NCPA - National Center for Policy Analysis

Hospitals Mine Their Patients' Records In Search Of Customers

February 13, 2012

Hospitals are increasingly using direct mail campaigns to help pitch their most lucrative services, such as cancer, heart and orthopedic care.  They are also buying detailed information about local residents compiled by consumer marketing firms -- everything from age, income and marital status to shopping habits and whether they have children or pets at home, says Kaiser Health News.

  • Hospitals say they are promoting needed services, such as cancer screenings and cholesterol tests, but they often use the data to target patients with private health insurance, which typically pay higher rates than government coverage.
  • At an industry conference last year, Provena Health marketing executive Lisa Lagger said such efforts had helped attract higher-paying patients, including those covered by "profitable Blue Cross and less Medicare."

While the strategies are increasing revenues, they are drawing fire from patient advocates and privacy groups, who criticize the hospitals for using private medical records to pursue profits.

One of the biggest pluses for hospital executives is that they can track a campaign's financial success by comparing the amount of services used by targeted consumers against those in a control group with the same demographic and economic characteristics, but who are not sent mailings.

  • When the Henry Ford Health System promoted mammograms last year in mailings to 30,000 women aged 40 or older, more than 5,700 responded -- 304 more than in the control group.
  • The mailings generated $268,000 more in profit than the control group -- a return of more than four to one on the cost of the campaign, says Denise Beaudoin, vice president of customer engagement.
  • Mercy Health Partners in western Michigan sent a targeted cardiac screening mailing last year to 7,450 people.
  • That resulted in 1,729 patient visits, or 7 percent more than in a control group.
  • The campaign, which cost about $10,000, generated about $1 million in revenue and about $50,000 in profit.

Source: Phil Galewitz, "Hospitals Mine Their Patients' Records In Search Of Customers," Kaiser Health News, February 5, 2012.

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