With policy makers working to drive down the cost of healthcare, we can expect continuing pressure on the bottom line – even for the types of providers that tend to be cost-savers overall.  Knowing which of your marketing tactics are the real performers will help home health agencies and physical therapy practices manage their budgets more effectively. In a separate article, "Measuring Marketing Effectiveness," we describe one of the best ways to do this. In this article, we describe the most popular errors that home health agencies and physical therapy practices are making nationwide.

Methods that Do Not Work:

Asking "How Did You Hear About Us": This is not a bad practice except that most agencies and practices over-interpret the results. For businesses that have any sort of name recognition in their own community, this question only tells you how the customer looked up your number or the very last marketing impression they remember. The conventional wisdom is that it takes 12 advertising impressions to achieve a sale. Leading a referral source to a referral is a process of building name recognition, trust, motivation, top-of-mind awareness, and education. Most customers are not even cognizant of the process in its early stages.  Asking them to explain to you the complexities of their own motivations with "How did you hear about us?" will yield answers that neglect the reality of the whole sales process. (For a better understanding of this process, also read "Sales vs. Marketing")

Buzz Detection: Waiting for doctors to tell you that your ad prompted a referral. This happens infrequently, and it is not normal consumer behavior.

Any Census Other Than Annual: Watching monthly or daily census counts or watching visit per week counts can be misleading. As referrals increase, these measures show a tendency toward inertia (i.e. Salaried PTs in outpatient physical therapy have a tendency to deliver fewer procedures per visit and fewer visits per patient when they feel busier. Home health case managers and DONs have a tendency to discharge earlier when the referrals to staff ratio increases.). In short, visit counts and most census measures are metrics that combine marketing effects with non-marketing considerations.  As combined-reasons metrics, these metrics muddy the waters unnecessarily when you are trying to measure marketing effectiveness.  The exception to this rule is annual census, since this measure will rise and fall with referrals regardless of length of stay considerations.

Waiting for It to Feel Different: Seeing if it feels like you have more referrals is unreliable.  We once had a home health client in Texas refuse to count his referrals, insisting that if they had gone up, he would notice. He also declared that his referrals had not increased in the year.  Eighteen months later, we obtained two of his annual cost reports from Medicare and saw that his unduplicated annual census went up 50% in the year in question. Small businesses prove naturally adept at absorbing increases in referral volume, and sometimes in ways that are not profitable.

Counting New Referral Sources: The single, most counterproductive misconception that established providers have is that loyal referral sources have no room for growth (and therefore should be excluded from most marketing considerations and measurements). This misconception leads some home health agencies and some physical therapy practices to measure marketing effectiveness by looking through their rolls for the names of new referral sources.  The fact of the matter is that even the most loyal referral sources probably are not sending as much as they could or should if the agency or practice does not have a sterling top-of-mind awareness / referral source education program.  This also means, that when a business implements a new marketing strategy, known referral sources are often the earliest responders.

 

Instead of the methods above that produce misleading results, home health agencies and physical therapy practices should rely on effectiveness measures that quantify: change in rate of new episodes, change in rate of growth, change in market share, and competitor comparisons.