This weekend, I was once again reminded of the importance of customer service, or lack thereof. My flight from Halifax to Glasgow Friday was cancelled as a result of a flight attendant who got sick before departure and their inability to find a substitute.
The entire entourage of 130 passengers was herded to baggage claim to retrieve our bags, then to the ticket counter for re-ticketing and eventually to the taxi line for transport to hotels as much as an hour away. The entire 17-hour ordeal for me was frustrating, and on reflection, a case study in poor customer service.
Flight cancellations happen: it’s perhaps the single-most upsetting event road warriors encounter. The supervisor encouraged us to be patient but clearly the procedures in place to respond to cancellations like WestJet flight 30 were either not observed or not in place at all.
Customer service is important to businesses like airlines: it starts with a flight booking and continues until a passenger arrives at their destination. Along the way, there are multiple touchpoints where customer service is hardwired into standard operating procedures and protocols for handling unanticipated problems.
Research about the impact of exceptional customer service point to three major benefits: these organizations grow faster, have higher margins and a better reputation than their competitors. (See Fact File). So, what about customer service in healthcare? It’s a mixed bag.
The good news is that across the healthcare system, our organizations are paying more attention to customer service. Some hospitals have “Chief Experience Officers” and most are using wide range of digital tools so consumers can access their test results, pay bills and make appointments. Insurers have streamlined their coverage, denial, claims adjudication and payment procedures to make it easier for enrollees to get their problems solved and providers to get authorization and payments more quickly. And most medical groups offer digital tools to facilitate scheduling and secure messaging with their clinicians through their websites.
The bad news is that we have a long way to go. Comparing customer service in hospitals, health insurance companies and medical groups to non-healthcare entities, we fare poorly. Studies by Pew, Temken, Gallup and others show a consistent pattern: we don’t do well in providing customer service. Why? Industry leaders and academics give two reasons:
1-Healthcare is complicated
Most consumers don’t understand its complexity and prefer issues be handled by others. Most defer to their physicians’ judgement about their diagnosis or treatment option, even if online information is sought. That’s why Supplemental Coverage is so popular with seniors who can afford it: it essentially means enrollees let their physicians make decisions on their behalf without consideration of costs.
2-Healthcare is a Business-to-Business marketplace
Less than 20% of what’s spent in healthcare is direct out-of-pocket expense to consumers. The majority of spending is based on business transactions between producers (drug and device makers, technology solutions, hospitals and others), distributors (physicians, hospitals and other providers) who purchase their goods and services, mark them up and pass them through to purchasers (primarily employers, insurers and government agencies like Medicare and Medicaid).
That’s why price transparency is so problematic: it exposes deal-terms between producers, distributors and purchasers that are closely-kept secrets of the system. And it puts a spotlight on organizations whose “costs” are simply incredulous.
These reasons are perfectly plausible and understandable. They help explain why customer service in healthcare is more focused on satisfying the business transactions between trading partners in the supply chain rather than customer service involving patients, enrollees, members or customers. Hospital CEOs are not fired if customer service is suboptimal but they are hastily exited by their boards if physicians are disgruntled. Insurers rarely spotlight member satisfaction in earnings calls preferring medical loss ratio’s and administrative overhead. Physicians fiercely defend their reputations and disparage public report cards, customer service reports and social media that do not concur. It’s the way we operate.
Customer service in healthcare is not taken seriously enough.
We operate as if consumers are incapable of being activists in their care and at the ballot box. We excuse our lack of price transparency as a reflection of industry complexity rather than our desire to keep our secrets secret. We are more comfortable operating in a system in which individuals are OUR patients and members and we expect THEM to fall in line.
According to the American Customer Satisfaction Index: 2018, healthcare continues to trail other industries in customer service: on a scale of 1 to 100, banks score 81, financial advisory firms score 81, life insurers score 80, retail health stores score 77 and airlines score 73. By comparison, hospitals score 76, medical practices score 74 and health insurers score 73. And the gap between customer service in healthcare and other industries is widening. That’s why solutions focused on hardwiring customer service results that matter to consumers are so timely, like Studer/Huron’s Five Pillars or MedTel’s surgical case management software that helps reduce cancellation rates to 1%, a major irritant to patients.
Customer service in healthcare needs fresh attention and increased investment. It’s not an after-thought: it’s good business.
I eventually made it to Scotland but my experience last weekend hardwired my resolve to avoid WestJet at all costs if I have a choice. And it made me quite conscious of how our industry handles our own version of cancellations.
PS The signals from DC lawmakers last week have heads spinning in healthcare. First, efforts to end drug rebates were suspended by the White House sending PBM stocks up and leaving everyone else scratching their heads since it had bipartisan support and political appeal. Then, pundits who heard oral arguments in New Orleans in Texas v. Azar concluded the destiny of the Affordable Care Act is a Supreme Court showdown in election season. And Democrats campaigning for the White House in Iowa and New Hampshire last week were carefully walking back commitments to Medicare for All since polls show public fear about its costs. Stay tuned. Healthcare’s on page one again.
FACT FILE: CUSTOMER SERVICE
45% of customers will pay more for your products if it ensures a higher level of service (Accenture)
Americans share their experiences with poor service with an average of 15 people vs. 11 with whom they’ll share a positive experience and more than half have scrapped a planned purchase as a result (American Express 2017 Customer Service Barometer)
74% of people are likely to switch brands if they find the purchasing process too difficult (SalesForce)
After one negative experience, 51% of customers will never do business with that company again(Newvoicemedia.com)
73% of customers find “first contact resolution” to be an important factor for customer satisfaction (Forrester)
Increasing customer retention rates by 5% increases profits anywhere from 25% to 95%(Bain)
It is anywhere from 5 to 25 times more expensive to acquire a new customer than it is to keep a current one. (Harvard Business Review)
A moderate increase in Customer Experience generates an average revenue increase of $823 million over three years for a company with $1 billion in annual revenues. (Temkin)
The majority (66%) of adults feel that valuing their time is the most important thing a company can do to provide them with good online customer experience. (Forrester)
When it comes to making a purchase, 64% of people find customer experience more important than price. (Gartner)
Americans are more likely to post about good experiences (53%) than poor experiences (35%) on social media. In 2017, 35% reported reaching out in social channels, up from 23% in 2014 and 17% in 2012. Of those who have used social media for a customer service concern, 84% say they have received a response or resolution, up from 65% in 2014. (American Express)
Email is still the most commonly used digital customer service channel — 54% of customers have used email customer service channels in the last year. (Forrester)
Customers expect businesses to respond to their emails within an hour.(Toister Performance Solutions)
More than 6 out of 10 U.S. consumers say that their go-to channel for simple inquiries is a digital self-serve tool (such as a website, mobile app, voice response system or online chat). (American Express)
Consumers will wait on hold for an average of 11 minutes before hanging up. The average wait time for an online Help Support/chat is 45 seconds before discontinuing (NewsMedia)
As the complexity of the issue increases, such as with payment disputes or complaints, customers are more likely to seek out a face-to-face interaction (23%) or a real person on the phone (40%).(LiveChat Benchmark Report 2017)
In the past five years, U.S. auto insurance carriers that have provided customers with consistently best-in-class experiences have generated 2-4 times more growth in new business and about 30% higher profitability than their counterparts with an inconsistent customer focus, in part because satisfied customers are 80% more likely than unsatisfied customers to renew their policies.(McKinsey)
The top three drivers in interactions between consumers and physicians: 1-confidence in their provider, 2-teamwork from the clinicians; and 3-whether providers and staff showed concern for their worries. (Press Ganey)
More than half of healthcare executives in highly competitive markets were likely to say improving the consumer experience is a top priority for the organization. However, only 35% of respondents said they had a C-suite member dedicated to addressing consumer experience. (Sage Growth)
HCAHPS scores and a hospital’s profitability: hospitals with “excellent” HCAHPS patient ratings between 2008 and 2014 had a net margin of 4.7 percent, on average, as compared to just 1.8 percent for hospitals with “low” ratings. (Deloitte)
Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance. Upper Saddle River, New Jersey: Pearson Education, Inc. ISBN 0-13-705829-2.
KrisEmily McCrory, MD “The danger in treating patients as customers” Physicians Practice August 9, 2018 www.physicianspractice.com/patient-relations/danger-treating-patients-customers
Merlino J, Raman A, Understanding The Drivers Of The Patient Experience. Harvard Business Review, September, 17, 2013. http://blogs.hbr.org/2013/09/understanding-thedrivers-of-the-patient-experience.
Malott, D, Ayala, L, The Root of All Satisfaction, Patients Want Caregivers Who Provide Information and Compassion. Press Ganey Australia, Satisfaction Snapshot. http://www.pressganey.com.au/snapshots/Patients%
Arthur L. Kaplan, Ph.D. “No, Patients Are NOT Consumers, and MDs Are NOT Providers” Medscape April 23, 2019 www.medscape.com/viewarticle/911562
About CAHPS: Consumer Assessment of Healthcare Providers and Systems (CAHPS®) is an AHRQ program that began in 1995. Its purpose is to advance our scientific understanding of patient experience with health care. The acronym "CAHPS" is a registered trademark of the Agency for Healthcare Research and Quality (AHRQ) HCAPS www.ahrq.gov/cahps/about-cahps/index.html
Deloitte. “The Value of Patient Experience.” Deloitte Center for Health Solutions 2016 https://www2.deloitte.com/content/dam/Deloitte/us/Documents/life-sciences-healthcare/us-dchs-the-value-of-patient-experience.pdf
American Customer Satisfaction Index 2018 www.acsi.org/acsi-benchmarks/benchmarks-by-industry
Huron Studer Group https://www.studergroup.com/