As Hospital Margins Narrow, Here Are 3 Ways Marketing Can Improve the Payer Mix

by Jason Skinner, Chief Marketing Officer - 08/15/18



With hospital margins under increasing pressure, attracting commercially insured consumers — as well as those who influence their healthcare decisions — is more critical than ever.

Change is in the air. By 2024, the largest payer in your hospital’s mix will likely be Medicare, according to research from the American Hospital Association. This is significant, as Medicare typically pays around 80-90 cents on the dollar as compared with commercial insurors. As a result of these declining reimbursements, a  2016 report from the Congressional Budget Office (CBO) concludes that more than 40% of hospitals could have negative margins by 2025.

This steady march toward lower margins was advanced on July 25, when CMS released its 2019 Medicare Outpatient Prospective Payment System (OPPS). Among the proposed hospital reimbursement changes, CMS would reduce the payment rate for hospital outpatient clinic visits provided at off-campus provider-based departments to 40% of the OPPS rate.

The good news is that increasing your hospital’s private payers by even one or two percentage points can make a significant difference.  As a marketer, here are a few things you can do to move the needle on profitability.

Collaborate With Employers

Creating a strategic partnership with local employers can foster brand awareness and trust by paving the way for your hospital. This can include co-branded events and promotions that foster employee health while gleaning insight on local health issues and connecting the workforce with your wellness tools and medical services.

A few of the most effective workplace initiatives include:

  • provide annual flu shot clinics
  • sponsor or offer on-site health screenings or a health fair staffed with your facility's medical personnel
  • provide educational lunch-and-learn programs about common medical conditions, such as diabetes or sleep apnea, that can drive patients to specific programs at your hospital
  • help employers create incentive programs, such as HSA reimbursement or organizing healthy challenges in which the winner receives a gift card. Design the program to encourage employees to take advantage of healthcare services.

Identify Your Best Patients

Data analysis and predictive modeling tools have made it easier for marketers to pinpoint potential patients by location, demographics, income, insurance status and a number of other qualifiers. Hospital marketers can use this information to develop targeted content and campaigns.

Either through email or social media, marketers can remind patients to come in and be screened for conditions such as prostate cancer, breast cancer or orthopedic issues. You can also promote specialties that often have more commercial payers than Medicare or Medicaid, such as obstetrics/gynecology and emergency medicine.

This approach to data-driven marketing enabled one health system to generate nearly 1,000 orthopedic procedures in 10 months. People who were most likely to need treatment for joint or spine pain received highly targeted direct mail and Facebook ads, visited the campaign site, and many of those people chose to make appointments. As this example illustrates, investing more in analytics, digital, and social marketing—as well as the demographic research that allows your hospital to target specific populations to whom these screenings or services are more suited—pays off.

Fully Engage Referring Physicians

Referring physicians can track their referred patients to evaluate each payer mix that’s represented. Ideally, the referrals represent a diverse mix of payers. If too many patients referred from one physician have Medicare and Medicaid and that doctor treats many commercially insured patients, it would be wise to investigate why this is the case.

Once your market's referral patterns are well defined, work to engage referring providers through content that adds value both personally and professionally. This requires sharing information that speaks their language in a concise format — an approach proven to drive volume according to Gallup, which found that fully engaged physicians gave the hospital an average of 3% more outpatient referrals and 51% more inpatient referrals than physicians who were not engaged or who were actively disengaged. 

The bottom line: By taking a collaborative approach to developing content, you can educate employers, physicians, and consumers about the advantages your organization provides—and ultimately get them to choose you when the time is right.

We're Here to Help Boost Your Margins

True North Custom works with 500+ healthcare organizations to develop content strategies that drive brand and revenue growth. Find out how we can focus your marketing and support your service line growth strategies.

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Topics: Content Strategy, Healthcare Industry Insights & Trends

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