Consumer experience hits the pocketbooks of healthcare companies

The consumer experience matters to healthcare businesses, especially with its connection to financial penalties and bonuses. Private insurers who cover Medicare members were eligible for more than $3 billion in bonus payments in 2012 based on quality ratings.¹ The program, known as the Medicare Advantage Five-star Quality Rating system, relies on consumer input for nearly half of its quality measures.²

Hospitals and health systems are feeling the pinch as nearly one-third of the federal government’s value payment program connects to consumer experience and satisfaction. About $850 million, or 1% of total reimbursement in 2013, could be held back as a part of the federal government’s Hospital Value-based Purchasing program.³

Customers support these effects. About half of consumers surveyed by PwC’s Health Research Institute said that customer feedback should affect payments to healthcare organizations. Nearly 70% of consumers have used reviews to make healthcare decisions related to their doctor, hospital, insurance company or pharmacy. And more than 60% said that a hospital’s quality of care affects their healthcare decisions.⁴

More consumers have read reviews on Consumer Reports and blogs, but consumers are also discovering government-sponsored websites such as the Centers for Medicare and Medicaid Services and the National Committee for Quality Assurance.

One way providers are improving the patient experience is through the patient-centered medical home, which uses the primary care physician as a central point of coordination across the care continuum. All 50 states have medical home efforts, with 44 passing 300+ related laws, and more than 38,000 physicians affiliated with medical homes, an eight-fold increase in the past five years.⁵ Patients in medical home practices reported higher satisfaction with care, access to care, interpersonal experience, technical quality and communication.⁶ Success has been attributed to the reduction in bureaucracy, consistency in care, and providing one easy hub for patient health discussions.⁷

Healthcare organizations are already using positive quality scores as marketing tools. Nearly 40% of Medicare Advantage members are currently served by four to five star health plans, which are the highest ratings available under the bonus program, and the plans with high customer satisfaction scores have increased by 20% over the last year.⁸ The industry recognize the importance of addressing negative customer input as well. Many companies are taking advantage of social media to address a consumer issue either immediately online or via a follow-up phone call. Nearly 70% of consumers surveyed expected a response to complaints within a day, while 40% expected it within a few hours.⁹

Implications

• As healthcare companies develop new ways to raise their quality scores through improved consumer service, they need to consider how consumers use and contribute to the increasing amount of quality data.
• Providers and insurers should educate consumers on quality metrics and how to interpret and use the scores. This can be done by training call center representatives and posting online messages during customer service inquiries. Healthcare companies should use all consumer touch points where education could be relevant.
• Moving beyond surveys and using consumer research to get a more complete picture of consumers and their health needs will be a differentiator. Safety net hospitals are particularly vulnerable, given their history of lower patient experience scores.¹⁰ (See issue on “Consumer revolution in health coverage”)
• Establishing a well-integrated and thoughtful consumer program that ties in with business needs will be more important than ever. Insurers and providers have shifted hiring practices to include individuals with the skills and talents to connect with consumers and understand how to collect and use customer data. Chief experience officers have become increasingly popular in the health sector, with one in ten hospitals giving accountability for the customer experience to a senior member of the leadership team.