The elusive ROI in online healthcare initiatives

Perhaps you noticed some of the confusion about return on investment (ROI) for social media and online initiatives in the past year. Certainly there has been a lot of conversation online and offline about what this actually is.

In fact ROI is not at all complicated, nor does it need commentators to re-define and interpret what it may mean; it is already a series of mathematically precise business metrics, perhaps best simplified as something like:

ROI = (GAIN – COST) / COST
So where did the confusion come from? Somehow in these past 10 years the old world of “IT” melded with the older world of “Marketing and Communications”, to form the new world of “Social Media”. The problem with that is that the oldest world of “Business” has been increasingly starting to ask ‘is this going to make a difference to the bottom line?’.

Consequently, the range of descriptive spin which has been introduced in recent times to try and communicate the actual value of social media to the business is bewildering. Here are just a few that have been mentioned in the context of the healthcare industry;

  • Return on investment – Just focus on the investment part at this stage, as it is a learning process where we don’t know what to expect.
  • Return on ignorance – What if we don’t, what if we miss out?
  • Return on influence – We just need to have a persuasive presence online.
  • Return on interest – Think of it as an area of interest.

Some have even gone as far as changing the acronym altogether;

  • Return on connections – It’s not about the money, just how many friends we have
  • Return on hassle

There are probably more. However, in the world of business ROI hasn’t changed at all.

Tangible ROI in health care and business

The ‘I’ in ROI means ‘investment’, which is usually in the form of capital (or resources which require capital). It figures therefore that the output returned (the ‘R’) also needs to be in these same units. A financial value is required.

Indeed one Pharmaceutical Brand Director made this point very strongly at an ‘e’-Pharma conference in the US earlier this year, which paraphrased goes like this:

“…you marketing types think that ROI is something that you can determine from your web analytics, but in the real-world of pharmaceuticals any measurement about website visitors is three levels down from true business ROI. Has there been an increase in prescriptions? Has there been an increase in sales? Let’s call it for what it is; we are a product manufacturing business, and we have to sell products.”

So the idea of ‘visitors’, or ‘hits’, or ‘time on site’ or conversion is not really helping to answer the big business principles – unless it is tied to a financial indicator. Even so, many well-meaning companies and agencies continue to derive new metrics to try and define online or social ROI. Some have even successfully integrated these metrics within their CRM systems. However these measurement indicators may truthfully only show the ‘potential for return’, but do not actually translate to the ‘actual revenue return’ that will be generated.

Nonetheless, there are many organisations for which ROI cannot be determined in terms of sales and revenue. Non-profit patient advocacy organisations are one example. Pharmaceutical patient safety campaigns are another. That said, there will usually be business objectives which are themselves tangible and measurable. In the case of a non-profit patient advocacy organisation, it may be the ability to secure funding.

Likewise in regulated areas such as medical devices, or prescription only medicine, or surgical supplies. Activities online by these companies often have no direct measurable correlation between the expenditure and the financial bottom line of the business.

Indeed for health care in general, determining ROI from channels like Social Media may seem even more intangible than for other industry sectors.

Case Study: TuDiabetes and The Diabetes Hands Foundation

In a recent interview with Manny Hernandez of the online patient group TuDiabetes, we discussed this at length. TuDiabetes, EsTuDiabetes, and the Diabetes Hands Foundation have received critical acclaim from industry observers, and from other patient advocacy groups who are keen to imitate the great engagement achieved online and offline.

After discussing some of the notable campaigns, which won TuDiabetes an award for [intlink id=”best-patient-community-award” type=”post”]Best Patient Community[/intlink], we started to go deeper into the organisational objectives, and how well the initiatives served in meeting the big picture needs.

Manny explained:

“…in the past we were turned down on funding and sponsorship because we didn’t have quantitative data.”

As Chairman of the Board for the Diabetes Hands Foundation, as well as the founder, Manny naturally expects results from the good work they are doing. Results which do not include revenue, or even membership growth; but tangible benefit to people whose lives are touched by diabetes. In their own words they have a vision to

“…actively promote positive and proactive actions to stay healthy while living with diabetes.”

Changing behaviour is not the most ‘tangible’ of business objectives, and certainly does not fall into the typical paradigm of ROI. Yet this is also one of the most common objectives mentioned by the health care and pharmaceutical clients that Creation Healthcare provides strategy and research for.

When the BigBlueTest ran, the goal was to educate and to increase participation. In hindsight, it was recognised that collecting solid data is critical for building a case for the next phase funding, but that collecting mountains of data alone is useless without the right questions and the right measurement at the point of setting the strategy. Learning from the past, Manny knows that the 2010 version of the online/offline event will be even better.

Another popular campaign – Making Sense of Diabetes – was funded by Boehringer Ingelheim, a company that did not at that time offer any products specifically for Diabetes sufferers, although had a pipeline of oral antidiabetic products in clinical development. The ROI for Boehringer Ingelheim through such an exercise is massively intangible. Clearly there is brand association in a new therapy area, there is goodwill, there is support of public awareness – but no clear link to product sales and true ROI. Success can be construed through non-financial indicators, those with which marketing and communications teams are already very familiar. Fortunately, we live in a age where every online action is measurable, unlike the days of the traditional printed piece and television.

This is an important point in setting expectation. The expectation for a CSR initiative is very different than for a product launch. So at this level we have to be content with ‘potential value’ as a measure of success, or tie the success to well-targeted brand exposure associated with behavioural indicators such as ‘Opportunities to see’, or ‘Visits’ and so on.

As it happens, Manny did feel somewhat disappointed with the actual ‘views’ of the YouTube final compiled video, with approximately 4,360 as this article is written. However in terms of influence, this video is literally changing the thinking of patient groups all over Europe, and certainly giving pharmaceutical companies something to think about too. Although this is anecdotal, and once again less possible to measure quantitatively.

So how is the Diabetes Hands Foundation going to obtain their form of non-financial ROI in the future? Well, an exciting development proposed by the Boston Children’s Hospital is potentially going to close the loop and provide the kind of quantifiable evidence of changed patient outcomes that they need.

tuAnalyze is an application in Beta testing, which will allow members to enter, track and optionally share their haemoglobin A1c data. The potential exists to map this data by geography, or to find trends which lead to healthier behaviour for members. Importantly, members are able to opt into the level of personal health record sharing that they are comfortable with, leading to different but equally valuable research outcomes.

Manny explained his respect for research oriented institutions like PatientsLikeMe;

“I have always been a long-time admirer of the Heywood brothers because they have been really leading the way in this space. They gained access to data which respects patient choices and preferences.”

He understands the need to commercialize such operations and for industry to accept this new form of patient information, and says that for the Diabetes Hands Foundation it is actually not an option;

“It was important to us from the beginning that our network was run as a non-profit.”

So in the near future, the Diabetes Hands Foundation will have their own meaningful measurement which enables them to tangibly determine how effective their online networking efforts and awareness campaigns are in changing the perception and management of the diabetes condition. You can look forward to Part II of my conversation with Manny in the coming weeks.

Assigning value to intangible organisational objectives

In any case, every measurable action can be assigned a ‘value’; If it is someone signing up to a newsletter, how much money would have needed to be spent to find a contact, phone them, and ‘opt-in’ them to achieve the same outcome. Whilst not ROI, it is a meaningful indicator that has more persuasion with a Board than simple visits.

If it is someone contacting you through a form instead of a phone call, what is the reduction in resource overhead by not needing a person to be permanently there?

There are some simple pointers for all organisations that are unable to directly measure ROI through sales or revenue;

  1. Start by setting the strategy
    • What do you want to accomplish?
    • What is the current baseline
  2. Make sure there is a measurable ‘action’ at the end of the predetermined online journey
  3. Make sure that any action has a ‘potential’ value
    • It may be based on cutting expenses
    • It may be based on projected funding
    • It may be based on the individual
  4. Keep measuring and learning; Discovery is a continuous improvement methodology.

If you would like to take some time strategically planning how to determine and measure the level to which your organisational objectives are being met online, why not [intlink id=”contact” type=”page”]call us now[/intlink] and set up an informal meeting?

Paul Grant

Paul Grant is Healthcare Engagement Strategist with global consultancy Creation Healthcare, where he leads digital behaviour research studies and advises healthcare clients on engagement strategies. He has been providing strategic insight solutions and professional services to the world's leading biopharmaceutical and healthcare organizations, helping them to find appropriate pathways to engagement within regulatory frameworks.