Is Your Hospital Throwing Money Out The Window?

As a parent, I’ve learned there are two types of tasks–those my children won’t do the first time I ask them, and those they won’t do no matter how many times I ask them. Here’s the segue. Hospitals have a gazillion business systems.  Every business system can include the following three things: people—doing things; processes — the way and order in which things are done; and technology — whatever part of those things that may be automated. Two examples of business systems — ordering your meal in the drive-through lane at Burger King; open heart surgery.

Believe it or not, from a process standpoint, each of the hospital’s gazillion business systems can be sorted into one of two buckets — Easily Repeatable Processes (ERPs) and Barely Repeatable Processes (BRPs).

An example of an ERP industry is manufacturing, which executes identical business systems thousands of times: clean the Pepsi bottle, fill the bottle with Pepsi, put on the bottle cap, and place the bottle in the box.

Healthcare, in many respects, is a BRP industry. BRPs are characterized by collaborative events, exception handling, ad-hoc activities, extensive loss of information, little knowledge acquired and reused, and untrustworthy processes. They involve unplanned events, knowledge work, and creative work.

ERPs are the easy ones to map, model, and structure. They are perfect for large enterprise software vendors like Oracle and SAP whose products include offerings like ERP, SCM, PLM, SRM, and CRM.

How can you tell what type of process you are trying to incorporate in your effort to improve patient experience? Here’s one way. If the person standing next to you at Starbucks could watch you work and accurately describe the process, it’s probably an ERP.

So, why discuss BRPs and ERPs in the same sentence with patient experience? The answer is quite simple. Think of BRPs — barely repeatable processes — as those processes associated with HCAHPs; exception handling, unplanned events, and knowledge work.

Think of ERPs — easily repeatable processes — as those associated with all of the back office support processes patients and prospective patients have with the health system. Access processes. Those include:

• Scheduling an appointment
• Scheduling labs & therapy
• Requesting medical records
• Getting information about whether a second opinion is needed
• Admissions
• Billing
• Payment
• Submitting a claim
• Queries
• Complaints

Here is what is unique about a hospital’s ERPs:

• Every time a patient or prospective patient tries to complete one of these processes they have an experience
• That experience is either satisfactory or unsatisfactory
• The hospital has no idea if the person was satisfied
• The hospital has no idea if the person will continue to be or will ever become their patient
• All of these processes happen outside of the hospital
• They happen on the phone and on the internet
• They have nothing to do with HCAHPs
• Hospitals do not measure these processes
• Hospitals do not try to improve the effectiveness of these processes

Hospitals behave as though these processes have nothing to do with patient experience. Just because hospitals do not acknowledge the existence of or the importance these systems have on patient experience does not make them irrelevant.

True story of a top-five US hospital. A cancer patient between treatments who is experiencing the after-effects of chemo calls the hospital to schedule a follow-up exam. She spends almost three hours on the phone. She told me that because of that one event, she will never recommend that hospital to anyone.

Now to the meat of the matter: money. Healthcare may argue that it is not in business for the money. While that may be true, they are not in business if there is no money. So let’s talk about dollars.

• One study concluded that every time someone contacts a hospital, the potential revenue in play is $7,000. Provide a good experience during that contact, you keep the money. Provide a bad one, and some other hospital gets the money.
• The average lifetime value of a patient is between $180,000 and $250,000.
• The average lifetime value of a person who chooses a hospital other than yours is zero.
• The cost of poor experience is low patient retention and very low referrals.

The taxonomy of 99 percent of existing patient experience business systems is that they are ineffective, unmeasured, and proving awful experiences at the places where people touch the health system — the phone and the web.

Ignoring these aspects of patient experience is no different than having your hospital’s CFO drive down the highway while pouring bags of money from the window.

What do you think?

[This piece was originally published on Paul Roemer’s blog, Disrupting Patient Access & Experience. To follow him on Twitter, click here.]