Healthier Financials from the Patient Experience
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Healthier Financials from the Patient Experience

  Apr 18 2019

# Healthcare and Pharmaceutical Management

Performance on patient experience scores can impact the cash flow and operating profit margins of hospitals, which may mean organizations have to align quality metrics and leadership to influence patients’ perceptions of their care.

This abstract aims to answer two questions:

  • What is the relationship between patient experience and financial performance? And;
  • What role does the hospital’s type play in moderating that relationship?

Recent research across 100 US hospitals found that the patient experience in those hospitals did have an impact on financial performance, specifically finding it had positive relationships with cash flow margins and operating profit margins across for-profit, non-profit and governmental hospitals.

Those different types of hospitals did have a moderating effect on the experience-financials relationship, with governmental hospitals having the greatest moderating effect.

Government hospital facilities may “sacrifice operating revenues,” as in treating fewer patients, or incur additional costs “in order to continue improving patient experience after achieving a certain level.”

This is an area where smaller hospitals may outperform their larger counterparts, as facilities with more than 50 beds and 100 employees were consistently scored worse on patient experience.

The research highlighted that for smaller hospitals, it’s easier to make changes, also, rural hospitals are more familiar with what their patients need as they are closer to the communities they serve.

The study should have implications across healthcare organizations. For hospital and health system boards, it is recommended to establish a “standing patient experience oversight committee” within existing governing boards, train those boards on quality metrics related to patient experience and include those metrics in the key performance indicators for hospital executives.

For hospital leaders, the research also recommended developing a Chief Experience Officer (or CXO). That role has become increasingly common in healthcare C-suites, with a 2017 survey of 1,000 hospitals by the Beryl Institute finding 63 percent of facilities already having such an executive in place.

Emphasis on those efforts can’t stop at the C-suite and board level, and should include steps for employee engagement, like maintaining appropriate nursing staff levels and implementing daily nurse leader rounds to observe patient interactions.

Dr. Mohammed Al Ayoubi

Dr. Mohammed Al Ayoubi is a leading healthcare strategy and operations consultant and trainer with over 25 years of experience working with many leading international organizations across both the healthcare and non-healthcare sectors.

Throughout his career, Mohammed worked with and for iconic institutes such as the National Health Service (NHS), Harvard Medical School, Johns Hopkins, Cleveland Clinic, Bumrungrad, FedEx and Airbus Industries. Mohammed’s professional highlights include healthcare strategy design and operational mobilization with a focus on a sustainable commercial and financial outcomes. His specialties include in-depth organization wide assessment and evaluations, service excellence benchmarking, process mapping, operational analysis, and training. As the Head of Healthcare Consulting in Dubai, he currently assists healthcare organizations in the Middle East effectively transform their strategies and operations.