About 75% of consumers are very satisfied with their doctors and nurses, but only about 50% with their health plans, and only 66% are happy with the overall experience.

Prepare for the Commoditization of Health Care

As health reform and state exchanges open up a retail market for more than 23 million individual shoppers by 2018, healthcare organizations face a crucial “moment of truth” and have to work harder for consumer engagement and loyalty, according to a report released today by the Health Research Institute (HRI) of PwC US titled Customer experience in healthcare: The moment of truth.

But what makes a positive customer experience in healthcare? Consumer perceptions are built across multiple channels — in person, online, on the phone and newly emerging channels such as mobile devices and retail health clinics.  And the “commoditization” of health care now means that ideal experience will increasingly be defined by non-clinical elements, including convenience, customer service and staff attitude.

Study: The Customer Experience is Make or Break

In Customer experience in healthcare: The moment of truth the first in a series of HRI reports on healthcare consumerism and related business implications for organizations in the post-reform health market,  HRI compared the experiences and attitudes of consumers in the bankinghotelairline and retail sectors to those of consumers in the healthcare industry.

The Findings:  While a good or bad customer experience can make or break a bank or hotel,

  • healthcare consumers are nearly 2x as likely as airline, hotel, and banking customers to say that staff friendliness and attitude dictate whether the experience was positive or negative.
  • As many as one third of consumers said they would be willing to switch their health insurance or healthcare provider if another company offered a more “ideal experience.

Kelly Barnes, U.S. Health Industries leader, PwC says:

The voice of the customer may be the best kept secret in healthcare, but that’s changing as consumers exert greater control over how their healthcare dollars are spent and exercise power to vote with their feet and wallets.  Hospitals and insurers are competing for loyal customers served by new care and coverage models in a more retail-oriented health market.

The study draws on findings from PwC’s Customer Experience Radar, a unique nationwide survey of roughly 6,000 consumers across nearly a dozen industries.

Health Care Lags Other Service Industries

While consumer expectations in healthcare track those of consumers in other industries, healthcare payers and providers are significantly behind other industries in responding to the wants, needs and preferences of consumers.

HRI found that healthcare consumers also present several important challenges that make them more demanding of better service. Healthcare consumers:

  • Are least likely to share a positive story – only 44% of healthcare consumers and 54% of provider consumers tell anyone within a month of having a positive experience compared to 70% of retail and 66% of banking customers.
  • Are less forgiving of providers with whom they have had a negative experience. 6 out of 10 negative experiences are more likely to be remembered for longer compared to other industries – however, 88% would be willing to return to a retailer who apologized after a bad experience, and 66% of disappointed health insurance consumers are willing to forgive and forget if their frustrations were acknowledged.

Research by Bruce Temkin corroborates these findings.

African Americans are much more loyal to their health plans than Hispanics or Caucasians. How does this change your engagement strategy?

What Matters to Healthcare Consumers

  • Staff attitude was cited as the main contributor to positive moments of truth by 70% of consumers in the provider sector, compared to 38% of retail shoppers and 33% of bank, hospital and airline customers.
  • Personal experience is the top reason for choosing a doctor or hospital  – more than two and a half times more important than to consumers in other industries. By contrast, price and convenience ranked higher on a list of attributes consumers expect across other industries, with price being the #1 driver of purchasing decisions for consumers in every industry but the healthcare provider industry.
  • Conveniences and services rank high:
    • 69% want facilities that offer multiple services in one location;
    • 65% appreciate the ability to exchange information through online and mobile channels of communication;
    • 57% place a high value on patient education they receive during a visit; and
    • 53% percent place a high degree of value on the cafeteria and access to WiFi and other entertainment.
  • Choice of physicians and quick claims payment topped consumers’ list for health insurer services:
    • 87% value choice of providers;
    • 60% seek claims processing within two weeks of service;
    • 49% want information provided to them in both paper and online formats; and
    • 43% value website content that provides information about providers and plan information.

Important Lessons

  • Customer Feedback Forums: One key takeaway HRI outlines is for health organizations to open up forums for customer feedback so they can proactively monitor and manage customer experiences. Paul D’Alessandro, Health Industries Advisory principal and U.S. customer impact leader, PwC writes:

Lessons from other industries have slowly made their way into the health industry, but most healthcare companies — whether payer or provider — still have a ways to go before they can match the transparency, convenience, and overall quality of experience individual consumers often demand in other sectors.

  • Customer experience metrics have been gaining traction in healthcare and are expected to become more important as incentive payments to health organizations become linked to patient satisfaction scores.

Metrics will become vital since, starting in October,2012, Medicare will reduce base payments for each hospital discharge by 1% as part of its Hospital Value-Based Purchasing program, which uses consumer assessment scores, known as HCAHPS, as a key component to calculate value-based incentive payments.  Patient satisfaction scores will determine 30% of the incentive payments, while improved clinical outcomes will determine the remaining 70%

A full copy of the HRI report can be downloaded at: www.pwc.com/us/HealthcareCustomerExperience