Online Marketing: Internet Patient Acquisition Surges

In a previous incarnation, Howard Brown was a real estate developer in the Los Angeles area, a pursuit that ultimately left him dissatisfied and wanting more. Brown became a family and marriage counselor, eventually turning his attention to behavioral health opportunities on the Internet. He ultimately created, a network of hundreds of behavioral health and addiction web sites. With over 200,000 pages of content, 4therapy has emerged as probably the most sophisticated Internet marketing operation in the treatment and mental health arenas.

Late last year, CRC Health Group, already 4therapy’s largest advertising client, bought the Internet operation from Brown. CRC had also been looking at other addiction marketing sites, including, according to SoberRecovery founder Jon Heller. Last year, Heller outsourced significant parts of his operation in a move that left him more time to focus on the creative aspects of the business. CRC CEO Barry Karlin says that it is not his intent to make 4therapy over into an in-house Internet marketing arm for CRC’s far flung treatment operations. But observers believe that in the end that is what may occur, at least for the addiction Internet marketing part of the operation, because CRC’s competitors might be unwilling to continue to advertise on 4therapy. So far, though, Brown says that interest remains quite strong and that most existing advertisers have elected to remain with 4therapy, being very satisfied with call volumes.

Over the last several years, the Internet has grown tremendously in importance as a patient acquisition channel for CRC, accounting now for just under 10 percent of the company’s census, Karlin says. For some other treatment operations, especially smaller boutique type facilities, the Internet is even more important for patient acquisition, responsible many times for more than half their census. “We get about 50 percent of our clients from the Internet,” says Chris Prentiss, co-founder of Malibu-based Passages. A high-end operation that is a prolific Internet marketer, Passages spends big bucks on payper- click and for optimization services that yield high “natural” search engine rankings. To a large extent, it is high-end boutiques like Passages that are responsible for the bidding battles that have erupted for some of the more avidly sought after addiction and treatment search terms, sending industry pay-per-click rates through the roof. The treatment business pays some of the highest pay-per-click rates of any industry, driven largely as they are by the fat profit margins at the high-end of the business. Prentiss says it’s not uncommon for him to have to pay $25 per click and more at certain times for certain search terms, a level that is putting often intense pressure on other more affordable centers whose profit margins don’t even begin to approach those of high-end facilities.

“It’s certainly getting very expensive for us,” says Paula Zoss, CEO and founder of Southern California-based Essence Treatment Options. “But I have to do this, it’s the only way to generate calls.”

But the high-end treatment centers’ big spending is also generating substantial referrals to other more low cost centers, at no cost to them. That’s because few of the leads from pay-per-click click can afford high-end care. “Only about five percent of our callers from the Internet can afford to get treated here,” says Prentiss. “We refer the rest out.”

And it is not just nimble boutiques that are focusing on the Internet for patient acquisition, but also highly established players with deep industry and commercial insurance referral relationships. Having redesigned its web site last fall, South Florida-based Hanley Center has seen an uptick in the patients it gets from the Internet. The non-profit has also been experimenting with pay-per-click, from which it says it is getting good results. Google recently approached the center with a proposal that would result in a big boost in click throughs for Hanley. The deal with Google, if Hanley decides to go with it, would cost at least $1,000 per week to implement.