Ask any hospital administrator, and most would say that patient experience is their top priority and the driver of everything their hospital does.
But when it comes to financial performance, the connection between patient experience and the bottom line can often prove to be vaguely understood at best.
However, with more data being available to hospitals, the relationship between patient experience and hospital revenue is becoming clearer. One study found that a five-point increase in overall hospital rating (based on HCAHPS survey data) leads to, on average, a 1% increase in profit margin.
That’s huge. But how exactly does that work? Here are two ways improving the patient experience can financially benefit your hospital.
1. Patient Loyalty and Word-of-Mouth
Many of the people walking into your hospital, especially during COVID-19, are going through one of the most stressful situations of their lives. Every little thing you can do to provide a great experience can have a significant impact both emotionally and physically.
Going above and beyond to care for a patient is the right thing to do — it’s what every hospital should do. It also makes a lot of sense from a business perspective because it creates patient loyalty.
Loyal patients will not only come back to you if they have another medical issue come up, but they’ll also take it a step further and share their experience with their friends and family (or even on their social media).
That’s what human nature does. When someone has an incredible experience, they want to share it with someone else.
If your hospital goes above and beyond for every patient, you’re tapping into that fundamental part of human nature that will organically motivate them to share with others.
It’s important to note that this impulse for sharing positive experiences also exists for negative ones.
Whatever potential there is for experience-driven, word-of-mouth growth, there may be even more potential for word-of-mouth damage from a negative experience.
That’s especially true in healthcare when the stakes are high. Bad customer service at a restaurant is one thing, but poor care at a hospital can have dire consequences — both for the patient and your reputation.
2. Employee Satisfaction and Retention
Patient loyalty and word-of-mouth are powerful ways your hospital can generate revenue. But can improving the patient experience also reduce costs? After all, doesn’t an initiative like that require more financial investment?
It’s true that in order to provide a better patient experience, you need to invest in improving systems that directly impact it.
However, there can be long-term, cost-reducing effects when you make those investments. Particularly in the area of employee engagement and turnover.
Engaged employees usually don’t leave their jobs. And if you can reduce turnover at every level and in every department of your hospital, you can save a lot of money. You’ll spend less time recruiting and interviewing, and you’ll run fewer background checks and drug screens.
So how do you get employees engaged?
It may at first seem like you have to answer that question before you can make headway in improving the patient experience. After all, it only makes sense that a more engaged employee will provide a higher level of care.
But this can also work in reverse. By initiating programs that enhance the patient experience, you can evoke a sense of meaning in your staff. When employees find a sense of meaning in their jobs, they “work harder and quit less.”
At one hospital, an initiative to increase patient satisfaction led to a 4.7 percent reduction in employee turnover.
Think about what will happen if employees find meaning in providing an exceptional experience to every patient that comes through your hospital.
If clinicians, housekeepers, culinary staff, and maintenance workers are all engaged in an effort to provide better care, you’ll see a positive shift in your work culture, and you’ll reduce turnover. That leads to better patient satisfaction scores and lower turnover-related costs.
An Opportunity for Future Growth
The patient experience and the bottom line are inextricably linked. This holds true even while dealing with the daily onslaught of a pandemic. Budgets are tight and patients need the highest level of care possible.
By doing the hard work of providing an exceptional patient experience, you’ll build a foundation of patient loyalty and employee engagement that will help generate hospital revenue and reduce turnover.