Hospitals Should Prepare for Industry Disruption by Empowered Consumers

As the healthcare industry continues its transition to a consumer focus, the way healthcare consumers rate their care experience is increasingly correlated with the quality of providers’ care processes and their financial performance.

The healthcare industry is on the cusp of a new era in which patients are empowered to drive change. The advent of this era is marked by profound shifts in patients’ attitudes, preferences, engagement, and behaviors that even now are disrupting traditional approaches to care delivery.

Patients not only have more choice when it comes to how and where they receive their care, but also are taking on more financial responsibility than in the past. As a result, they are demanding better value from their healthcare interactions. It therefore behooves the leaders of healthcare organizations to take stock of these changes and adapt to the growing consumer-oriented expectations of patients.

A series of nationally representative surveys, published biannually by the Deloitte Center for Health Solutions since 2008, has provided clear evidence of these trends and the ways in which patients as consumers are increasingly driving industry transformation from the outside in. ^a The most recent of these surveys underscores how these changes are being driven by technology innovations and shifting market conditions, as well as patients’ increased financial responsibility for their care.

In the 2018 survey, respondents listed convenient location, suitable hours, and lower out-of-pocket costs as their top considerations for choosing a provider. Consumers are also paying more attention to cost. The percentage of consumers who research cost information has nearly doubled over the past three years—from 14 percent in 2015 to 27 percent in 2018. Here are a few highlights of the survey.

Healthcare consumers are becoming savvier shoppers. They increasingly are using reviews, ratings, and experiences from other patients to make informed decisions about where to seek care. In 2018, more than one half of surveyed consumers said brand and reputation were important when choosing a hospital.

More consumers are investigating quality information about physicians. In 2018, 23 percent of respondents said they had researched a physician report card while shopping for services—up from 14 percent in 2015.

Consumers are more engaged in their care and more focused on wellness. In 2015, three out of four consumers said they were partnering with providers to determine the most effective treatment decisions.

More consumers are using technologies to evaluate their fitness and set health goals. In 2018, 42 percent of consumers said they used technologies such as wearables, smartphone/tablet apps, and personal medical devices or fitness monitors, up from 14 percent in 2013.

Consumers are increasingly demanding innovative ways to interact with healthcare providers. In 2015, almost 70 percent of survey respondents said they were interested in technologies that enable better access to care, such as consumer portals and health and fitness monitoring devices. In 2018, about 30 percent of respondents said they were interested in using more advanced apps, virtual assistants, and live coaches to help diagnose symptoms, improve care, and to help improve their overall health.

Taking the Lead from a Brand and Financial Standpoint

Some healthcare stakeholders are struggling to make sense of these newly empowered consumers. Many hospitals are being forced to respond either to competitors that have reacted more quickly to this trend or to new entrants that want to fundamentally change the game.

This phenomenon already has played out in other industries. Consider the financial industry, where customers have effectively wrestled power away from retail bankers. From checking and savings accounts to investment management and mortgage banking, much of the financial industry is now customer-driven. Financial organizations that acknowledged this shift early and responded accordingly took the lead and sparked a wave of innovation that swept through the industry in a remarkably short time.

Hospitals similarly can become industry leaders and reap financial benefits if they can quickly and effectively meet the changing expectations of their customers. A 2016 analysis of scores from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS)—the most widely used hospital experience survey—found that hospitals having high patient-reported experience scores tend to be more profitable than other hospitals. ^b Researchers examined the relationship between HCAHPS scores and hospital performance measures such as net and operating margins and return on assets. The findings suggest a significant relationship between patient experience and financial performance, even after controlling for other hospital characteristics that can drive performance.

The report also determined that the association between hospital experience scores and profitability is strongest for those aspects that are most likely to be associated with better clinical care—particularly where the patient’s interaction with nursing staff is concerned. But can improving the patient experience also improve the quality of care that patients receive?

Although improving the patient experience can be viewed as a valuable objective by itself, distinct from the object of improving clinical quality, the two are often interrelated. Health plans, for instance, increasingly emphasize patient experience as a core element of care quality. In tying hospital Medicare payments to experience scores under the Hospital Value Based Purchasing Program, for example, the Centers for Medicare & Medicaid Services (CMS) said, “We also believe that delivery of high-quality, patient-centered care requires us to carefully consider the patient’s experience in the hospital inpatient setting.” ^c

However, consumer expectations don’t always mesh with provider quality requirements.

When rating a hospital experience, patients tend to focus on the tangible aspects of the visit, such as waiting times in the emergency department and how quickly nurses respond to the call button. But those factors might not be related to the quality of care the patient received. An anesthetized patient cannot directly observe a physician’s skill and judgment, staff teamwork, and compliance with surgical protocols, for example, and these essential aspects of healthcare quality cannot be accurately reflected by experience metrics. As a result, a patient might walk out of the hospital completely dissatisfied with the overall experience, despite having received high-quality care.

Recognizing that HCAHPS includes a wide range of clinical outcome and process-of-care quality measures from CMS, a 2017 analysis examined the hospital-level patient experience ratings to ascertain the relationship between patient experience and hospital clinical quality. ^d

The analysis found that hospitals that had higher experience scores also had better process-of-care (POC) quality scores, as illustrated in the exhibit below. Specifically, for example, a 10 percentage point higher number of respondents giving a hospital the highest experience rating relative to the number of respondents giving such a rating to lower-rated hospitals was associated with a 1.5 percentage point higher number of stroke patients treated properly to prevent blood clots and with a 20-minute shorter emergency department (ED) wait time from arrival to admission. Moreover, the link between patient experience and process-of-care quality is most apparent among hospitals that had the highest experience scores, as shown by the darker shading in the exhibit below.  

By contrast, the analysis of the connection between patient experience scores and outcomes-of-care metrics appears to be more nuanced. Hospitals that had “excellent” patient experience ratings had “excellent” ratings for some, but not all, clinical outcomes metrics. For instance, hospitals that received high patient experience ratings tend to have relatively low readmission and mortality rates, but they don’t always have lower hospital-acquired infection (HAI) rates.

The following factors underlie the association between patient experience scores and hospital clinical quality scores.

The extent to which the relationship between clinical care delivered and the quality of the care experience is apparent to patients. Clinical quality measures that are more visible and tangible for patients (e.g., ED wait times, readmissions) are more closely associated with patient experience ratings. By contrast, patients might find it difficult to ascribe experience ratings to rare circumstances where the relationship between the care and the care outcomes is less obvious, such as the occurrence of an HAI at the surgical site.

The quality of nurses’ communication with patients. A high experience rating from patients regarding their perception of how well communicated with them and the quality of relevant discharge information the receives can enhance the patient experience is strongly associated with a higher level of clinical quality. Indeed, patient experience scores pertaining to nurse communication and discharge information have the strongest association with the largest number of clinical quality measures, as depicted in the exhibit below.

Hospitals’ participation in value-based payment models. A hospital’s participation in such a model—through an accountable care organization (ACO) or bundled-payment arrangement, for example—can strengthen the association between the a highly rated patient experience and a high level of clinical quality.

Improving the Patient Experience: The Business Case

Responding to the rising consumer power in the U.S. healthcare system—and responding accordingly to customer demand—likely will require many healthcare organizations to undertake a large-scale transformation. And determining how best to invest in the patient experience is likely to be challenging for these organizations. Hospital executives face multiple priorities and resource demands, and many might be prone to question the business value of analyzing and acting upon patient experience data.

Yet the business case for improving the patient experience becomes clear if one recognizes how the patient experience, hospital financial performance, and clinical quality are inextricably linked. Investments in the patient experience, clinical quality, and overall financial performance can be mutually reinforcing strategies, and can help hospitals consistently and reliably deliver on the promise of value-focused and patient-centered care.

One way in which healthcare providers can begin to improve the patient experience is through technology—and in particular, by more effectively integrating technology to provide end-to-end customer service in a way that benefits patients and helps to ensure the organization is consumers’ first choice. For example, organizations may focus their efforts on reducing the proliferation of their contact access points by implementing a consolidated omni-channel contact center function underpinned with a comprehensive customer-relationship-management solution. Such an approach could promote a improved understanding of the customers served and enable the organization to personalize customer experiences and provide a broader, more timely, and more relevant set of services.

As in other industries, a superior customer experience often begins before services are needed. But for the many organizations that are still focused on creating a cohesive experience for consumers at the point of care, creating a customer experience that begins before care is initiated can be a stretch. To further complicate matters, many providers rely on contractors to do everything from scheduling, to furnishing payment services, to helping deliver the customer experience.

From the patient’s perspective, this piecemeal approach could create an inconsistent and confusing brand experience. For example, a patient’s experience with scheduling could be vastly different from the experience the patient has when paying for services. Hospitals that want to be the first choice for consumers should create a cohesive, coherent, and compelling brand experience that spans the entire patient-provider relationship, encompassing initial access, ongoing care, payment, and wellness.

In an environment in which many customers have more influence than ever, ensuring a consistent patient experience has never been more important. Here are some initial considerations for achieving this goal.

Identify the brand promise. The customer experience often is inextricably linked to the brand promise. Organizations that do not have a clear brand promise should focus on developing clarity around their brand to tie together all the threads that make up the customer experience—simply put, a consistent, personalized, transparent, and secure experience that can be counted on to bring value to the customer. A brand promise that takes full account of these elements can be a practical tool in decision making.

Make a map. In creating a map of the customer experience, organizations should consider the steps a healthcare consumer must traverse from pre-engagement all the way to ongoing care and billing. A key point of focus should be to identify aspects of the organization that directly shape the experience and determine how they interact with one another. It is one thing to have a grand theory of customer experience, but it is another to make it a reality, and that requires a thorough understanding these mechanisms.

Recognize the central role of technology. A hospital’s executive team might not necessarily turn to the CIO to lead a new customer-experience initiative. But given the central role technology now plays in the customer experience, ensuring that a highly engaged technology leader has a seat at the table can be critical.

Get your partners on board. The healthcare experience of patients as consumers increasingly is determined by a patchwork of partners—from within and external to the organization. These may include an organization’s enterprise partners in terms of physicians and other care providers, but they also can include external trading partners, such as scheduling or billing solutions vendors. It can be critical to connect the dots and break down the internal silos. For instance, reviewing the hospital’s social media presence can help hospital leaders understand how marketing contributes to the overall brand promise. These internal stakeholders—as well as the external partners that can enable a holistic customer experience—should be brought together in a cohesive way to execute against the hospital’s overarching strategy.

Joining the Vanguard

To prepare for the consumer-centric shift in health care, provider organizations must undergo a large-scale transformation—and many organizations will find it challenging to do so. Yet those that can undertake this transformation thoughtfully, with a truly customer-centric focus, stand to benefit profoundly from financial, brand, and quality perspectives. These organizations will be best positioned to become the leaders in the next wave of innovation that will be necessary to advance the U.S. healthcare industry to the next level of excellence.

David Betts, MBA, 
is a principal, Deloitte Consulting LLP, Pittsburgh.

Andrea Balan-Cohen, PhD, 
is healthcare research leader, Deloitte Center for Health Solutions, Washington, D.C.

Footnotes

a. See Betts, D., and Korenda, L. “Inside the Patient Journey: Three Key Touch Points for Consumer Engagement Strategies: Findings from the Deloitte 2018 Health Care Consumer Survey,” Deloitte Insights, Sept. 25, 2018.

b. Betts, D., Balan-Cohen, A., Shukla, M., and Kumar, N., The Value of Patient Experience Hospitals With Better Patient-Reported Experience Perform Better Financially , Deloitte Center for Health Solutions, 2016.

c. CMS, “ Medicare Program; Hospital Inpatient Value-Based Purchasing Program;  Final Rule,” Federal Register, May 6, 2011.

d. Betts, D., Balan-Cohen, A., Value of Patient Experience: Hospitals with Higher Patient Experience Scores Have Higher Clinical Quality, May 2018.