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The Smart Thing to Do: Patient Experience and the Bottom Line

Posted By Jason A. Wolf Ph.D. CPXP, Tuesday, November 1, 2011
Updated: Tuesday, November 1, 2011
Most now agree that patient experience is not just a nice to do, it is a must do. The idea of patient experience has recently taken on greater significance, first, through the emergence of surveys such as HCAHPS that make performance transparent and followed by the reality that reimbursement dollars, performance pay and compensation are being tied to outcomes through policy being implemented around the world. Improving the patient experience is also what is right to do. It is about providing the type of care experience for patients and families that you would want for yourself and your loved ones.

But recognizing patient experience as both a must do and a right to do, is not enough. It should also be addressed as the smart thing to do. Why? The patient experience has true financial implications for healthcare organizations that reach well beyond regulations. With all that is done to address patient experience from the cultural, organizational and process sides, we also need to consider its financial implications. This is perhaps the area that patient experience champions have focused on the least, but could have the most significant impact in making the case for the important work being done.

Patient experience influences the performance of healthcare organizations on a number of fronts. In The Beryl Institute’s newest white paper, Return on Service: The Financial Impact of Patient Experience, three perspectives are suggested as we look at the bottom line impact of the patient experience: financial, marketing and clinical.

  • From the financial perspective, it has been shown that satisfied patients lead to higher profitability. In a 2008 J.D. Power study, it was discovered that hospitals scoring in the top quartile in satisfaction had over two times the margin of those at the bottom. These findings were supported by the 2008 Press Ganey paper, Return on Investment: Increasing Profitability by Improving Patient Satisfaction. The paper revealed that when hospitals were ranked by profitability into quartiles, the most profitable hospitals had the highest average satisfaction scores.
  • From the marketing perspective, we need to look no further than the power of word of mouth. In her 2004 article, Jacqueline Zimowski shared that a satisfied patient tells three other people about a positive experience. In contrast, a dissatisfied patient tells up to 25 others about a negative experience. The issue worsens, as for every patient that complains, there are 20 other dissatisfied patients that do not. And of those dissatisfied patients that don’t complain, only 1 in 10 will return. When you run the numbers, for every complaint you hear, you could be losing a potential 18 patients. In essence by not focusing on experience we are potentially driving patients away.
  • From the clinical perspective, we must be clear to recognize that experience and quality are not distinct efforts but critically interwoven aspects of overall care. Patient Experience is not just about pretty or quiet environments, positive service scripting or even consistent rounding. At the end of the day it is about ensuring our patients leave better than when they arrived (as often as we can). This was exemplified in a powerful way in the 2011 study, Relationship Between Patient Satisfaction with Inpatient Care and Hospital Readmission Within 30 Days,reported by Boulding et al. They examined quality factors (as defined by CMS Core Measures, specifically on acute myocardial infarction, heart failure, and pneumonia) and satisfaction factors (as determined by the two HCAHPS questions – How do you rate the hospital overall? and Would you recommend the hospital to friends and family?) in relationship to readmission rates within 30 days of discharge. The finding was surprising. The HCAHPS scores, i.e. experience outcomes, were reliable and even more predictable indicators of readmissions than quality indicators. In essence, patient experience, herein measured by HCAHPS was a distinct and measurable driver of readmissions, a key quality issue and a significant financial issue for healthcare organizations and one taking on even greater interest as it will impact future reimbursements that hospitals are eligible to receive.
As healthcare leaders take on the challenge of patient experience, it is important to recognize that it reaches well beyond simple measures of satisfaction. A commitment to patient experience has significant and measurable impact, not only in doing what is right for the people and communities you serve, but also in ensuring the best quality and most financially sound experience for all who are in and who deliver your care. To be responsible stewards for healthcare systems that are both vital and viable, it is essential to recognize and be willing to address the bottom line issues influenced by patient experience efforts every day. It is the smart thing to do!

Jason A. Wolf, Ph.D
Executive Director
The Beryl Institute
 

Related Body of Knowledge courses: Metrics and Measurement.

Tags:  bottom line  culture  FInancial Implications  HCAHPS  improving patient experience  marketing  Patient Experience  press ganey  readmissions  return on service  service excellence  value-based purchasing 

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