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Journal of the Academy of Hospital Administration

Customer Relationship Management (CRM) in Health Care Sector - A Case Study on Master Health Check

Author(s): B.Krishan Reddy*, G.V.R.K. Acharyulu**

Vol. 14, No. 1 (2002-01 - 2002-06)

Key Messages:

The key to sustainable competitive advantage in today's market is the customer organisations must know who their customers are, which customer population most directly drive their profits and what will keep their customers loyal and happy over time. Present scenario poses tremendous competition in the healthcare market which can be attributed to globalization customers becoming savvy and demanding due to level of knowledge and information awareness and health consciousness among the population.


The study aims at presenting some of the CRM concepts and elements - formulate CRM strategy to take proactive measures towards customer-centric business in a corporate hospital to improve customer satisfaction by building up better customer relationships leading to increase in revenues. Taking care of Patients, their needs and making relationship with patients is a common and routine activity in a corporate hospital, it is essential that CRM has to focus on the prospective healthy customers (other than patients) who visit the hospital and concern for their health check offered by hospital for supporting their life and monitoring of health. Now-a-days every individual has a great concern for his health and in anticipation of any health problems, if any, in future, he is able to face the financial crisis by purchasing appropriate health cards. This study focuses on the master Health Check packages, profile of customers, their behaviour and finally determining the relationship factors to design CRM strategy.


Keywords: Customer Health Check (MHC), Customer satisfaction, Customer Relationship Management (CRM)

CRM is a business strategy to select and manage customers to optimize long-term value. It requires a customer-centric business philosophy and culture to support effective marketing, sales and service processes. The CRM has been transformed recently from one-to-many mass-communication philosophy to more individualized, one-to-one communication.

CRM is one of the front - office applications which automates the relationship with a customer, covering contact and opportunity management, marketing and product knowledge, sales force management, sales forecasting, customer order processing and fulfillment, delivery, installation, pre-sale and post sale services and complaint handling by providing integrated view of the customer.

Relationship marketing is now in vogue. The need for relationship marketing stems from the changing dynamics of the global marketplace and the expanding requirements for competitive success. In today's scenario customer can no longer be considered as ignorant and ill informed. Customers are not only knowledgeable but also have a lot more choice on where to get their services. More so, hospitals now are forced to focus their attention and effort on building the relationships of customers within their organization. The world of mass marketing is drifting away to make room for one to one real time customer relationship management.

According to NASSCOM, the CRM market in India is currently estimated to be around $2 million and is slated to grow to $17 million by 2006. CRM market is expected to touch $10 billion by 2003, says Prakash Gurbaxani, CEO of 24/7

According to experts, while every rupee spent on advertising yields Rs. 250 in revenues, the same spent on customer services yields Rs. 2500 in revenues. (Internetworld-August'2001)

Profitability analyses have shown that while 20% of an organization's customers generate its profits, 80% reduce profit. Therefore. Retaining these 20% is imperative for the organization. This can be achieved through planned CRM practices. (Computers Today 16-31 August. 2001)

CRM/e-CRM is a fast growing area and technology providers are now rushing to capitalize on this with plethora of software products like Siebel, Vantive/peoplesoft, Clarify, Broad Vision, Baan, Pivotal and SAP and Oracle Applications.

1.1. Customer

"The most valuable asset of any business is its customers"

Customer can be defined as the recipient or beneficiary of the outputs of work effects or the purchaser of products and goods. The types of customers in a hospital can be defined as follows:

Patients are those persons who come to the hospital for treatment and to avail the facilities rendered by the hospital.

Attendants are the accompanies of the patients or the visitor who come to visit the patient during his/her stay in the hospital.

Clients can be the employers of companies who refer their employees to a particular hospital on emergency. They can also be the doctors who refer their patients to a particular hospital in certain contexts.

Customers are presently healthy to avail the benefits offered by hospital in respect of health packages and insurance schemes etc. The present study is related to these customers.

1.2. Relationship

To day, the relationship generates synergy in building up the relationships over the globe. It enables a return to win-win thinking. Return on relationship (ROR) will be return on investment (ROI) by transforming the services into relationship-bases customer interactions.

Relationship do not form overnight. A typical man-woman relationship goes through stages such as dating, romance, marriage, honeymoon and so on. There is model developed by behavioural scientists on relationship consists of six stages viz. contact, involvement, intimacy, deterioration, repair and dissolution. The nature of relationship measure the depth of it. They are Reciprocation, Mutual Benefit, Trust, Transparency, Concern, Interdependency, Commitment, Shared Values, and Adaptation.

Relationships with customers results in increased use of company's services by loyal customers, charging of price premiums for customized services and referrals by satisfied customers that bring new customers. The concept of customer relations goes a long way in ensuring the marketing policies of the company are attuned to market needs. It will give an integrated channel of communication with consistency.

The advantages of developing relationship with customers are exponential in nature. A complete customer relationship development strategy creates a positive wave effect. This effect is:

  • A customer acquisition strategy that is targeted and based on understanding mutual value.
  • Customer retention strategy aimed at raising levels of customer satisfaction.
  • Customer satisfaction with the organization that leads to customer loyalty.
  • Customer loyalty leading to greater share of the customer, lower customer development costs, referral business. The synergy created by relationship development leads to mutual profitability for both organization and the customers.

2.0. Customer Relationship Management

Customer Relations Management (CRM is the establishment, development, maintenance and optimization of long-term mutually valuable relationships between customer and organization. Successful CRM, focuses on the profiling or understanding the needs and desires of the customers and is achieved by placing these needs at the heart of the business by integrating them with the organization's strategy, people, technology and business process.

In order to be effective, CRM requires a synergistic integration of the strategy, people and technology of an organization. This integration leads to the creation of the service process that seek to develop an ongoing relationship with customers and result in creation of an exchange relationship that is mutually beneficial for both the organization and the customer.

CRM is not a grassroots initiative. CRM must come from the top. It is an all-encompassing strategy, and no one department or Call center or Information Technology manager can drive the cross-functional process changes required. Thus, CRM is a Holistic approach.

The heart of any successful strategy is to manage and satisfy the customers and the ability to listen to the customer and find out the level of satisfaction with the services offered by hospital and analyze the feed back given by customers.

2.1 The CRM Lifecycle

CRM revolves round the management of customer life cycle. The following are the Stages in customer life cycle (CLC):

Efficiency/productivity - Understanding Impact

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a) Integration Phase: The CRM Lifecycle begins with the integration of front office systems and the centralization of customer related data. It's benefits include improved front office efficiency and productivity. The output of this phase is a centralized source of all relevant customer data. This phase certainly provides business value, but alone it does not improve the understanding of the customers, nor strengthen the relationship with them. Customer Acquisition is either through the traditional advertising or through referrals.

b) Analysis Phase: This is the most critical to CRM success. CRM analysts enable the effective management of customer relationships. It's only through analysis of the customer data that can begin to understand customer behavior and needs identify, demand patterns and trends and discover causal
relationships. All these together help to predict more accurately the future customer satisfaction and behaviour and lay a quantified foundation for strategic decision-making, customer development through Personalization of communication and customization of products and services through mutual learning process.

c) Action Phase: This provides impact and strengthening of customer relationships. This is where the strategic decisions are carried out. Service processes and organizational structures are refined based on the improved customer under standing gained through analysis. Leverage the customer equity through cross-selling and up-selling to meet the customer requirement, to predominantly meet the seller's need to maximize his revenue by exploiting his relationship with the customers. This final phase closes the loop.

3. What is Master Health Check?

Master Health Check (MHC) is a series of tests to screen each functional area closely to detect even the smallest symptom of a major illness. It also helps to identify the reason for minor ailments, which are constant. MHC is considered to be the most comprehensive prevention check. Master Health Check consists of five permanent packages, which are as follows:

  1. Master Health Check,
  2. Executive Health Check,
  3. Heart Check,
  4. Whole Body Check and
  5. Well Women Check.

The following table gives the particulars, abbreviations used and the cost in Rupees as of March 2001.

1700 2600 3700 5900 1600

3.1 Why CRM in MHC

Normally MHC is altogether a different type of activity in a hospital when compared to other activities. A prospective patient may undertake some of thee tests as required for deciding to be treated as an in-patient or out-patient or there is no problem and he/she may be sent out. Where as, in case of MHC, the projection is altogether different in the sense that a person (customer) who undergoes these tests comes to hospital in a planned way with such a type of motive behind that he is more conscious about his health and would like to have repeat visits, repeat consultancy and who may be trying to keep his health in a good condition to avoid any future unexpected eventualities. That is the reason, such type of persons are being called as customers.

The percentage of repeat customers (as seen in the table below) compared to the total number of customer is very less, thus an effective CRM will help to build relationships.

4. Objectives of the study

I. To study the various packages offered by a large hospital under Master Health Check (MHC).

II. To study the profile, behaviour, expectations and frequency of repetition of the customers opting for MHC.

III. To determine the factors affecting the relationship between the customers and the hospital.

IV. To suggest the characteristics for an ideal CRM.

5. Methodology

The following discussion, concentrates on the methodology used, elaborating upon the various aspects of research design, study area, samples size and tools of data collection and data analysis.

5.1 Research Design.

An exploratory research is undertaken to focus on creating a customer Relationship Management strategy for the Master Health Check in the hospital.

This research is based on the following:

I. Customer Study- First, the customers are studied based on their profile, behaviour and perceptions about the hospital and the services offered. In addition, a study on the repeat customers is conducted and the factors affecting the relationship between the hospital and the customers are identified.

II. Product Study- Different packages offered under Master Health Check, in a large Corporate Hospital, and the data used for the study is gathered from primary and secondary sources.

5.2. Data Collection

The research is primarily based on secondary data, and supplemented with primary data. The tools used for data collection are:

a) Secondary Data

  1. MHC feedback forms
  2. MHC patient records
  3. Repeat patient records.
  4. OP accession register

b) Primary Data

  1. Questionnaire
  2. Interviews
  3. Observations

c) Questionnaire

A questionnaire is designed mainly to assess the factors contribution into building a good relationship between the customers and the hospital, so that they come back for a repeat visit, if need arises. It is targeted at the MHC clients. The questionnaire consists of three main questions of which one is an open-ended. The first question is a multiple choice question which consists of various possible factors accounting for a repeat visit to the same hospital.

d) Interviews

An interview of the staff has been conducted working in MHC schemes. The main purpose of this is to get information regarding various packages available. Interview of customers is also conducted to assess their needs and expectations.

e) Observation

This is done mainly to assess the patient flow, time required for each process and the attitudes of the staff towards the customers.

5.3 Questionnaire (Primary Data)

The sample size for primary data is 100, which was randomly distributed among the repeat patients.

A sample of 100 customers is chosen randomly from the repeat customers of MHC.

5.3.1 MHC Feedback Form

A total of 413 feedback forms are analyzed. This is of great help to identify the customer profile, customer behaviour and their perceptions about the hospital. The various criteria on which the customers analyzed are as under:

a) Customer Profile:

  • Age
  • Sex
  • Package/Service Offered
  • Geographical profile
  • Family doctors
  • Source of awareness of MHC

b) Customer Behavior:

  • Satisfaction Level
  • Recommending MHC to family and friends
  • Overall opinion on reception
  • Overall opinion on doctors
  • Overall opinion on courteousness of service
  • Overall opinion on promptness of service
  • Overall opinion on cleanliness of the hospital

c) Customer Perception:

  • Excellent Service
  • Personalised patient care
  • Highly qualified doctors
  • Sophisticated equipment
  • Good environment

5.3.2. MHC Customer Records

Customer records of Nov - Dec 2000, and Jan - Feb 2001 are collected which are accounting for 1168. These records are used to identify the profile of the customers like age, sex, geographical region etc.

5.3.3. MHC Repeat customer Records

Repeat customer records for the months of Jan-Mar 2001 are collected to analyze the percentage of repeat customers during these three months.

5.4. Data Analysis and Processing

The feedback forms and the questionnaires collected are checked for accuracy and completeness on immediate receipt. All the responses were pre-coded and assigned numerical values for the ease of entering data into the computer. Data analysis is done using Excel.

5.4.1. Data analysis and interpretation

Data analysis has been divided mainly into server sections, which are as follows:

  1. Customer Profile
  2. Customer Behaviour
  3. Customer Expectations
  4. Assessment of customer relationship
    1. Level of Satisfaction and Opinion on Reception
    2. Level of Satisfaction and Opinion on Doctors
    3. Level of Satisfaction and Courteousness of Service
    4. Level of Satisfaction and Promptness of Service
    5. Level of Satisfaction and Recommending MHC to Family and Friends
  5. Factors affecting relationship
  6. Repeat MHC customers

A. Customer Profile

In the following discussion, the analysis on various aspects of customer profile is presented.


From Table-1 it can be seen that the majority of the clients are opting for Master Health Check (70 percent), followed by Executive Health Check (22 percent), Heart Check (4 percent), Whole Body Check (3 percent) and Well Women Check (1 percent).

Table 1. MHC Customers:

Package *Numbers (%)
MHC 8239(70)
EHC 256(22)
WWC 8(1)
WBC 30(3)
HC 45(4)
Total 1168

The reason for maximum number of customers opting for Master Health Check and Executive Health Check are due to:

(i) Heart Check and Well Women Check are specialized packages confined to only specific purpose and cannot be called as comprehensive package. Whole Body Check is a very costly package and hence not being preferred by many customers.

(ii) Master health Check is highly demanded because it provides the customers with a list of comprehensive tests and it is also economical (Rs. 1700) compared to the other package.

(iii) Executive Health Check is a package that is directed only to the office going people and the executives. This package is not recommended for all. For example this package includes treadmill test that is not advisable for women below 30 years of age etc.

Table 2

Reveals that male clients form the majority (75 percent) compared to the female client (25 percent). This may be that women health is not considered that important or lack of health awareness among them. This calls for in-depth examination and constitutes separate study.

Sex Numbers (%)
Male 875(75)
Female 293(25)

Table 3 reveals that majority of the clients fall in the age group below 40 (36 percent), followed by age group 41-50 (29 percent), age group 51-60 (25 percent). The least number of clients constitutes age group above 70 (2 percent) and age group 61-70 constitutes 8 percent. Hence, people below 40 years of age are more health conscious. One the contrary, age group 60 and above is more prone to disease but they constitute less number of Master Health Check customers. This can be because of their lack of awareness of the kind of packages offered.

Table 3. Age Wise:

Age Numbers (%)
Below 40 419(36)
41-50 338(29)
51-60 288(25)
61-70 94(8)
Above 70 20(2)

Table 4 shows that the 58 percent of the total customers come from in and around Hyderabad, 30 percent comes from other districts of Andhra Pradesh. Customers from the other parts of the country are Maharashtra (3 percent), Orissa (3 percent), Karnataka (2 percent) Assam (1 percent) and from other states (3 percent).

Table 4. Geographical Classification:

Place Numbers (%)
Hyderabad 677(58)
AP* 353(30)
Maharashtra 39(3)
Orissa 30(3)
Karnataka 22(2)
Assam 14(1)
Others 33

* Excluding twin cities of Hyderabad and Secunderabad. From Table 5, it can be observed that 34 percent of the customers came to know of MHC through word of mouth that is through friends, while only 13 percent knew about it through advertisements and 19 percent through the doctors.

Particulars Numbers (%)
Advertisement 54(13)
Friend 141(34)
Doctor 77(19)
Other 151(34)

It is found from table 5, that 49 percent had family doctors but it is observed that only 19 percent came through family doctors which also includes other consultants and other doctors.

B. Customer Behaviour Analysis

Table 6 reveals that, as against year 2000, 62 percent of the customers are very satisfied where as during year 2001, same increased to 74 percent, which is 12 percent increase. It also shows that the dissatisfaction level has also gone up by 1 percent during that period.

Table 6. Satisfaction levels:

Ratings Percent (%)
Year 2000 Year 2001
Very Satisfied 62 74
Somewhat Satisfied Neither
Satisfied nor
Excellent 12 140 23 0 4
Good 7 123 50 4 1
Fair 1 8 13 1 1
Poor 0 0 1 1 1

Calculated Chi-squre = 64.86

Perception and Overall Satisfaction Level are Independent at 5% LOS

Table 13: Doctors

Satisfaction Reception Very
Satisfied nor
Excellent 186 31 3 3 0 10
Good 82 49 2 1 0 8
Fair 5 3 0 2 0 0
Poor 2 1 0 0 0 0
Can't say 3 3 3 0 1 0

Calculated Chi-squre = 64.54

Doctor and Overall Satisfaction Level are independent at 5% LOS

Table 14: Courteousness


Very Satisfied Somewhat
Satisfied nor
1 - Excellent 104 0 0 0 0 3
2 86 1 0 0 0 3
3 9 1 1 1 0 0
4 1 0 2 2 0 1
5 4 1 0 0 0 0
6 4 0 0 0 0 0
7 1 0 1 1 0 0
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