Special report Healthcare Customer-Centric Healthcare: Best Practices for CEOs and CMOs Leaders must rethink their delivery models to ensure a high level of customer service, while optimizing costs.
For decades, the process of seeing a doctor has remained largely the same, and this status quo has typically caused a great deal of frustration for patients. Consider how the situation generally plays out: the patient must first make an appointment, sign and fill out multiple forms, go to a preferred provider, fill out more forms and sit around until the doctor is ready to see them. They don t always have a say in which doctor will examine them and often feel they have little control of how they are handled throughout the process. When the bill finally comes, there is a third party that pays some of it, while they are expected to pay the rest, even though they may have already made a co-pay. All in all, the result is a frustrating and confusing process in which the patient is often left in the dark about many things; not necessarily the ideal position someone wants to be in when it comes to their health. Fortunately, more and more CEOs and CMOs from across the healthcare industry recognize the need for change and are actively implementing the processes and strategies to improve the patient experience. Time for a new approach to the healthcare customer Consumer-driven models for care are becoming more widely adopted as patients demand better customer service and more healthcare organizations recognize the value in meeting these changing expectations. According to a study by the National Research Corporation, customer-centric healthcare cannot be uncoupled from the important issues of today, such as managing population health, promoting prevention and wellness, and improving quality of care while reducing costs; ultimately, it is the customer who will determine the success or failure of these strategic issues in the future. 1 The idea of creating a more customer-focused approach to healthcare is not necessarily new to the industry. About 20 years ago, a method was introduced by the Studer Group, a healthcare consulting company that emphasized putting the patient first. The result was a hyper patient-centric model designed to improve clinical quality, patient perception of care, and profitability. Although certainly ahead of its time, the method failed to catch on. Nearly 90 percent of healthcare systems using the Studer model went bankrupt at the time; the high-touch service was too costly and unsustainable. However, as patient demands continue to shift, the Studer model is regaining popularity as more healthcare organizations strive to deliver a more patient-friendly approach. As a customer-centric model starts to become the norm, rather than the exception, many healthcare providers don t always know the best path forward, or understand how to make the needed changes to transform their customer service and quality of care to meet the patient expectations of today. A recent PricewaterhouseCoopers study revealed the extent of this drive to enhance patient care. Overall, the survey found that the vast majority (89 percent) of healthcare CEOs plan to improve their ability to innovate. An even greater number plan to change their technology investments (93 percent), and a total of 95 percent are exploring better ways to use and manage the data available to them. Still, the study found that very few have made headway in these areas. 2 So, what is the best approach for creating that customercentric model of healthcare? While such change won t happen overnight, organizations that want to make the transformation must take a top-down approach, which begins with ensuring the CEO and chief medical officer (CMO) are fully committed to putting the customer first. Healthcare visit us online at www.tatum-us.com
Meeting patient needs with new operating models Given the greater choices patients have in healthcare today, the medical organizations that fail to provide a worthwhile experience will find themselves struggling to compete. The rapidly changing healthcare landscape, impacted significantly by the ongoing implementation of the Affordable Care Act (ACA), has given individuals more choice than ever in the care they receive. The healthcare industry is now more similar to other consumer experiences, and patient behavior has evolved to match; if patients receive bad customer service at a healthcare facility, they can simply choose not to return. This new age of transparency is heightened by the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey, the first national, standardized publicly-reported survey of patient perspectives of hospital care. 3 This 32-question survey is designed to capture a patient s experience, ranging from their interaction with doctors and nurses, responsiveness of nursing staff, communications, cleanliness of facilities and much more. The result is a comprehensive gauge of the level of service they experience as customers. As the HCAHPS survey provides a high level of transparency, with the patients themselves forming the basis of its insights, more and more companies understand that the value of participating in the program and learning what they can do to continually improve their service and reputation. Ultimately, it is up to the CEO and CMO to ensure physicians remain profitable by seeing a predetermined number of patients per day. This process typically involves scheduling patients in halfhour durations, during which they check in, wait in the exam room, meet with a nurse who takes their vital signs, wait again for the physician who spends five to seven minutes with them, and finally they get dressed and leave. Overall, the patient will spend about 20 minutes waiting, and only a few minutes with the physician, resulting in a less than positive experience. As more healthcare providers strive to create a more positive impression on patients, it is important that change starts at the top with the CMO and CEO. The CEO and CMO must implement the strategies that minimize wait time and maximize the customer experience, all while optimizing the costs of running the operation. This entails reimagining the operation to be more like a concierge service: making appointments at literal points in time to minimize waiting, enabling patients to enter information only once, treating patients courteously and as valued customers, and providing flexibility in scheduling appointments. It is also important to drive other customer-centric initiatives, such as extended hours, offering home visits to provide more flexibility, and providing tele-health programs, whereby patients can have a remote video-based conversation with a physician rather than going into the office. Such changes won t happen overnight, requiring strong leadership at the top to set the tone and ensure the right resources are in place to drive such initiatives. This requires the CEO to take the lead and work with the CMO to see what can be changed, the CIO to identify the technologies needed, the chief security officer to prevent breaches and the nurses, to ensure optimal bedside manner. These steps are essential to delivering a more customer-centric approach that addresses changing customer demands and provides an effective customer experience. As such models will be the norm in the next 10 years, the organizations that start the transformation today will have a significant competitive advantage. 1 National Research Corporation, Customer-Centric Healthcare, July, 3, 2013. (http://www.nationalresearch.com/blog/15/#sthash.cpva4pjz.dpuf) 2 PricewaterhouseCoopers, Fit for the Future: 17th Annual Global CEO Survey, February 2014. (http://www.pwc.com/gx/en/ceo-survey/2014/assets/pwc-17th-annual-global-ceo-survey-healthcare-key-findings.pdf) 3 Centers for Medicare & Medicaid Services, Hospital CAHPS (HCAHPS), April 28, 2014. (http://cms.gov/research-statistics-data-and-systems/research/cahps/hcahps1.html)
5 Must-do s for healthcare CEOs and CMOs Meet patients where they are: Healthcare consumers will increasingly expect the same level of service they receive in other areas of life and business. Healthcare leaders must spearhead the process changes that meet this demand, such as greater flexibility, extended hours, home visits, and tele-health programs. Minimize wait times, maximize service: Leadership must also drive the improvements that enable healthcare to be more like a concierge service; this entails making appointments at literal points in time, enabling patients to enter information once, and treating patients courteously and as valued customers. Set the tone for employees: To make such large-scale changes, healthcare CEOs and CMOs must work with other C-suite executives to identify what needs to be transformed, why those changes are needed, the tools that will facilitate the transition, and how each employee can contribute to delivering customer-centric care. Revamp cost structures: CEOs and CMOs must meet two key patient objectives to keep them healthy and provide service at reasonable costs. For many organizations, this means designing a fundamentally different operating model and driving down costs for activities that do not produce value and enhanced quality for their target patient population. Seek outside help when needed: Healthcare leaders might not have all the senior-level capability necessary to lead their organizations through such a large transformation. Leverage the help of an executive talent provider to ensure the organization has the support and expertise to deliver a more customer-centric experience. Cost optimization is essential for future success As the patient care model continues to shift, healthcare providers must change their cost structures as well. Up until recently, hospitals often determined the cost of service behind closed doors, put a margin on it, went to the state or federal government to report those costs, and expected to be reimbursed accordingly. In addition, diagnostic-related groups, using data from across the nation, would determine what a procedure should cost. Because there was an intermediary paying for it, the actual quality of service provided had no bearing on cost, especially since there was no standard approach for measuring quality of patient care. With the advent of new technology, it is now easier than ever to collect clinical informatics, set up national registries, and determine quality indicators and measure analytics for quality all factors that impact the cost side of the equation. The issue for many providers today is that the cost structure needs to come down considerably, with pricing determined by performance and the quality of service provided, rather than being contractually guaranteed. Factoring customer engagement and satisfaction into the cost structure will help drive the shift toward a more customer-centric model. Once such example is the accountable care organization (ACO) model, whereby healthcare organizations join together and deliver a payment and care delivery approach that ties provider reimbursements to quality metrics, while driving reductions in the cost of care for an assigned patient population. In such instances, payment is linked to quality improvements that also reduce costs for patients. According to the U.S. Centers for Medicare & Medicaid Services, the ACO model has led to a savings of $417 million since the program began in 2012. 4 As the ACO model continues to evolve, healthcare providers find themselves managing a particular population, whom they see regularly and help to keep healthy. When patients are part of a healthcare organization and receive such regular care, fewer patients will need emergency room service (and the higher prices for such service), thereby reducing operating and infrastructure costs. But achieving an ideal state also entails understanding what kinds of patients the organization has, ensuring the right types of employees are in place to meet those needs, and that the organization has the appropriate technology. When all of these pieces of the puzzle come together, the organization can deliver the high level of service today s patients demand. Healthcare visit us online at www.tatum-us.com
Achieving success in a new age of healthcare Rather than solely cutting costs, CEOs and CMOs must focus on how to make their organizations the best place for customer care. Much like consumers make their buying decisions based on how they connect with a particular company or brand, the same holds true for the healthcare industry. If a patient goes to one healthcare provider and is forced to sit for an hour, and later on goes to another facility and receives treatment within two minutes, while receiving comparable care, their choice in providers is obvious. Many of today s healthcare organization CEOs and CMOs are challenged to deliver on this customercentric model, having lived through the rise and fall of the Studer Group a generation earlier. But as the ACA has given more people access to healthcare, and more choices in how they get that care, leaders must rethink their processes to ensure a high level of customer service while optimizing costs. At the same time, healthcare organizations are in an age of transition. The changing external environment and the increase in empowered customers, more competitors, mergers and acquisitions, new service delivery models, and more have put greater pressures on healthcare leaders to communicate a transformative vision throughout their organizations. To convey this new vision to their staffs, CEOs and CMOs must show what the future operating model is going to be and how they can get there. Though the journey may be difficult, having the best tools, technology and team is essential to a successful and rewarding transformation. With qualified leadership at the top to guide these changes, the right technology that can facilitate the transformation, and the best team to carry out these initiatives, healthcare organizations can work toward making healthcare more customer friendly and meet the needs of today s empowered patients. 4 Centers for Medicare & Medicaid Services, ACOs Moving Ahead, December 22, 2015. (http://blog.cms.gov/2014/12/22/acos-moving-ahead/) How the right partner can help deliver a customer-centric focus The Affordable Care Act (ACA) has introduced some significant changes to the healthcare industry; and as today s patients have more choice in the care they receive, healthcare organizations must deliver a more patientfriendly approach. So, what can organizations do to contend with this transformation and meet patient expectations for quality service without breaking the bank? Some companies will stumble in initiating such large-scale changes due to a lack of proper leadership in place to guide this transition. As a result, healthcare organizations may need to look externally for the expert CEOs and CMOs who can lead them through these changes. Not only should the right leaders help them to comply with the mandates of the ACA, but also drive the internal strategies and process changes that enable them to deliver a customer-centric approach. Healthcare organizations can benefit from working with an executive talent provider that can deliver both the interim leadership and guidance to transform their organizations. The right partner will help the organization implement the strategies to achieve competitive differentiation, position for accountable care, deliver profitable growth, and gain access to the capital and human resources needed to be successful. By working with a proven provider of qualified healthcare leaders, the organization can ensure the resources are in place to drive operational improvement, manage the revenue cycle, navigate technology systems, and, most importantly, deliver the customercentric approach their patients will increasingly demand. About Tatum, a Randstad company Tatum is a leading professional and interim services firm offering hands-on strategic, financial and technology solutions that measurably improve business performance. Tatum s executive leaders and consultants help companies navigate critical points in the business lifecycle and execute their strategic initiatives. Our deep management and operational expertise, keen strategic consultancy and a focus on follow-through enable our teams to deliver solutions that drive sustainable impact. With a national footprint of offices in key markets, our firm is ready to mobilize locally anywhere in the country. Tatum is an operating company of Randstad US. To learn more about Tatum, visit www.tatum-us.com.