Patient Experience and Financial Performance: What's the Link?

For those who are in the healthcare industry for the right reasons, their goal at the end of the day is to provide excellent care for the patients. After all, this is the whole purpose of the hospital/clinic, to help patients get healthy and live better lives. When looking at direct costs from a management perspective, sacrifices towards patient experience often have to be made in order to keep the institution healthy financially. However, in a lot of these decisions, only the direct costs of these sacrifices are being taken into account. Studies have actually shown that higher patient experience contributes to a higher financial outcome. Here we will look at how the patient experience indirectly impacts financial performance.

To understand how an organizations revenue is positively impacted by patient experience you must first start from the beginning, the patient experience. By working to increase the patient experience you are going to give the patient incentive to get more involved in their own care. This happens as a result of the patient feeling more trusting of the providers they are working with. Then this is where you will start to see the increase in better outcomes. There have been numerous studies showing patients who are more engaged in their care have better outcomes. This can be from almost anything with examples including decrease in medication errors and a reduction in falls.

The outcomes are going to enhance the organizations revenue in two different ways. The first of which is simply by reducing costs. In most cases providers are paid based on the outcome of the patient or the procedure being performed. This doesn't take into account any extra costs such as those resulted from previously mentioned medication errors and falls. These costs have to be absorbed into the hospital/provider. The other way revenue is effected is directly a result of how the provider gets paid. Like mentioned, they are paid on outcome that involves the quality of the patient's care. The more the patient's outcomes suffer the less the provider will be reimbursed for services.

Last but not least, the financial performance is going to be effected by patient experience due to its impact on the organizations reputation. Patients choose where to go it's based on how good a brand's (hospital's) reputation is. The brand is primarily impacted by word of mouth of patients throughout the community. So it goes without saying, by improving your patient experience you improve your reputation. This then brings in more patients which eventually turns into higher revenue.

References

“How to Improve Patient Satisfaction & Why It Matters.” PeerWell’s PreHab and ReHab Blog: All Things Joint Replacement Surgery, 17 Mar. 2017, https://www.peerwell.co/blog/2017/03/17/why-patient-satisfaction-matters/.

“The Impact of Improved Patient Experiences.” NRC Health, 12 May 2017, https://nrchealth.com/impact-improved-patient-experiences/.