Shifting Marketing from Cost Center to Revenue Generator


Hospital CFOs recently ranked finances as their top concern, followed by government mandates and staff shortages, according to the American College of Healthcare Executive’s annual survey of the most troubling issues confronting hospitals.

marketing cost

And no wonder. Healthcare budget pressures are mounting. With more than half of hospitals projected to have negative margins for the rest of calendar 2022, the list of challenges ranges from national issues like ongoing staff shortages and continuing pandemic pressures to industry issues like changes to reimbursement and payment models, increasing market competition from new care delivery models, and mergers.

With all that pressure, finance leaders need to scrutinize budgets to see where they can save money without cutting services, and certainly without adding staff. In fact, staff retention has to be a priority, given the current and future health care workforce shortages, adding up to “more than 3.2 million workers short within five years,” according to a study by Mercer.  Between burnout, retirements, and labor trends, most parts of the country simply won’t have enough nurses or doctors in the next few years.

AI in a Time of Labor Shortage and Tight Budgets

Given patient care comes first, and revenue is necessary, any activity that doesn’t generate revenue directly or benefit patients is among the first targets for operating budget cuts. 

As a CFO or service line leader responsible for revenue, once you’ve tackled redundancy and inefficiency such as not bundling services from the same provider, having too many licenses for software, and over-ordering supplies, it may be natural to turn first to departmental cost centers. 

Marketing is sometimes viewed as a cost center. But given that one of their responsibilities is to bring in patients, either existing or new, could they instead be viewed as a revenue generator? Marketing has the ability to create a clear ROI that adds revenue without adding staff—and in some cases, lightening the workload.

Higher ROI: Patient Acquisition or Activation?

While you need both new patient acquisition and existing patient activation, how can marketing refocus their strategies to accommodate tight budgets and even tighter staffing? Acquiring new patients can often take a large portion of marketing budgets, given how competitive advertising is in healthcare.

New Patient Acquisition Challenges

  • High cost in time & money: Display and search campaigns across Google, Bing, Social Media, and other networks are highly competitive thus driving up the cost.
  • Consumer lists: Buying lists is expensive, and most lists need to be cleaned up before being loaded into your existing customer relationship management (CRM) system, if you have one. That means paying for staff or outside time to merge lists or simply manage massive data dumps.
  • Lack of data integrity: When acquiring new patients, you don’t have verified data to use such as email, phone, etc. Particularly with list purchases there is a high risk of outdated contact information. Campaigns are only as good as the accuracy and currency of the data to reach your target market.
  • No insights: You may have demographic or contact information but  not insights on that person’s past behaviors or current health conditions.
  • Blanket approach versus targeted: Speaking of campaigns, what about launching a digital outreach campaign? You can target and track those more precisely than traditional advertising. But they’re still very broad, because you’re targeting people by group (age, geography) and by guess (based on past online behavior, they may be a good candidate for a specific service line).
  • Capacity: If you do launch an acquisition campaign that’s successful, scheduling can be tough.. New leads could overwhelm staff and disappoint prospective patients who can’t get an appointment or experience long lead times.

Existing Patient Activation Benefits

  • Low cost, high accuracy: Activating patients works with data you already have in your electronic medical records (EMR), so there’s no cost to buy a list or integrate it. Plus, the chances that it’s accurate are high, since these are your current patients.
  • Higher efficacy: Activation is far more effective at driving appointment volume than acquisition, with much higher ROI.
  • Prevention + downstream revenue: Getting patients to come in for annual wellness visits (AWV) is not only beneficial for prevention, it can also lead to downstream referral for secondary care (by as much as 2X).
  • User experience: Your outreach can be much more targeted by using the data in your EMR; consider a billboard for breast cancer awareness versus a text to an existing patient who meets the risk factors—with a link to set up an appointment. One requires extra work (remembering to set up an appointment), while one only takes one click.
  • Dynamic Throttling: Some activation systems allow you to not only perform effective patient outreach, but also to sense appt availability. That means you won’t overload your call center and you won’t promote appointments that aren’t available.

While any healthcare system needs both acquisition and activation, patient activation is an underrated tool. Balancing marketing strategies to lean heavier on activating patients and less on acquiring new ones can help tighten budgets. With the right tool for activation, you can:

  • Track ROI
  • Make use of existing assets, like EMR data, phone numbers, and email addresses
  • Maximize your knowledge of your patients (which has the long-tail effect of building loyalty)
  • Sense capacity to avoid staff overload and improve the user experience
  • Increase preventative care 
  • Generate downstream revenue

The Vital Role of AI in Patient Care: Getting Them to Show Up at Your Healthcare System

While much of the conversation around AI centers on medical technology for care delivery, healthcare marketing AI also exists, and its benefits are proven. 

Known as CRM intelligence, this software uses machine learning on your disparate patient data sets to identify those most in need of a particular service or screening (for example, mammograms). It then automatically delivers that message through the medium the patient is most likely to respond to. It works with email, and has been shown to be highly effective with SMS.

One of the main benefits of patient activation, when done with CRM intelligence or AI + CRM, is that you can dynamically throttle your campaign to align with appointment availability. You won’t waste money doing a promotion only to overload your call center or frustrate potential patients who can’t get an appointment.

CRM intelligence also allows organizations to see the results of their campaigns in real time. Rather than waiting to determine campaign success, healthcare systems can see right away whether their activities are driving revenue and improving patient outcomes.

Using CRM Intelligence is a cost effective and easy way to quickly activate patients. With efficiency and speed, it can turn the marketing function into a revenue generator, instead of a cost center. After all, activating an existing patient is a much faster path to revenue and outcome than acquiring a new customer.


To learn more about how health systems are looking to drive patient volume and maximize patient lifetime value with always on, AI-powered CRM intelligence tools, download the white paper: Moving Beyond Traditional Healthcare CRM.

moving beyond traditional healthcare crm software