iLoveBenefits: Industry News Blog

Superior Customer Experience Correlates to 50% Higher Hospital Margins

Superior Customer Experience Correlates to 50% Higher Hospital Margins

Accenture recently published an analysis on customer satisfaction from the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS). Here are some key findings from the report:

  • Hospitals that deliver “superior” customer experience have 50% higher net margins than average hospitals.
  • The margin increase at urban hospitals is roughly eight times that of rural hospitals.
  • Academic hospitals had a 2.1% margin increase per 10% increase in HCAHPS score in 2013.
  • Margin increase correlated to a 10% consumer experience improvement grew 70% from 2008-2013.
  • Among the top 20% of patient experience performers, revenues grew 10.9% and costs grew 7.8% in 2013.
  • For profit hospitals had a 3.3% margin increase per 10% increase in HCAHPS score in 2013.

Source: Accenture, May 11, 2016

The health care business model is changing

According to a recent report, 18% of physicians have changed their business models to provide certain services. Within that group, those services include the following:

  • Virtual technology: 51%
  • One-stop shopping: 41%
  • Behaviorial health services: 24%
  • Pharmacist services: 19%
  • House calls: 17%
  • Group visits: 9%
  • Other: 11%

Source: “Kaiser Health Tracking Poll: February 2016,” The Henry J. Kaiser Family Foundation, February 25, 2016,

A new medical education model is required to deal with the projected physician shortage

Medical education model may reduce physician shortage
The Teaching Health Center Graduate Medical Education Program has provided valuable training for electronic health record utilization, team-based care and quality improvement, researchers report in Academic Medicine. The program provides up to $230 million over five years to train more medical residents in community-based centers to help curb physician shortages in underserved communities. American Medical News (free content) (1/21)

Health care information and education is moving online

A recent survey found that 90% of Americans prefer online access to health information and education. Meaningful use of health IT is a central principle of health care reform efforts. The number of online job postings looking for candidates with health IT training has gone up 88% over the past two years.

Sources: iHealthBeat survey, June 2012; Kate Ackerman, “Health IT Key to Health Care System Reform,” June 29, 2011, iHealthBeat. Wanted Analytics Report, September 19, 2012; Abbi Lombardi, “Healthcare Talent Goes Digital,” October 1, 2011, Wanted Analytics. 

More providers seek outside help for revenue cycle management

More providers seek outside help for revenue cycle management

A KLAS report finds that more health care groups are enlisting the help
of third-party companies to assist with revenue cycle management. This trend is
driven in part by efforts to comply with federal meaningful use mandates,
reduce costs and prepare for the ICD-10 transition, the report notes. (12/10)

While people turn to the web for their health information and decision making. . .

Is the web a high trust, high integrity source of health information and decision making? What can we do to develop the trust and integrity of the information?

Survey shows how patients use Web for health care
A Manhattan Research survey revealed 54% of respondents turn to the Internet to determine the services they may need and the right health care personnel to provide them. Data also showed 79% of patients diagnosed with chronic disease in the past three months went online for their health care decisions, compared with 53% of patients diagnosed a year earlier. However, only 20% of Internet-savvy patients use the Web to choose a primary care physician, researchers said. American Medical News (free content) (11/5)

Health care as a business operation requires business skills

In a recent survey, healthcare executives identified the biggest opportunity for cost savings at their organization as:

  • Improving clinical operations and care delivery performance (71%)
  • Workforce optimization (21%)
  • Supply chain and non-labor cost containment (8%)

Source: “Poll Reveals C-Suite Focus on Clinical Operations,” Huron Healthcare, 2012,

Do you have the healthcare business acumen to adapt to changing business models

40% of healthcare systems viewed their current business model as somewhat sustainable for the next 5 years, versus 53% of health plans and 43% of pharma companies, according to a recent survey.

Source: “KPMG Survey Reveals Major Disconnect Among Healthcare System, Health Plan And Pharma Execs On New Payment Systems,’ KPMG Press Release, August 28, 2012,

There is a reason why hospitals are ill prepared to take on financial risk . . .

Perhaps if hospitals actually understood their real cost of production. Perhaps if health care providers truly understood their cost structures. Maybe then they might be able to reconstruct their business models and take on a higher quality lower cost model where they could actually manage risk they understood.

Survey: Hospitals ill-prepared for financial risk

Few hospitals interested in becoming ACOs are ready to take on financial risk, according to a Commonwealth Fund survey of nearly 1,700 hospitals. ACOs are pursuing models that let them share in any savings they achieve, without losing money if they fail to cut costs. This is likely to continue: Only one in five indicated they were using data to predict which patients are most likely to be in poor health and need more services–a significant gap in their ability to manage risk, lead author Anne-Marie Audet tells Kaiser Health News. (Kaiser Health NewsCommonwealth Fund issue brief)

Mergers and Acquisitions in Healthcare are a Big Deal

Mergers and acquisitions generally occur because organizations want to become bigger or they want to acquire capabilities that will make them more effective, but no matter what the reasons for the transactions, they aren’t simple.

“Consolidating a healthcare organization is a big deal. There’s a lot of change that has to be thought through regarding impact on people’s lives,” explained Doug Fenstermaker, executive vice president of healthcare for Warbird Consulting Partners, a professional services firm with a focus on healthcare financial management. “Organizations and infrastructures have failed because they didn’t think through these integrations,” added Fenstermaker’s colleague Jim Fox, director and senior CFO consultant.

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