Healthcare Environments

Background

Organizations that focus on the satisfaction of their customers grow faster, have higher margins, and establish better reputations than their competitors. It’s been proven in banking, retail, and many other industries:

Americans share poor service experiences with an average of 15 people versus 11 with whom they’ll share a positive experience.²
74% of people are likely to switch brands if they find the purchasing process too difficult.³
After one negative experience, 51% of customers will never do business with that company again.⁴

When compared to other industries, healthcare organizations generally fare worse in experience management:

• According to the 2018 American Customer Satisfaction Index (ACSI), user experiences are best for banks, with an 81 out of 100-point score, financial advisory organizations (81), life insurers (80) and retail health stores (77). By comparison, hospitals score 76, medical practices score 74, and health insurers score 73. And per ACSI, the gap between customer service in healthcare organizations including hospitals and other industries is widening as customer expectations become more important.¹
• Net promoter scores for healthcare organizations are the lowest for any industry. Hospitals average 15 points (Scores above 50 are considered very good), versus companies like Apple, Amazon, Tesla, Netflix, and Starbucks that have net promoter scores above 60.
• Healthcare consumers are less inclined to share positive experiences than consumers in other industries. Only 54% of hospital consumers share a positive experience within a month, compared to 70% of retail and 66% of banking customers. And according to PricewaterhouseCoopers, negative experiences involving hospitals and doctors are remembered longer.⁷

For healthcare organizations, these findings are disappointing. In defense, some assert:

Hospitals, outpatient facilities, and clinics are complex organizations. Hospitals operate 24/7. Most outpatient clinics likewise operate extended hours and are required to accommodate after-hours access for patients.

Operations in healthcare settings are complicated. They’re highly regulated. They’re labor intense, capital intense, and, in most communities, major employers. Their workforce is diverse, ranging from highly educated and skilled professions to hourly workers. Skilled staff operate within the constraints of onerous rules and regulations from multiple federal and state government agencies that define their roles and obligations and how they’re compensated. These organizations are paid by individuals, employers, insurers, and public programs (Medicare, Medicaid, et al), each with unique requirements. Almost 60% of operating costs are people, 25% are for the drugs and supplies they use, and facility improvements, information technology, and overhead make up the rest. It’s a Business to Business (B2B) business model. Consumer experience plays a subordinate role to accommodating the doctors and nurses that provide care.

The best way to deliver an optimal experience is to meet the needs and expectations of the physicians and nurses. Staffing, scheduling, and care coordination that accommodates caregivers is a priority in most organizations. Thus, the patient experience is only one of several factors used in Medicare’s rating system for comparing hospital performance.

These assertions are widely held and valid but incomplete. Studies indicate hospitals and medical practices that have high patient experience scores are more profitable than their competitors. Hospitals with “excellent” HCAHPS patient quality ratings between 2008 and 2014 had an average net margin of 4.7% compared to 1.8% for hospitals with “low” ratings, per Deloitte.⁸