A STUDY ON CUSTOMER RELATIONSHIP MANAGEMENT PRACTICES IN HOSPITALS

By
Dr. K. Elangchezhian
Ph.D. HOD MBA
D. Malmarugan
BE, MBA, (PHD)
Research Sholar
Vellore Institute of Technology, Deemed University
Vellore
E-mail : mal_sal@rediffmail.com

INTRODUCTION :

Faced with mounting pressures to contain cost and mandates to adopt continuous quality improvement process, the health care industry is actively engaged in relationship marketing and partnering activities.

Customers relationship management (CRM) which has overriding significance for any business is no less significant for hospital services (Salam, 2000). Hospitals are most important elements in any health care delivery system. A hospital plays a major role in maintaining and restoring  the health of the people.

Care of the sick and injured, preventive health care, health research, and training of medical and paramedical staff are general broad functions of a hospital. It involves to the outpatient and inpatient hospital services and on many occasions emergency medical services. An important resource in a hospital is a human resource. This should be particularly emphasized. This should be particularly emphasized in the content of a hospital since relationship of medical staff plays important role in treating patients - the hospital customers.

In health care, CRM practices are essentially patient - focused strategies that involves effective management of hospital interface and interaction with patients. Effective CRM practices in a hospital  may mean providing services related information to a patient very quickly. Responding to the patent appointment and an admission requests promptly, dealing with patient queries and complaints expeditiously, exercising all kind s of flexibilities in serving patients to the patients.

EXISTING THEORIES :

The relevance of relationship marketing in health care has been widely recognized (Cassidy 1993; Dunn & Thomas 1994; Narduetal 1994; Macstrainc & Denning, Paul; 1986; Paul; 1988; wagneretal (1994) discussed the relevance of relationship marketing programs, integrated marketing communication strategy and data base marketing for developing a favorable image leading to improved hospital  performance. Based on Demming's principles of  total quality, Doyle and Bondrau (1989) advocated hospital supplier partnerships as a means to improve productivity, to control cost and to improve quality of care. They suggest that long-term relations with suppliers based on trust, service and effective coordination could lead to efficiency and improved performance 

Dunn & Thomas (1994) draws clear distinction between transaction selling and offering partnership solution to customer problems and advocated partnering with customers with a hierarchy of corporate buying - selling model.

Several marketing practices that attempt to establish, develop or maintain cooperation & collaboration with customers & other marketing providers are included under the general rubric of relationship marketing.  This include after marketing activities (Voura 1992) one to one marketing (Pepper & Rogers 1994) membership programs (including frequent buyer incentives) cross - distribution arrangements, cross - selling co - production, co -  branding, channel partnership logistics sharing, special supply arrangements (including special sourcing and JIT arrangements) business alliances, data base marketing etc., (Sheth & Parvatiyar 1995)

RESEARCH METHODOLOGY :

The research method used was secondary sources of data. Research articles and case studies of CRM practices in hospital were analyzed.

This arrangement could be broadly classified into three types of relationship marketing practices.

1). Programs that are aimed at customer retention.

2). Programs that involve special supply and delivery arrangements with other health care providers and key suppliers

3). Relational partnering programs to leverage the resources of others.

Customers retention programs may include such activities as after marketing & post treatment satisfaction services, frequent user benefits, patient focused care programs, data base maintenance, support for ongoing relationship with customers.

For instance at GNRC hospital Guwahati, GNRC relationship plan (GRP) was introduce in December 2000. This scheme announced that each rupees spent at GNRC was to be counted as a loyalty point. For each point so earned and accumulated the patient would received 5% incentive price on  his / her next billing. The loyalty points were to be freely transferable and redeemable  at any time. The loyalty incentive coupons were landed out while the bills were settled in addition a computerized record was also kept  of these customers to generate periodical Statements.
     
Special supply and delivery arrangements as just in time supply preferred vendor programs membership in healthcare networks integrated delivery system, cross, selling, Mutual referral of service and health care providers
   
The GRP of GNRC hospitals encouraged word of mouth referrals two. Thus if GNRC patient referred the hospital to his or her friends/relatives, he or she earned 200 points that could be redeemed at the time of payment/settling the hospital bills. Each suggestions given by the GNRC guests/patients was also rewarded with an incentive worth 50 points. The objective of the GRP was to link pricing with relationship. It was to encourage repeat grist's encourage patients to recommended other friends and relatives induce more referrals and to thank the existing customers for their percentage.
    
When hospitals are interested in leveraging the resources of their partners they may engage in, joint marketing/training programs, joint product/process development cross distribution arrangements, logistics/facility sharing, co-providing services, joint ventures and alliances.

Friends of GNRC (FOG) scheme health care providers are dependent on the referral feed and support of general physicians (GPS). It is true for the word and India, where 30 to 45% of health care demand comes firm referrals. GNRC received on an average 40 to 50% patients recommended by the general physicians and the of city doctors through out northeast. A majority of the referring doctor and physician received incentive called outs from most of the receiving hospitals as finders fee. Their referrals to a supper specialty hospital were more often based on the monetary considerations while the lure of incentives are cuts prompted the general physicians, primary health care centers and nursing homes to refer to a super specialty hospital, many of them had a genuine anxiety as well.

As per the service classification of Berry and Yadow (1996) health care service are intangibles and fall in the category of credence services (hard to evaluate even after bought and consumed).

FINDINGS :

Many relationship-marketing programs are associated with several performance indicators. On going relationship with patients as customers  have an impact on Gross patient revenue per patient day, net income margin & total profit margin.

Two programs that have no significant association with any of the six performance indicators tested are:

1) Involving customers suppliers for design / development & sales activities of hospitals &

2) Joint product / service development with customers, suppliers & other organizations

This may be due to the fact that unlike manufacturing and consumer service organizations, customers usually rely on the expertise of the health care professionals for the design and delivery of care services. There is less enthusiasm among customers to become involved in the process design or development of new products and services at hospitals.

CONCLUSION :

CRM Practices indeed help improve performance indicators like occupancy of beds revenue per patients per day.

Further research can build on and expand the ideas presented from here obvious more could be to conclusively test the prepositions implied by the study. One can also study the underlying reasons as to why some specific programs produce better results than others.

BIBLIOGRAPHY :

* Evolving Relationship marketing into a discipline by Jagdish sheth & Atul Parvatiyar of Emory University, U.S.A.

* The Domain and conceptual foundations of Relationship marketing Jagdish sheth & Atul Parvatiyar of Emory University, U.S.A.

* Does relationship marketing pay - An emphirical investigation of relationship marketing practices in Hospitals.
- G.M.Naidu - University of Wisconsin
- Jagdish sheth & Atul Parvatiyar - Emory University, U.S.A.
- Lori Westgate - HCIA Inc, Baltimore.

* Building relationship through pricing by
- M.L.Agarwal - Professor of IIM, Lucknow.
- N.C.Borah  - MD GNRC Hospital, Guwahati.

* Websites:
- www.iiml.ac.in,
- www.crmguru.com,
- www.bus.emory.edu
- www.CRMCommunity.com

* Building relationship through pricing by
- M.L.Agarwal - Professor of IIM, Lucknow.
- N.C.Borah  - MD GNRC Hospital, Guwahati.

* Websites:
- www.iiml.ac.in,
- www.crmguru.com,
- www.bus.emory.edu
- www.CRMCommunity.com

Dr. K. Elangchezhian
Ph.D. HOD MBA
D. Malmarugan
BE, MBA, (PHD)
Research Sholar
Vellore Institute of Technology, Deemed University
Vellore
E-mail : mal_sal@rediffmail.com

Source : E-mail

Important Note :
Site Best Viewed in Internet
Explorer in 1024x768 pixels
Browser text size: Medium