Patient Satisfaction: Why Hospitals Are Losing the Battle for Patient Revnues

Sometimes you choose to write; other times you have no choice but to write. This is one of those other times.

For those of you who believe most business situations can be tied to something related to Mel Brooks you will appreciate this. In his movie History of the World Part One, Brooks plays the role of Moses descending from Mount Sinai with stone tablets of the fifteen commandments.

http://www.youtube.com/watch?v=8YX-gqRdK_8

One set of five of them falls, hence the reason there are only ten.

Several hundred of you have read my presentation Step Aside HCAHPs; The Questions Hospital Executives Should Be Able To Answer.

http://www.slideshare.net/paulroemer/step-aside-hcahps

One reader remarked that HCAHPs includes thirty-two questions, not the twenty-seven that were referenced in my slide deck.  I would like to be able to argue that as I was leaving CMS I dropped the stone tablet containing questions 28-32. I would also like to be able to fly.  Unfortunately, I can do neither.

That said, focusing on the number of questions in the survey obfuscates the point.  The number of questions CMS put forth has only a little to do with the issue of whether their questions constitute the Total Quality of a Person’s Encounter (TQE) with the hospital.

Image

As the picture above depicts, the effort to address patient experience only from the perspective of HCAHPs ignores much of what patients experience.  That same effort ignores all of what prospective patients, people who are trying to decide where to buy their healthcare, experience.

Let’s say your hospital treats five hundred patients a week, and thirty percent of them (150) return their surveys five months later.  The hospital may then initiate a program or two to try to raise its lowest scores.  Even if it is effective, it will not impact the experience of those who completed the survey, but it may increase slightly the scores of some future group of respondents.  The only people who will ever know are future patients.

People who will never know, and who don’t know anything about your HCAHPs scores are the people who were never your patients.  In know I am stating the obvious, but I do so because the potential revenue from that group, from the non-patients and the prospective patients, is probably greater than the revenues generated by the current patients.

Let’s also say that your hospital, the one that treats five hundred patients a week, also receives a thousand phone calls a week, and that three thousand people a week ‘visit’ the hospital via the internet.  Let’s also add another five hundred people a week who visit your patients.

That totals forty-five hundred people who experience the hospital in one form or another.  Were they satisfied?  Who knows?  They were not surveyed.  Nobody asked them what they liked. Nobody asked them if they found what they were looking for.  Did any of them decide to buy healthcare from your hospital?  Why or why not?  Did your internet presence meet their need; did the call center or the switchboard?

The lifetime value of a patient is estimated to be between $180,000 to $250,000.  The average number of people per household is three. So, for every patient you can attract and retain, plus their family members, their potential value to your hospital is $540,000 to $750,000.

Instead of Patient Experience Management, hospitals should be focused on Patient Equity Management. If a hospital lost four $2,000 computers in a week, it would learn quickly how not to lose a fifth. Hospitals lose patients and potential patients every day.  They do not know how many.  They do not know why. And, they do no know how to get them back.

Now watch what happens.  What if of the forty-five hundred people—the non-patients—you could get one percent of them (45) in any given week to decide to become your patient?  What might that amount to in terms of revenues? If you can get one percent a week, over a year, 45 people become 2,340.  Twenty-three hundred and forty people multiplied by the lifetime value of a single person’s revenue is a really big number—about four hundred million—a number so big it is silly; multiplied by the value of their family members is too big for me to count.

Now there will be those who want to argue that my numbers are way off.  To you I suggest that you make them smaller, make them a lot smaller.  Even if I am off by a factor of a hundred, which I am not, that is a $4 million dollar annual increase.

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