How Does Patient Loyalty Drive Revenue?
Loyal customers are invaluable in any industry. They don’t need to be repeatedly targeted with major advertising campaigns, and they only need to be onboarded once. If they’re truly pleased with a product or service, they may even become enthusiastic promoters of the brand. Moreover, I learned during my previous career at Procter & Gamble that it takes five to seven times as much spending and effort to bring back a lost customer than to acquire a new customer.
This logic holds up in healthcare. The average lifetime value of an individual healthcare consumer is roughly $1.4 million or $4.2 million per family. The longer a patient stays with a provider, the more an organization is likely to make.
But patient loyalty isn’t just a boon for providers. It’s better for the patient, too. Loyalty improves continuity of care which, in turn, leads to better health outcomes, higher satisfaction rates and more cost-effective treatment.
There are many ways to measure revenue. Hospitals, for example, utilize the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey. Hospitals may lose or gain 2% of their Medicare reimbursements based on these scores.
Commercial, Medicaid and Medicare payers, on the other hand, use quality performance metrics like CMS Star ratings and the Healthcare Effectiveness Data and Information Set (HEDIS). These scores help payers better market their health plans and appeal to beneficiaries.
There is a positive correlation between HCAHPS, STAR and HEDIS scores and earnings: higher scores equal higher revenue. Hence, many healthcare providers are now looking to these scores as a way to drive profit as well as increase patient loyalty and improve the quality of care.
Increasing your scores, though, can be a daunting task. Each of these metrics comprises a variety of variables, from being treated with courtesy and respect to wait time. It may seem like you need to improve all of these factors at the same time to see a change in your scores.
If this approach seems unreasonable to you, that’s because it is. Instead, narrow your focus and improve the right variables first.
Improving Scores With Psychographic Segmentation
PatientBond’s psychographic segmentation model divides healthcare consumers into groups based on their lifestyle, personality, values and attitudes. Using these data, PatientBond can identify a patient’s preferred method of communication, how they prioritize hospital or health insurance company characteristics or services and more. Our psychographic data can also help you determine how to approach HCAHPS and HEDIS scores most effectively.
In the fall of 2018, PatientBond completed the Consumer Diagnostic, a nationally-representative study on healthcare consumers in the U.S. Among many other questions and topics, we explored what HCAHPS and HEDIS variables were most important to people in each segment.
For example, one of the questions on the HCAHPS questionnaire asks if the patient feels as though their doctors listened carefully to them during their hospital stay. The PatientBond study examined the importance of this attribute among healthcare consumers, and it is “Extremely” or “Very Important” for all psychographic segments except Willful Endurers, who don’t feel the need to focus on their health and prefer to live in the moment. If you have very few patients who are Willful Endurers, then your hospital should focus on making sure patients feel heard to increase your overall scores. However, Willful Endurers are the largest segment in the U.S. at 31 percent of the general population; thus, it is important to understand what does drive loyalty among this segment.
In the same study, PatientBond also asked questions about HEDIS variables. One question looked at how easy consumer felt necessary forms were easy to complete. Self Achievers, who are driven to achieve health goals, are statistically more likely than all other segments to answer “Always” or “Usually.” However, Willful Endurers mark “Sometimes” or “Never” more than Self Achievers, Balance Seekers and Direction Takers. If psychographic data reveal that many of your beneficiaries are Willful Endurers, then you should consider improving the form completion process.
You don’t have to improve every aspect of care all at once. Start with the variables that matter most to your patients and then, once you’ve addressed those areas, you can move onto others. By narrowing your focus, you’ll not only improve your HCAHPS or HEDIS scores but also increase your patients’ lifetime value to your organization.
For more on the psychographic segmentation model and how it improves patient loyalty, download our case study.