Skip to main content

What's the Finance Function's ROI?

"Ads proliferate across St. Louis as hospitals push services, name-recognition" is the headline above this interesting article from the St. Louis Post-Dispatch's website.  Featuring all sides of the debate, the article includes this from Samuel Steinberg, decribed as a Florida-based hospital finance consultant who "...remains skeptical about the benefit of advertising."

“It’s very difficult to be able to demonstrate that these things are worth the investment,” he said. “Hospitals and health systems that put a lot of money into advertising say it is beneficial. But when you ask them to prove it, there’s a real shortage of good research that verifies that it’s worth it.”
Yes, hospital marketers are frequently remiss in not building more value-driven metrics into their work.  Too many of these marketers (those with limited job prospects) devolve from saying that measuring marketing is difficult to concluding it's a waste of time to try.  And in my experience, far too few say "We're going to do MORE of what we CAN measure and LESS (or NONE) of what we CAN'T," even at the cost of annoying a CEO's favorite physician or two.

Yet as uncomfortable as it may be for the Finance side of the house to hear, they and marketing have a lot in common, as BOTH functions sometimes do things based more on faith than on solid evidence of results.

Don't believe me?  I'll bet you have CPA after your name.  But I digress...

Take the internal audit function for example, people and processes designed to keep the organization compliant and fraud-free.  But how do you measure "frauds avoided" - misadventures that would've happened but didn't thanks to the IA boffins' work?  Tough to do.  At some point one must believe - there's that pesky 'faith' thing again - that organizations WITH a strong IA function are more successful than those without (a point with which I happen to agree by the way.) 

There's an entire superstructure of intuition and supposition built around that idea, just as with the idea that a healthy and well-communicated brand is an important organizational asset (even though not everything about it can be measured.)  But intuition and supposition are not facts, and saying that without IA we'd have more Enrons and Worldcoms is wishing and hoping, not evidence.

So bring data to the argument when you can.  But next time you hear Mr. Steinberg echoed by YOUR finance team, ask them for the cost justification on what THEY do.  And watch 'faith' suddenly rise up the priority list.


Popular posts from this blog

Being Disrupted Ain't Fun. Deal With It.

Articles about disrupting healthcare, particularly those analogizing, say, Tesla's example with healthcare's current state, are frequently met with a chorus of (paraphrasing here) "Irrelevant! Cars are easy, healthcare is hard." You know, patients and doctors as examples of "information asymmetry" and all that. Well, let me ask you this: assuming you drive a car with a traditional internal combustion engine, how much do you know about the metallurgy in your car's engine block? I'll bet the answer is: virtually nothing. In fact it's probably less than you know about your own body's GI tract. Yet somehow, every day, us (allegedly) ignorant people buy and drive cars without help from a cadre of experts. Most of us do so and live happily ever after (at least until the warranty expires. Warranties...another thing healthcare could learn from Tesla.) Now, us free range dummies - impatient with information asymmetry - are storming healthcar…

Becoming Consumer Friendly In Five Easy Steps...Or Not

An article at offers hospitals 5 steps to becoming more consumer friendly.

If you still think there's a secret sauce to your hospital becoming more "consumer friendly," these 5 steps are as good a place to start as any.  Unfortunately, it's a little like that old Steve Martin comedy bit where he says he'll teach you how to be rich. The first step is to go find a million dollars.

Step 1 from the article is realizing that "...a Medicare beneficiary with chronic conditions is different from a young mom who brings her kids in for an annual check-up." This is market segmentation for beginners, and, yes, one size decidedly does not fit all. I'm sure your marketing team's been saying this for a while.

Steps 2-5: have a strategy, metrics, a champion and resources. OK. Hard to argue with any of those.

But those things, alone or together, won't overcome culture. They're important components to be sure, but insufficient without a …

Behind Every Resume Is A Potential Customer...and Karma.

I recently heard from an executive colleague who, thanks to a merger, found herself looking for her next opportunity. Her story, probably depressingly familiar to many of you, was all about the big black hole of rudeness and non-responsiveness that so often sums up employers' attitudes toward candidates.

This colleague, thinking she'd see the healthcare world from a new vantage point, pursued opportunities with consultants, IT vendors, architects and other suppliers who, far from appreciating her solid resume, were like the 3 Stooges of clueless.

So back to a senior health system role she went, WHERE SHE NOW INITIATES AND MANAGES RFPs FOR SOME OF THE VERY SAME COMPANIES who wouldn't talk to her as a candidate, but profess their LOVE for her now that she's got money to spend on their services.

Not gonna happen. Any guesses who's off the RFP list?

I smiled when I heard her story, imagining the BusDev people working hard to grow the revenue pipeline, all the while b…