Beryl Companies, provider of call center outsourcing services to the medical community.
[From the February/March 2005 issue of AnswerStat magazine]