Effective patient engagement leads hospitals to higher margins & healthy future





Recent Accenture research suggests that hospitals that offer a superior patient experience tend to have 50 percent higher margins than their peers . Hospitals that deliver a superior experience have the opportunity to create happy and healthy patients, as well as a healthy financial future.

A superior customer experience doesn’t just strengthen patient engagement it also correlates to 50 percent higher hospital margins.

Cost cutting has long been the strategy hospital systems have first turned to for improving margins. Patient experience, on the other hand, is often viewed as a cost driver, with limited to no measurable financial upside. However, today’s patients shop for healthcare services and, like all consumers, they want and will seek out the best possible overall experience when receiving care.

To examine the relationship between patient experience and hospital financial performance, Accenture analyzed hospital income margin data reported to the Centers for Medicare and Medicaid Services (CMS) and survey results from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS). Although HCAHPS is just one of many evaluative tools measuring patient experience, its widespread U.S. adoption makes it a good proxy for health consumer experience

The correlation between the health consumer experience and higher margins is nationwide and exists across all hospital types (Figure 2).

The margin increase at urban hospitals is roughly eight times that of rural hospitals, suggesting that urban hospitals with a superior consumer experience achieve nearly double the margins of an average-experience hospital. This difference in correlation could be attributed to many factors e.g., patients have greater choice in non-rural areas, and select the hospital that offers the best experience; or profitable hospitals, often located in non-rural areas, have the financial means to invest in improving the patient experience.

Prioritizing patient experience

These findings suggest that hospitals could achieve financial success through patient-centric enhancements rather than cost-cutting. For example, Accenture analysis shows that a hospital system earning $2B in revenue would have to cut 460 jobs (assuming a loaded salary of $100K) to achieve the same 2.3 percent margin benefit that improving the consumer experience might bring through revenue growth. The data suggest that leading hospitals are indeed growing profitability by increasing consumer satisfaction, not cost cutting: Among the top 20 percent of patient experience performers, both revenues and costs are growing at an above-average rate, with revenue growth outpacing the growth in operating expenses (Figure 3).

Finally, this correlation is historical and growing in importance over time. Accenture analysis shows that margin increase correlated to a 10 percent improvement in consumer experience scores grew from 1.04 percent in 2008 to 1.72 percent in 2013 – this represents a 70 percent increase. As health consumers increasingly factor experience into their care selection decisions, the financial benefit associated with patient experience can only be expected to increase.

Better healthcare CRM, better margins

Hospitals that are the fastest to adopt patient experience and digital health best-practices (Figure 4) will be best positioned to improve their reputations, reap the financial rewards and outperform their peer

Authors:
Matthew Collier
Leslie Meyer Basham

Key Contributors:
Elisabeth Lim
Andrew Scott
Victor Wong
Michael Brombach

About Accenture Insight Driven Health

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