How Hospitals Are Adapting to the Consumerization of Health Care

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New competition, changing payment models and more knowledgeable, price-conscious consumers are forcing hospitals to change their approaches to attracting and serving patients. Hospitals recognize the need to become more patient friendly as they face more competition from retail, online and other sources of care, and as patient satisfaction has become a small-but-growing component of Medicare reimbursement.

With an estimated 33 percent of Americans currently living within 10 minutes of a retail clinic, the number of such clinics expected to double by 2016i, and a growing array of consulting and treatment services available online, hospitals realize they need to transform from being somewhere patients have to go to somewhere patients want to go. Hospitals that do not do so will lose more than just the patients who come to the emergency department for strep throat. Nearly half of patients surveyed said they would choose new, non-hospital options for routine medical procedures, including 37 percent that are willing to have at-home chemotherapyii.

For hospitals, one of the imperatives for becoming more patient centric is to become more consumer oriented. To make this shift, they are reexamining all aspects of their operations. Hospitals are borrowing concepts and processes from other consumer-facing industries like retail and hospitality and adapting them for health care. The drive to transform care delivery and patient engagement is influencing decision making and investment for initiatives large and small, including architectural design, hiring and staff development strategies, IT investment priorities and even how staff members enter a patient room.

“Start with the consumer and work backward,” advises the PwC Health Research Institute in its 2014 report Healthcare’s new entrants: Who will be the industry’s “Consumers will abandon companies unable to deliver care on their terms. Health organizations should understand consumers’ needs and desires, creating new options for access, information and products and services. Consider rethinking operating hours, availability of clinicians via digital devices and transparency of pricing and quality.”

For hospitals, this will require the development of new models and processes to improve care quality, convenience and satisfaction by increasing patient engagement. On the operations side, rounding and billing are receiving considerable attention because they each have a strong correlation to patient satisfaction. Staffing is also being affected, but the changes are more philosophical than operational. And inspiration from retail has been a positive catalyst for change, as highlighted below.

CHOC Children’s Hospital in Orange County, Calif., updated its rounding processes by issuing iPad® devices with a self-developed rounding application to its clinical and executive staff. “The application prompts us to ask patients and their families how we as a staff are doing while we are making rounds,” says Matt Gerlach, executive vice president and chief operating officer at CHOC. “We used to do surveys, and we still conduct them. The problem with surveys is the feedback you get might be two months old. With our iRounds system, if there is an issue with clinical care, housekeeping, maintenance, food service or anything else, we know immediately and can address it proactively.”

Long Island Jewish Medical Center in Queens, N.Y., took a similar, but lower-tech approach to improving the patient experience. As part of a larger program that applied hospitality-industry principles to staff training, it created a hospitality observation team that works somewhat like secret shoppers used in the retail industry. The team observes how employees interact with patients and rewards those that go beyond the call of duty (see a profile of this program on the Hospitals in Pursuit of Excellence (HPOE) website:

Facility Updates
Hospitals are also changing the physical environment with patient satisfaction in mind. Common examples include updated signage and aesthetic touches like artwork and fountains. Community Memorial Health System is building a new hospital at the site of an existing facility in Ventura County, Calif. The address won’t change, but many other things will. The new hospital is being designed to support the lean principles the hospital is embracing and will be comprised of all private rooms, whereas the current facility has very few. “That will really help us improve the patient experience,” says Will Garand, vice president of planning and managed care.

Billing has been a persistent source of frustration for patients and their families, and with many patients now paying a larger share of their medical expenses, hospital bills are coming under more scrutiny. Several studies have found a direct correlation with billing satisfaction and overall patient satisfaction. There are now multiple commercial solutions that were developed specifically to modernize hospital billing and make it more patient friendly, and users are reporting strong results.

“All we used to hear were complaints, and I’ve been in the field for 24 years. Now we’re getting our first positive comments, which is great,” says Cindy Rudow, revenue cycle executive and former director of patient financial services at Valley Care Health System in Livermore, Calif. Valley Care converted to Simplee®PAY, a patient and billing solution from Simplee that had earned the exclusive endorsement of the American Hospital Association. Patients now automatically receive easy-to-read itemized bills instead of summary statements, and the solution gives them automated, self-service payment options that Valley Care Health did not offer before. “Millennials love the option of paying online,” says Rudow.

“If you can’t bill in a clean, simple way, it makes your entire organization look dysfunctional,” says Alex Mohseni, MD, FACEP, chief innovation officer at Emergency Medicine Associates, which manages emergency departments in Washington, D.C., and the surrounding region. “I think hospitals underestimate how important billing is as a patient touch point. No other industry is still doing billing in the outdated fashion that most health care organizations are doing it. Any unnecessary friction in the payment process will lead to lost revenue.”

Mohseni’s very title — chief innovation officer — is another example of the changes organizations are making in response to consumer-driven care. The C-suite is being redefined as hospitals create positions like chief innovation officer and chief experience officer. The Cleveland Clinic established its Office of Patient Experience and promotes the concept through its annual Patient Experience: Empathy + Innovation Summit (which is open to attendees from other institutions) and its participation in the Association for Patient Experience (AfPE), which it founded.

There are many smaller staffing steps hospitals can take to create the culture to improve patient experience. At CHOC, the focus on improving patient satisfaction is influencing hiring practices. “First we want to hire for attitude, then aptitude,” says Gerlach. “We want to hire people who will really own the patient experience.”

Many hospitals are changing their training in response to the growing importance of patient satisfaction. Training can improve staff communication, and there is a correlation between communication and patient satisfaction. A study of communication training effectiveness found simple things like knocking on a patient’s door before entering and saying “please” and “thank you” can improve patient satisfaction. At the conclusion of a training program, staff members at Long Island Jewish Medical Center sign a commitment-to-care certificate to affirm their commitment to patient-centered care.

Innovations on the Horizon
The retail influence on health care could result in retail-style loyalty programs for hospitals. Walgreens and UnitedHealthcare launched a loyalty program that gives participants rewards points for completing healthy activities. Perhaps there is a lesson to be learned from the U.K. health system: When Princess Charlotte was born in April, parents Prince William and Princess Kate received 10 percent off their hospital bill because St. Mary’s Hospital provides a loyalty discount for couples who have a second child at the hospital. U.S. patients may soon expect royal treatment as the consumer influence continues to cause hospitals to change their models and focus on satisfaction.



i Convenient Care Association fact sheet “Convenient Care Clinics: Increasing Access” accessed June 8, 2015 at

ii PwC Health Research Institute “Healthcare’s new entrants: Who will be the industry’s” April 2014.

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