Hospitals that deliver a better patient experience perform better financially, the latest research shows. Customers are more loyal. Reputation spreads, boosting referrals. And happier patients typically result in lower malpractice risk for physicians, to name just a few benefits.
Payers are also pushing hospitals to focus on patient experience. Programs like Medicare’s Hospital Value-Based Purchasing (VBP) program reward those hospitals who have better patient experience scores. Factors as diverse as nighttime noise levels to a caregiver’s bedside manner can impact a hospital’s Medicare payment levels.
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The bottom line is that good patient experience can drive higher hospital profitability and those experiences correlate closely with better care (in particular, nurse-patient engagement). When looking at where the patient experience and financial performance intersect, hospitals with better experience levels earn disproportionately more than they spend compared to hospitals with low patient experience ratings. Ultimately, investing in patient experience makes economic sense. It may increase costs initially, but it can potentially increase revenue even more.
So how can we move the ball forward?
As a starting point, hospitals should consider investing in the tools and technology needed to create a better experience. Everything from making appointment scheduling easier to offering convenient payment processes and follow-up appointments matter. That’s because consumers are “shopping” for health care more than ever. A recent study found that more than 50 percent of respondents said they would likely switch hospitals due to inadequate communication and information sharing, as well as difficulty in reaching a health care professional by phone or email.
This leads next to a need for transparency. As patients bear a greater share of hospital costs, they are scrutinizing health care providers closely, so hospitals need to be increasingly transparent about their care, services, and costs.
Patient experience measures can provide valuable information to help patients make informed choices while helping them identify opportunities for improvement. For example, investing in digital technologies that enable patients to access information through a variety of online channels could empower patients to make quick and informed decisions about their care.
Staff engagement with patients is another area in which to invest. A highly engaged staff will likely boost patient experience and thus better financial performance. While it doesn’t always correlate with better health outcomes, patients intrinsically value the interpersonal experiences of the patient-caregiver relationship, including communication, compassion and an overall sense of being treated with dignity and respect.
One of the best ways to foster staff engagement is by improving their work environment. Enhancing the nurses’ environment, including adding more staff, may reap positive dividends despite the added costs. Enhanced nurse work environments have been shown to improve health care quality, as measured by fewer patient deaths, reduced failure-to-rescue rates, shorter hospital stays and lower readmission rates. The research bears this out: patient experience scores tied to interactions with nurses had the strongest association with hospital financial outcomes.
Hospitals with great patient experience ratings tend to have higher nurses- and doctors-to-total-full-time- equivalent (FTEs) ratios. These hospitals also tend to have higher salaries and better benefits than those with lower experience ratings. Bolstering the commitment of hospital staff – nurses in particular – to better engage with patients could help hospitals transition to a true patient-centered culture while also potentially improving financial performance.
The aforementioned Medicare VBP incentives can help drive a better patient experience as well but in a more modest way. Hospital reimbursements from Medicare and even private insurers are increasingly tied to quality performance metrics that capture patient experience along with clinical outcomes. Improving the patient experience is one of the pillars of the Triple Aim framework developed by the Institute for Healthcare Improvement to improve the U.S. health care system simultaneously pursuing three goals: improving the experience of care, improving the health of populations, and reducing per capita costs of health care.
Since 2012, hospital Medicare payments have been based on these three goals, with patient experience currently accounting for 25 percent. However, research shows that VBP incentives tied to patient experience account for around 7 percent of the association between patient experience and hospital financial performance.
Given today’s changing and uncertain healthcare industry landscape, hospitals that are able to anticipate, meet and even exceed patient needs are more likely to be financially successful. Hospital leadership and staff need to align with the mission and make the hard investments that leverage digital technology as well as patient insights.
Improving the patient experience can help a hospital improve its financial performance by strengthening customer loyalty, building reputation and brand and boosting utilization of hospital services through increased referrals to family and friends. But always remember, patient experience investments should never come at the expense of reduced investments in clinical quality.
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