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What role has technology played in the evolution of marketing in healthcare? To what extent has the Internet changed the way markets are organized?

These approaches allowed the provider not only to micromanage the marketing effort but also to customize the approach for specific target audiences. The ability to cross-sell, up-sell, and induce repeat sales offered a significant advantage over standard advertising approaches. These approaches also ensured ongoing communication with customers and prospective customers and kept customers involved with the organization.

The most recent stage in the evolution of marketing on the part of provider organizations is Internet marketing. This development in itself reflects a number of stages. While initially serving an information-and-referral function, provider-sponsored web sites have evolved beyond an inventory of services to offer a range of interactive functions that encourage two-way communication between the provider and its customers. Not only does the Internet serve as a mechanism for attracting attention to the provider, but it also offers a means of keeping customers engaged once they become a part of the system.

The rise in healthcare media and the interactive technology of the Internet com- bined to create an informed consumer who was more empowered with infor- mation than at any other time in human history.

Despite their presumed scientific orientation and interest in advancing their practices, many physicians are reluctant to even consider new technology. Physicians tend to be risk-averse in this regard and resistant to anything that requires a change in practice operations. Because they already feel sensory overload, the thought of a major new initiative is overwhelming for most of them. Furthermore, a surprising number of physicians, especially older ones, suffer from computer phobia. They did not grow up with computers; even if they concede the potential, they are aware of horror stories from other practices that had negative experiences with IT.

Physicians also typically take a hands-on approach to their patients—that is, they want to have their medical records in hand when addressing patient needs. The thought of interjecting a computer between doctor and patient is alien to many of them. There are also concerns over the confidentiality of electronic patient records; these concerns have only been heightened by recent enactment of HIPAA (Health Insurance Portability and Accountability Act) regulations. Physicians are also put off by the cost of IT, especially when they virtually never budget any funds for such expenditures. Even though most technology purchases could be financed on reasonable terms, the sticker shock experienced by physicians deters many from thoughtful pursuit of possible solutions.

Physicians also serve as customers for a variety of organizations providing support services, including billing and collection services, utilization review companies, medical supply distributors, biomedical equipment companies, and biohazard management companies. Physicians are also customers for information technology vendors who sell or service practice management systems, imaging systems, and electronic patient records. Physicians have traditionally been the primary customer for pharmaceutical companies. The lengths to which pharmaceutical companies will go to acquire physician loyalty to their drug lines are legendary.

They are customers for a wide range of support services, from billing and collections to physician recruitment to marketing. By virtue of providing food service, gift shops, and parking services, hospitals are customers for a wide variety of non-health-related goods and services. Hospitals and other healthcare facilities are heavy consumers of information technology and are major customers for information technology vendors and consultants.

The healthcare technology available to a society has a significant influence on the consumption of health services. Other factors that influence the utiliza- tion of health services should be noted; however, these are of less importance to the marketer as they are generally outside the control of marketers or even healthcare administrators. These factors include technological developments and structural factors such as reimbursement arrangements, availability of facilities and services, and extant practice patterns of healthcare providers.

Advances in technology usually lead to higher levels of utilization of the services supported by the new technology. Indeed, some operations, like laser eye surgery, could never have been performed without certain technological advances. Thus, the availability of certain types of technology to providers is a controlling factor with regard to the services that can be performed. Technological advances have contributed to the shift from inpa- tient to outpatient care and facilitated the emergence of home health care as a major component of the industry. The effect of technology has been particularly felt in the area of diagnostic testing in recent years. The vari- ety of tests that can be performed has increased dramatically and includes the expanded use of home-testing procedures.

The marketing techniques that appear to be gaining momentum in healthcare can perhaps be divided into techniques that involve organiza- tional changes and those that are technology based. The former implies an innovative approach at a conceptual level, and the latter involves the application of technology to either traditional or innovative marketing techniques.

The most common problem with implementing successful CRM pro- grams is the fact that many organizations confuse a CRM strategy with a

technology implementation. While technology is a great enabler and health- care systems should be leveraging technology to do more with their cus- tomer-driven initiatives, implementing technology is not the same thing as having a CRM program. The most important aspects of a true CRM ini- tiative lie in how the organization as a whole defines its customers, iden- tifies and segments their needs, and organizes around serving them in the most efficient and effective manner possible. Healthcare organizations need to balance the value they provide to customers with the value they generate for the organization itself.

Marketers should first identify the goals most important to the orga- nization; these should lead the internal planning and implementation efforts. Some of the more common goals and objectives for developing and imple- menting technology-driven customer relationship programs include the following:

• Improving customer service and satisfaction

• Increasing profitability

• Reducing the number of negative customer experiences

• Allocating resources more efficiently

• Reducing the cost of customer interaction

• Attracting and retaining customers and prospects

• Staying in front of customers, and building stronger relationships

over time

• Improving clinical outcomes

Among the emerging techniques that take a different approach to the organization are direct-to-consumer marketing, business-to-business marketing, internal marketing, and concierge services as a marketing strat- egy. Emerging technology-based techniques include database marketing, customer relationship management, and Internet marketing. Techniques that involve information technology and intensive use of data have tremen- dous potential for healthcare but remain controversial in many ways. The enactment of HIPAA legislation has made many healthcare organizations gun-shy even when it comes to legitimate uses of personal health data.