Give the people what they want: delivering on the consumer call for value
By David Betts, Principal, Deloitte Consulting LLP
Five years ago we wrote The patient experience: strategies and approaches for providers to achieve and maintain competitive advantage. Our thesis then was that by creating a differentiated patient experience, health care providers would be better prepared to compete in their marketplace. We hypothesized that attracting and retaining customers would be critical as health care delivery becomes more competitive and that borrowing from lessons learned by innovative consumer-oriented businesses like Disney, American Express, Amazon.com, and the Ritz-Carlton, health care providers could jumpstart their journey to creating differentiation based on the customer experience.
So what’s changed since that original thesis? Simply put: a lot … and very little. The recent publication “The quest for value in health care: A place for consumers” from the Deloitte Center for Health Solutions explores how consumers continue to become more empowered against a backdrop of increasing environmental pressures within the health care industry.
What’s the impetus for change? In an exponentially more social and mobile world, the seemingly constant news flow regarding health care and its impact on the consumer and the economy has raised already high expectations regarding the experiences that patients have. These expectations, however, continue to outpace the health care industry’s ability to deliver against them while also striving to provide safe, high-quality care in a business environment that is increasingly margin-constrained. The Deloitte Center for Health Solutions’ surveys1 of health care consumers reveal that consumers do not believe the U.S. health care system is providing value today nor is it meeting their needs.
In addition, the “democratization” of health insurance through the advent of health insurance exchanges offers more choice to consumers, but is also driving the formation of narrow networks in many markets, and forcing providers to compete on a whole new playing field. Consumers are gaining better access to quality ratings of hospitals and health plans to comparison shop for products and doctors, but their satisfaction scores are also impacting the reimbursement for health care providers. Under the Affordable Care Act, patients’ perception of their health care experience as measured by the HCAHPS2 tool has a direct impact on provider reimbursement. Control of health care choice continues to shift even more directly to the consumer and away from physicians making delivering an attractive, differentiated customer experience even more important today than it was five years ago.
What hasn’t changed in the past five years? Despite increasingly complex needs with respect to the level of emphasis on “high tech” versus “high touch,” and an acceleration of the speed with which consumers desire to transact business in this hyper-connected world, the core attributes of what consumers want remain the same. Consumers, regardless of the industry, want an experience that is:3
- Highly personal
- Dependable, predictable, and consistent
- Logical and easy
It is these attributes that make for good consumer experiences. Take Amazon.com for example, users know exactly what to expect once logged into the website:
- The home page presents recommendations specifically tailored to the user’s preferences as determined by their buying history,
- Users pay with one click,
- The merchandise is selected, boxed, wrapped, and shipped in a matter of hours if not minutes,
- An email is sent with tracking information and an expected delivery date, and
- Orders are delivered to the customer.
The whole experience is personal, secure, highly dependable, and consistent. It is easy, and the process is completely transparent. Health care consumer expectations are being elevated because other industries have been able to deliver this type of experience.
Previous research has found a correlation between customer experience and three elements of loyal behavior: willingness to buy more, reluctance to switch, and likelihood to recommend.4 Companies who excel at customer experience have an advantage of 9%-11% over customer experience laggards when it comes to these three dimensions.5 And, happy customers tell four to five others about their positive experience, while dissatisfied customers tell 9 to 12 others how bad it really was.6
Consumers’ perception of value shapes their decision-making in health care (as in other industries). In the near future, industry stakeholders will no longer be able to avoid consumers’ desire to make decisions based on the value they perceive they are getting from health care. As stated in The Quest for Value in Health Care: A Place for Consumers, “Stakeholders take note – do not leave the consumer out of the equation.”
Check back next week as we discuss how the health care industry can cultivate a culture focused on the consumer experience.
1Conducted annually since 2008, the Deloitte Center for Health Solutions surveys a nationally representative sample of more than 4,000 adults per year about their interest in and ability to operate in a consumer health care market. http://www.deloitte.com/view/en_US/us/Industries/health-care-providers/deloitte-survey-of-health-care-consumers%20/index.htm 2HCAPHS (Hospital Consumer Assessment of Healthcare Providers and Systems) is a standardized survey for measuring patients' perspectives on hospital care, collected by CMS. Available from: http://www.hcahpsonline.org/home.aspx 3Deloitte. The Patient Experience: Strategies and Approaches for Providers to Achieve and Maintain a Competitive Advantage, December 2009. Available from: https://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_lshc_ThePatientExperience_072809.pdf 4Temkin, BD.. The State of Customer Experience, 2010. Forrester Research. February 19, 2010. 5Ibid. 6Stevens, M. Extreme Management: What They Teach at Harvard Business School's Advanced Management Program. March 1, 2002.
David Betts is a principal in the revenue cycle practice within life sciences and health care in strategy & operations. David focuses on helping our healthcare provider clients attain Sustainable Margin improvement through revenue cycle redesign, operating model transformation, mergers and acquisitions, and the implementation of growth initiatives.