Where do Patients' Loyalties Lie? Building Revenue by Improving Satisfaction

Patients are more engaged today in their healthcare than ever before. As information becomes more easily accessible through advances in health IT and policies that encourage transparency, patients no longer simply go to the hospital closest to them. By improving patient satisfaction and ensuring access to care, hospitals can help drive patients to choose their hospital over a competitor for all their healthcare needs. Jim Sellers, senior vice president of marketing services at Buxton, a Fort Worth, Texas-based consumer analytics company, explains how hospitals can build patient loyalty to strengthen their market position.

Usage is the most powerful measure of loyalty

One measure of patient loyalty is consumption of healthcare services. The most loyal patients interact with the hospital across multiple service lines, according to Mr. Sellers. In contrast, disengaged patients may have contact with only a single specialist. The different behavior in loyal, compared with disengaged patients, translates into a five-fold difference in financial value. That is, all other things being equal, loyal patients are five times more valuable than disengaged patients, according to Mr. Sellers.

Building patient loyalty requires a different approach than the one hospitals' marketing departments tend to take. "Leadership in most marketing departments tends to be oriented to market share rather than to share of wallet. That means marketers want more patients, and they're investing and spending resources on getting more patients rather than on identifying, investing in and meeting the full range of needs for patients they already have," Mr. Sellers says. This imbalance between prospecting and loyalty costs systems millions of dollars a year. "Looking purely from a revenue point of view, prospecting is 10 times less efficient than investing in loyalty," says Mr. Sellers.

Take life stage into account when setting usage targets
The first step in developing loyalty in patients is defining and measuring loyalty. One definition, as mentioned above, is patients' consumption. Hospitals can measure patients' utilization of healthcare services and compare it with patients' potential utilization based on their life stage. For example, Mr. Sellers says a middle-aged primary care patient who first entered the system five years ago should have had five check-ups, based on a standard of annual check-ups. If the patient has had only two check-ups, the actual value is two, while the potential is five. "Set consumption targets that don't result in unnecessary treatments or unneeded encounters, but ones that are designed to result in effective outcomes, and set those targets based on age cohorts to account for consumption differences based on life stage," Mr. Sellers says.  

Account for differences in your target population
When setting loyalty goals, it is important for hospitals to understand the different needs of patients in their target population. For instance, the loyalty indicators for a non-profit hospital serving publicly insured patients will differ significantly from those of a for-profit organization focused more on privately insured patients. Targeting certain patient groups does not mean the hospital ignores the other group — each hospital has to care for a mix of publicly and privately insured patients — but a hospital can invest more in one area over another, depending on the hospital's strategic plan. "Target patients consistent with the strategic mission of the hospital system, and invest to understand what drives patient loyalty and satisfaction," Mr. Sellers says.

Understand your patient's experience to drive satisfaction
One significant and poorly understood reason for under-utilization of healthcare services is a poor patient experience, according to Mr. Sellers. For instance, if scheduling an appointment for a hospital service is a hassle, patients will be deterred from using the service. Boosting patient satisfaction can increase patients' consumption and thus their loyalty to the hospital. Patient satisfaction is determined by multiple factors; hospitals should therefore survey patients to determine what is most important to patients' healthcare experience. "If a hospital understands who it is serving, knows where those individuals live, what their needs are and what value can be expected from serving them, that's the foundation of a strategic plan," Mr. Sellers says. "Online survey panels are a fast and cost-effective way to identify satisfaction drivers and satisfaction outcomes," he says.

Once hospitals identify their patient's key satisfaction drivers, they should measure their performance on those drivers and develop strategies to close gaps and improve performance. Hospitals should first focus on the areas with the least satisfaction and where improvement is feasible. "Think about 25 things that drive satisfaction. If you know how important each one is to the patient, how well the hospital is performing and how difficult it would be to improve, you have a fact base [to use to] increase satisfaction the fastest," Mr. Sellers says. Hospitals should use this fact base to choose a few areas to work on, instead of trying to improve all 25 at once. Mr. Sellers suggests directing efforts to three areas at a time; when hospitals reach their goals in those areas, they can move on to the next three.

Strategies to improve patient satisfaction should consider differences between efficiency and effectiveness. For example, Mr. Sellers says it may be efficient for a hospital clinic to schedule appointments in blocks of time, which may lead to an average wait time of 90 minutes for patients. If the long wait time reduces patient satisfaction, hospitals need to develop a scheduling method that will increase patient satisfaction but maintain efficiency. "The hospital is being efficient but not effective," Mr. Sellers says. "It's not creating satisfaction and is going to lose loyalty." Hospitals can generate ideas for enhancing both satisfaction and efficiency by involving front-line workers, according to Mr. Sellers. "It's amazing what small groups of front-line people who are not executives can come up with relatively quickly," he says.

Go where your patients are

Another way to build loyalty among patients is to ensure easy access to the organization's services. Patients' low consumption of healthcare services may be due to difficult access to those services rather than poor satisfaction. "If a hospital's physical network isn't conveniently located for patients to be able to access it, loyalty is going to be lost over time," Mr. Sellers says. He suggests collecting data on patients' demographics, lifestyles and locations to identify opportunities for growth through improved access. For instance, overlaying a map of where patients and prospects live with a map of the hospital's facility locations will reveal areas where patients may be underserved, Mr. Sellers says.

More Articles on Strategic Planning:

Do Brand Values Make a Difference?
7 Common Mistakes Hospitals Make in Their Strategic Plans

5 Steps to Gaining Buy-in for a Hospital's Vision

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