Making the Case for Patient Loyalty in a Changing Marketplace

As healthcare costs escalate and payment rates decline, healthcare organizations are continually seeking ways to widen margins. Traditionally, providers have relied on expanding market share to drive revenue. Although that is still a valid approach, the ways in which organizations increase market share are changing. Whereas hospitals once aimed to put more "heads in beds," emerging payment models are making that strategy obsolete. Today's healthcare organizations are shifting their focus toward initiatives that enhance patient satisfaction and customer service and, ultimately, create strong patient loyalty.

As organizations turn toward accountable care models and other value-based care delivery initiatives, capturing and preserving patient loyalty will become even more important. A strategic orientation focused on increasing long-term steerage and preventing leakage will be necessary to offset any potential dips in revenue as health care moves from fee-for-service to fee-for-value payment.

Building patient loyalty has its challenges, particularly as patients become savvier healthcare consumers. Providers cannot assume that their patients will pursue a long-term relationship with a physician and/or hospital. Instead, patients are prepared to shop for the highest quality, greatest convenience, and/or most reasonable price. PwC research indicates only half of patients will always stay with a hospital or physician group responsible for their care instead of going out of network.1 This finding suggests that the remaining 50 percent may or may not remain loyal depending on the situation. Issues that could factor into their decisions are accessibility, customer service, price, and value-that is, the level of quality patients receive for the price they pay. How a provider can influence the perception of value and make it more of a reality for patients has therefore become a critical success factor for physicians and health systems.

The Business Case for Cultivating Patient Loyalty

With so much changing in health care-new regulations, evolving payment models, ICD-10, and Meaningful Use Stage 2-the need to launch a large-scale initiative around patient loyalty may be a hard sell. However, there are many compelling reasons to seek new ways to draw patients to the organization-and to keep them coming back. What follows are some key business drivers to consider.

Revenue. An obvious incentive for loyalty programs is the potential to increase revenue. "When patients seek care at the same organization over time, they bring revenue into that organization," says healthcare marketing consultant Arthur Sturm, president and CEO of Chicago-based SRK Solutions. "A customer's true value is not at the transactional level but downstream. For example, someone can visit a hardware store and spend $15 on a hammer. What matters most in that transaction is that the customer had a good experience and comes back to buy more materials for a larger project. By enhancing patient loyalty, a hospital or health system will not only reap the revenue benefits of a single patient transaction, such as surgery or an emergency room visit, but also subsequent interactions, including rehabilitation, follow-up appointments, and chronic care management."

Just as loyal patients can grow revenue, those patients who seek treatment elsewhere can pull revenue away from an organization. The provider loses the opportunity to treat that patient and, in some instances, family members and friends as well, depending on the reasons behind the departure. Similar to customers in other industries, healthcare "customers" (patients) are likely to share negative experiences. A negative experience can decrease not only their loyalty, but also that of their loved ones and, in the age of social media, far greater circles. Furthermore, organizations can lose revenue through downturns in their HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) scores-the federally mandated patient satisfaction survey.2 HCAHPS scores account for 30 percent of each Medicare inpatient prospective payment system (IPPS) hospital's value-based purchasing (VBP) score. Consequently, a dip in HCAHPS has a direct impact on VBP payment.

Costs. Programs that preserve patient loyalty allow healthcare organizations to deliver more consistent and reliable patient care over time, which decreases the cost of delivering that care. This ability to drive quality and savings through ongoing steerage is particularly important as organizations pursue accountable care organization (ACO) models. "Although ACOs have the potential to reduce the cost of health care, the open access associated with some benefit designs may present a challenge for providers," says Chris Lloyd, CEO for Memorial Hermann Physician Network and Accountable Care Organization, based in Southeast Texas. "It can be difficult to manage patient risks and the cost of care within a network if patients can freely choose to go outside that network. For example, if an organization uses evidence-based protocols to manage certain chronic conditions, such as diabetes or asthma, and a patient with one of those conditions chooses to seek care outside of the ACO network, those evidence-based protocols may not be applied, resulting in inconsistent patient treatment and negating some of the protocol's benefits. By enhancing patient loyalty, you can ensure that patients continue to seek treatment at your organization and thus receive more consistent and cost-effective care."

Quality. In addition to limiting costs, consistent care can translate to better quality and improved patient outcomes. "When patients receive regular care through evidence-based protocols, uniform processes, standardized order sets, and so forth, they tend to have better health outcomes," Lloyd says. "They may have fewer complications, fewer réadmissions, and decreased lengths of stay, for example. Although increasing revenue and lowering costs are compelling reasons for pursuing patient loyalty initiatives, the fact that these efforts can fundamentally improve the care we provide should be the biggest impetus. It isn't just about the financial drivers; it is the right thing to do for patients."

Adaptability. New care delivery models, such as ACOs and narrow networks, are becoming more common as payers and providers partner to provide value-based care. "Those organizations with strong market share and high patient loyalty may be more attractive candidates for a narrow network or ACO," says Jim Smith, vice president of planning and business development for Botsford Health in Farmington Hills, Mich. "Organizations that are structured to provide high-quality care while keeping patient satisfaction up and costs down will put themselves in the best position to take advantage of new approaches to patient care and payment."

Staff satisfaction. When patients aren't loyal to a facility, it can negatively impact staff satisfaction, recruitment, and ultimately retention. "Good health care is based on relationships, and if staff and patients don't have a good relationship, it can damage satisfaction on both sides," says Nicole Clapp, president and CEO for Grant Regional Health Center in Lancaster, Wis. "Many care providers choose to work in health care to make a difference in the lives of patients. If they don't feel like they are doing that, it can be hard to keep them engaged and enthusiastic, which can further dampen satisfaction scores as well as care quality. Staff fulfillment and loyalty interweave with patient satisfaction and retention. By elevating one, you automatically boost the other."

Strategies for Building Patient Loyalty

At the heart of any effort to build patient loyalty is the patient experience. "Simply put, if patients have a good experience with a healthcare organization, they will probably return, and if they don't have a good experience, they may feel compelled to seek care elsewhere," says SRK's Sturm. "Even if the patient does not have the ideal health outcome, he or she can still be highly satisfied with the organization if the entire experience from scheduling and registration to discharge and billing is positive."

There are myriad ways to improve patient interactions across the healthcare continuum. Following are a few methods to consider. Although these strategies can apply to any healthcare organization, they are especially meaningful to those seeking to thrive in an accountable care environment.

Quantify the opportunity-where possible. Getting a handle on patient retention can be difficult because it is hard, if not impossible, to accurately measure loyalty. "You can't measure retention in a statistically meaningful way," Sturm says. "You can conduct surveys to gather people's perceptions about the care experience or create programs that respond to patient complaints, but these don't fully quantify whether you are in fact building loyalty. Looking at repeat visits over time-something that other industries do to measure loyalty-doesn't even paint a complete picture. People don't choose to be sick, and so if they aren't visiting the hospital or their physician, it doesn't necessarily mean they are not loyal. They may simply have no need to visit."

Despite the difficulty in identifying patient loyalty, patient satisfaction surveys can give a glimpse into patient perceptions and the likelihood that patients will remain loyal. "One reliable question for getting a sense of patient loyalty is 'Would you recommend this organization to friends?'" comments Sturm. "If your organization has a good score in response to this type of question, then you can be reasonably confident that you have good patient retention."

As an example, Spectrum Health in Grand Rapids, Mich., uses the "likelihood to recommend" score as a key measure of patient experience. The organization tracks and reports the measure and ties it to compensation incentives. It also reviews the metric during hospital-wide leadership meetings, where discussing patient satisfaction data is a standing agenda item.

Many organizations rely on the HCAHPS survey to assess patient satisfaction and the potential for patient loyalty. The federally mandated survey gathers patient perspectives on a plethora of topics ranging from communication with doctors to the quietness of the environment. A potential downside to the survey is that it can be challenging to translate resulting data into meaningful staff goals for improvement. Hoag Memorial Hospital Presbyterian in Newport Beach, Calif., took a creative approach to this problem, developing a communication and marketing campaign that increases staff exposure to and understanding of the HCAHPS data. The organization coined the phrase "Dot Up," which came from a visual display of the HCAHPS percentile ranking. The display compares Hoag with other benchmark hospitals using different colored dots to represent varying levels of performance. "Dot Up" is literally a translation of Hoag's goal to move the "dot" up- that is, to shift Hoag's ranking to the 90th percentile. The phrase is now used as a rallying call throughout the organization for strong customer service and patient satisfaction. The hospital created "Dot Up" posters of all HCAHPS categories along with a simple dashboard to compare the numbers and percentages. The newly formatted and designed information has begun to enhance staff's understanding of the results and is critical to improvement efforts throughout the hospital.

Although the HCAHPS survey is a valuable tool, it is released only quarterly, and many organizations want more "in the moment" feedback about patient satisfaction. Consequently, organizations are also turning to real-time surveys delivered either during the patient interaction or directly following it. Although not as comprehensive as HCAHPS, these brief surveys can take a more immediate pulse on patient perceptions.

Talk with patients who choose not to return. In addition to reviewing survey data, organizations may want to directly contact patients who decide to seek care elsewhere and inquire about the reasons behind the decision. "What we think are the reasons for a patient leaving aren't always the reasons," says Memorial Hermann's Lloyd. "Sometimes you need to go outside the traditional patient satisfaction tools and dig deeper. For example, if a patient is enrolled in a clinical program, such as one aimed at addressing diabetes or congestive heart failure, and the patient is not scheduling regular appointments or stops showing up for planned visits, then the provider should find out why the patient is not compliant. Perhaps there is a satisfaction issue or some roadblock-such as inconvenient appointment times or lack of transportation-that the organization can address. Not all problems are fixable right away, but you can at least identify the gaps and work to address those long term."

Look to a patient advisory council. In addition to surveying patients, organizations may want to think about creating a patient advisory council (PAC). This is a diverse group of patients and family members who volunteer to meet regularly, offer input, and share perceptions on a variety of healthcare delivery issues. Organizations may turn to this group when seeking to launch a new program, revamp marketing strategy, or respond to a negative patient event. For example, if an organization is launching a new mobile health application, it may want to test the technology with members of the PAC to get feedback and suggestions for improvement. PACs are often proactive as well, looking to tackle issues the organization faces and drive improvement from the patient point of view. Revamping patient education materials might be a logical project on which a PAC can work, with the group aiming to make the materials easier for patients to read and understand.

Take a lesson from retail. As health care becomes more consumer-driven, hospitals and health systems may want to take a page out of the retail playbook on how to court and retain customers. "Organizations need to decide whether they are going to be like low-cost Wal-Mart, mid-tier Target, or premium-level Nordstrom," says Sturm. "These stores are successful because they fully understand their customer base and what those individuals value. They have designed their entire business strategy around what the customer wants and how the store can best deliver it. In each case, they let consumer needs shape their value proposition."

Healthcare organizations can take a similar approach, listening to their current patients and responding to their needs. "Spend time doing some intense learning to determine who you are and where you fit in the market," Sturm suggests. "One question to ask is what trade-offs people are willing to make to use your facility versus the competition. This will show you the type of value strategy you need to pursue. Realistically, an organization can't embrace all three models; it has to select one and run with it."

Make things convenient. Easy appointment scheduling, expanded hours, and streamlined referrals are all things that can ensure a patient's interaction with an organization is efficient and productive. "Providing a convenient patient experience is not a differentiator between good and great organizations anymore. It's a requirement for any hospital that wants to attract and retain patients," Sturm says. "Patients expect healthcare organizations to offer easy access-online bill pay, automated scheduling, Saturday hours, and such. The retail establishments with which they interact offer these levels of convenience, so why shouldn't the healthcare provider?"

Technology can make healthcare delivery more user-friendly. For example, a patient portal can facilitate scheduling, communication, and follow-up. Many organizations are beginning to implement portals as they prepare to comply with Meaningful Use Stage 2 requirements that mandate greater patient-provider communication. With some portals, patients and their families can make appointments, send questions to a provider, request referrals, and even refill prescriptions. Patients also may be able to review clinical information, such as test results, discharge instructions, and procedure descriptions. In addition, portals can offer a convenient way for patients to "look back" at their health history and gauge how they are (or are not) progressing.

Mobile technology can also foster convenience and accessibility. With 56 percent of the population having a smartphone and that statistic projected to increase over time, leveraging mobile technology to enhance the patient experience is not only a good idea, it may be essential to maintaining patient loyalty in the future.3 According to a recent survey by Accenture, patients want to use mobile technology to streamline patient-provider interactions, using it to refill prescriptions, make or cancel appointments, and receive reminders for preventive or follow-up care.4 Although patients do not want to sacrifice face-to-face interactions with providers, they are turning to mobile technology to enhance the convenience factor.

Set service standards. Customer service training is often the cornerstone of a solid patient loyalty program. Educating staff on how to interact with patients by putting patients at the center of the care experience is essential to retaining patients. Training can take many forms, but fundamentally should outline the organization's expectations for customer service and provide staff with tools to meet those expectations.

"As part of our customer service philosophy, we developed five service standards that are used to focus training efforts," says Botsford's Smith. 'These standards emphasize the importance of a positive first impression, respect and courtesy, teamwork, professionalism, and safety. Our goal is for staff to live these standards every day, fostering a consistent patient experience. We provide ongoing training for staff related to these standards and often offer scripts to ensure that staffpatient interactions reflect a consistent message."

Bring in the experts. When developing customer service training programs, many providers, such as Grant Regional, are turning to consultants or companies known for their high-level customer service. "We were looking to increase market share and establish patient loyalty," Clapp says. "Grant Regional is a small, critical access hospital and the only facility in town. Even with that, we had only 40 percent market share, and people often bypassed us, choosing to travel 20 to 45 minutes to another hospital to receive care. We wanted patients to select our facility when they had a choice, and not just when there was an emergency and the ambulance brought them here."

Grant Regional turned to the Disney Institute to create an education-driven, customized program that provides ongoing opportunities to sustain improvement. The program offered intensive training for Grant Regional's staff and some of the clinics and primary physicians that serve as a referral base to the hospital. It also offered some unique insights into the patient experience and generated creative solutions for improvement. "It allowed us to take a step back and see the organization from the patient's perspective-things we may not have noticed before because we were so accustomed to the environment," Clapp says. "For example, we redecorated our patient rooms to give patients more autonomy and less of an overly clinical experience. We designed each room to have a 'backstage' and 'onstage,' because we realized that patients don't want to see sharps containers, complex equipment, and other items that might make them nervous. So, we designed these items to be 'backstage.' 'Onstage' is a quiet, welcoming environment that is comfortable for sleeping and healing. Each room is decorated in a theme, and no two rooms are alike."

Pursuing a comprehensive customer service model has helped Grant Regional change the way it interacts with patients, and the organization has seen some quantifiable benefits as a result. "Our market share has grown by 13 percentage points, our guest satisfaction is around 96 percent, and our staff turnover is less than 10 percent, down from 18 percent," Clapp says. "We have become much more customer-focused. A patient is not just the gall bladder in 10A; she is Mrs. Sheila Jones who has a pet at home and Is missing her grandson's ballgame."

Sustain the work. Customer service training cannot be a one-and-done initiative. Staff members must be able to use what they learn in training and apply it to diverse situations every day. Maintaining a consumer-focused mind-set can be challenging without specific ways to sustain the effort.

Henry County Health Center in Mount Pleasant, Iowa, offers service excellence training every year, and staff members are required to take the training in order to receive their merit increase. The organization has a multidisciplinary service excellence team that meets annually to determine the focus of follow-up training. Workshops are developed based on the results of patient satisfaction and staff engagement surveys.

Offer robust service recovery. Despite a commitment to customer service, sometimes a patient experience does not measure up to expectations. Having processes in place to identify and quickly respond to these incidents is key to preserving patient satisfaction and reducing the likelihood that the patient will seek treatment elsewhere. "Often you know if a patient is unhappy before he or she leaves your facility," Smith says. "A patient may mention something to the nurse or physician or even show it in his or her body language. We empower staff to address these situations head on before a patient leaves. Many times, the patient just wants to be heard. Our goal is to communicate that we are concerned about their experience, are listening to their frustration, and are responding to their concerns. To facilitate these conversations, the nurse manager has a set of tools-coupons for free meals in the cafeteria, discounts at the gift shop, movie tickets, and so on-that staff can give to a patient to offset a negative experience. Obviously, a tool's degree of success will depend on the severity of the customer service issue."

Discharge phone calls can also present an opportunity to learn about and respond to negative patient feedback. "As with an in-person interaction, we use follow-up phone calls to acknowledge any patient concerns, thank patients for their input, and commit to making things right," Smith says.

Another avenue is monitoring social media sites because "tweeting" can be one way that individuals voice their displeasure about a care experience. By regularly scanning this environment, providers can identify unhappy patients, promptly correct a perception, and possibly avoid a patient departure or the sharing of negative comments with others in the future.

Track referrals. Although the patient is ultimately the one who decides whether to remain loyal to an organization, physician referrals also play a role. Patients respect and rely on the opinion of their physician as to where to seek in-depth care. If physician referrals are down from a particular physician, a larger physician group, or in total from within the health system, it may be a bellwether for a larger issue.

"We watch our physician referrals very closely, and when we see a concerning pattern or drop in the number of referrals, we try to address it," Smith says. "We look at referral patterns over time and in comparison with the market to be sure that any change isn't merely a dip in the market but reflects a real concern. If we see a negative trend, then we have a team of three senior leaders that will meet with the physician in his or her office to discuss the reasons behind the data and what we can do to make things better. Through this meeting, we can identify issues that warrant attention and communicate our commitment to partnering with the physician."

Getting proactive with referral management can also be beneficial. "We have a list of primary care physicians and specialists that refer to our hospital," Smith says. "Our senior leaders aim to visit with each physician on the list on an annual basis to talk about new programs and garner feedback about referral challenges. A lot of hospitals have liaisons that meet with physicians each year, but we have found that our physicians respond better to direct senior leadership interaction. It cuts out the 'middle man' and brings together people who can actually effect change."

Work with payers. A prime frustration for patients is that their insurance company and healthcare providers may not seem to work together or even talk with one another. Hospitals and health systems that partner with payers to improve the patient experience, whether collaborating on ways to better educate patients about service authorization processes or providing efficiency in insurance verification, can overcome some of these frustrations. "Open communication between providers and payers is essential," Lloyd says. "You need to understand what your payers are already doing to foster patient satisfaction and see if the programs you're working on will work together with theirs. Since both parties have the same goal of providing the best possible care to patients, it seems logical that payers and providers should work together."

One potentially valuable partnership between a provider and payer could include offering a provider-centered ACO product. In a nutshell, this is a health system-centric care model that is integrated with an insurance product. Plan design fosters affordable care while promoting convenience, enhancing quality, and encouraging a better patient experience.

With many of these plans, financial incentives or disincentives for patients limit movement out of the defined ACO network. Such structuring, coupled with a focus on providing convenient hours, streamlining access, and building strong providerpatient relationships, can enhance an organization's ability to retain patients.

Typically, these plans also involve provider incentives that aim to mitigate the risks involved with managing a population's health. Providers are encouraged to support an integrated care management approach, use evidence-based care models, and focus on proactive chronic care management.

Significant scale is required to make this type of plan work. Providers must have sufficient network size, geographic breadth, and access to an appropriate number of covered lives. Organizations that partner with health plans to investigate and implement these kinds of provider-driven ACO options can spread risk and lower costs while creating market leadership opportunities.

Driving Patient Loyalty and Retention

Improving patient loyalty and retention is not something that happens overnight. "In many instances, it takes a cultural shift to really bring loyalty to the next level," Clapp says. "Organizations that transform themselves into customerdriven entities that continually look for ways to provide the best possible patient experience will be the most successful in drawing patients to their facility and keeping them coming back for care."

By committing to improve patient stickiness and prevent leakage, an organization can not only drive up market share but also better lay the groundwork for emerging care models. This orientation will benefit the organization in the long term and help it to remain viable as various payment strategies take hold.

OUR SPONSOR SPEAKS

WORKING WITH PAYERS TO SUPPORT LOYALTY

Charles Kennedy, MD, CEO of Accountable Care Solutions from Aetna, discusses using health plan design and other strategies to promote patient retention.

Q How can providers collaborate with payers to help establish consumer preference and build loyalty in today's evolving, increasingly competitive marketplace?

A Co-branded health plans, where a payer holds the insurance license and handles all of the operational functions while the health system acts as the care network, are an excellent way for providers to participate in the change that is happening in health care today. In addition to helping attract an entirely new base of patient-members, provider-centered commercial plans give provider organizations an opportunity to create value-based products that reflect the specific needs of their local community. As a result, they are able to create a competitive advantage and drive more revenue. Banner Health Network launched a co-branded product in the Arizona market targeting small and mid-size employers in November 2011. This plan provides access to Banner's full network of services, including 29 key facilities and more than 5,000 primary care physicians and specialists.

Q How does health plan design influence patient loyalty?

A The right benefit design can help steer patients to the right providers at the right time. Traditional approaches to benefit design, such as deductible and co-pay differentials, are still viable ways to build volume. Giving individuals a financial incentive to stay in network can help to reduce leakage and promote loyalty, particularly when coupled with frequent messaging campaigns that remind members the best benefits are received when they seek care from designated providers.

Q What other strategies can providers employ to help keep patients satisfied and in-network?

A For a growing number of patients, the availability of care management and patient engagement tools dramatically increases the value of staying in-network to seek care. With smartphone apps that simplify day-to-day tasks, such as finding a doctor or scheduling an appointment, the patient experience not only becomes more convenient, but also feels more personalized. Patients value access to their clinical history, and providers that offer this access via connected clinical systems can motivate patients to stay in the system. Likewise, care management programs that simplify and coordinate the care of chronic conditions can help to extend and strengthen the doctorpatient relationship, which also helps to build loyalty. Additionally, analytics and informatics can provide further insights about where and how patients are choosing to receive their care. Acting on these analytics can assist with anticipating patient needs and illuminate ways to help patients stay satisfied and in-network.

Source: Accountable Care Solutions from Aetna.

Accountable Care Solutions

from aetna

Accountable Care Solutions from Aetna empowers each provider organization to realize its unique strategic vision of value-based care through patient-centered health solutions, an advanced technology suite and flexible health plan services. We work closely with our clients to deliver the strategic insight and market intelligence needed to jointly design and build more sustainable business models that allow providers to reduce costs, improve care quality and deliver a better experience for patients.

About HFMA Educational Reports

HFMA is the nation's leading membership organization for more than 39,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, and other organizations. HFMA's purpose is to define, realize, and advance the financial management of health care. HFMA educational reports are funded through sponsorships with leading solution providers. For more information, call 1.800.252.HFMA, ext. 330.

Endnotes

1 Medicare ACOs and Shared Savings Models, PwC's Health Research Institute, November 2011.

2 Ziskind, A., "Enhancing Patient 'Stickiness,'" Executive Insight, ADVANCE Healthcare Network, June 18,2012.

3 Smith, A., "Smartphone Ownership 2013," Pewlnternet, a project of Pew Research Center, June 5,2013.

4 Is Healthcare Self-Service Online Enough to Satisfy Patients?, Accenture, June 19,2012.