March 25, 2014

This is a vignette of how one home health agency handled a competitor that was giving extravagant gifts.  The names of the agencies have been changed.

Home Health Care Agency A had ongoing concerns about a competitor that was giving extravagant luncheons and  gifts larger than the OIG will permit. Medical professionals had actually commented to Home Health Agency A that they did not provide gifts at nearly the same level. Agency A wrestled with tough decisions such as whether to report the competitor, whether to adopt similar illegal marketing tactics and assume the legal risks, or whether to launch a major physician education program to teach physicians about the rules surrounding gift receiving. When Agency A ordered their second home health market intelligence report, they quickly knew exactly what to do. Studying the total census of their market and the census of their home health competitors, Agency A learned that this gift-giving competitor was much smaller than Agency A, and the competitor was not growing. In other words, all the gift giving was a waste of the competitors’ marketing dollars. Through market intelligence reports, Agency A saw that they did not need to respond to the gift giving competitor at all.

When considering what to do about gift-givers, try to size up the market as step one.  Most responses to this sort of behavior (i.e. reporting them, matching them, telling doctors they shouldn’t be taking those gifts) present an inherent risk.  There is no sense in taking those risks based on a false assumption that the gift giving is a good marketing strategy.  Just because a couple of referral sources have told you they like the gifts, does not mean the strategy is actually increasing referrals for the competitor.  Having the real market data will help marketing planners avoid false assumptions.