Understanding the lifetime value of your patients
Now, more than ever, building long-term relationships with patients is vitally important. A positive relationship can make the difference between a one-time visit and a decades-long connection. When you fully understand the lifetime value of your patients, it becomes clear why it’s so important to foster positive patient experiences — and grow your organization’s bottom line.
The COVID-19 pandemic has made focusing on patient lifetime value even more urgent. Patients have become fearful of visiting healthcare facilities and are delaying routine visits and even visits for pressing healthcare needs.
“Ensuring that patients feel confident that they’re getting the best care, that it is safe, and that they can trust the caregivers and the employees that are seeing them — this has a direct impact on the ongoing profitability of healthcare organizations,” explains Patty Riskind, head of global healthcare for Qualtrics, an experience management platform that helps organizations measure patient experience, as well as employee and provider experience.
Calculating patient lifetime value
You can put an actual number on the lifetime value of your patients. First, Riskind says to figure out the gross annual profit margin for an average patient by subtracting care and administrative costs from reimbursement utilization. This gives you a gross profit margin. Now, multiply that figure by the number of years of the patient relationship. Finally, subtract any patient acquisition costs. For one year, the final figure may not look very impressive. But when you project five, 10, or 25 years into the future, you begin to see the true lifetime value of each patient.
Another aspect to consider is your patient retention rate. What percentage of your patients will be using your services next year or 10 years from now? The higher that retention rate, the bigger impact of your patient lifetime value. Measuring the patient retention rate is key because knowing that rate will help you understand how much effort you’ll need to put into improving patient experience.
How patient experience impacts the bottom line
It’s a simple connection: positive patient experience leads to longer patient relationships. Additionally, happy patients will spread the word to their family and friends.
“When you look at the lifetime value of a patient, experience makes all the difference in the world,” says Kristin Baird, president and CEO of The Baird Group, a consulting company that helps make healthcare better for both patients and the people who serve them. “Experience is a retention strategy. When the experience is good, they’re not only going to return, but they’re also going to talk very positively about it. So, you want to make sure that you’re creating an experience that will not just fail to offend people, but really wows them into saying, ‘I trust them. I wouldn’t go anywhere else.’”
Measuring patient experience can also reveal opportunities for streamlining care and reducing costs. “In terms of quality and outcomes, the ability to better understand the patient’s perception will ultimately impact how care is delivered,” Riskind explains. “On the cost front, oftentimes patient experience uncovers redundancies and things that would frustrate a patient.”
Focusing on these redundancies and frustrations enables healthcare organizations to address bottlenecks and make throughput more effective and efficient. “You can use this to grow market share, to cut costs, to really have an impact on the viability and profitability of your business,” Riskind says.
Why now is the right time to focus on patient experience
The COVID-19 pandemic has slammed healthcare organizations with new challenges — to put it mildly. Despite the chaos, right now remains a pivotal moment to focus on patient experience. The steps organizations take to make patients feel safe will be key to their success in preserving patient relationships.
“People were afraid to seek healthcare because they didn’t want to get infected. Now we’re trying to get them back. What is the experience really like for them, and what are we doing to instill trust in the healthcare system?” Baird asks. “Are we sending the right messages? Are we making it seamless? Are we assuring them that they’re protected and safe when they come for care? Are we instilling confidence in the virtual experience? All of those things come together when it comes to the patient experience.”
Baird notes that some organizations have been more effective than others in communicating their patient safety procedures to the community through advertising and direct patient communication. Even delivering information when a patient calls to schedule an appointment can make a big difference. “There can definitely be a script that would reassure people about what to expect when they come. It takes less than a minute to go through that script, but it’s very reassuring,” she says. “When patients aren’t given this kind of information, they lose confidence and go on to the competitors.”
In the early days of the pandemic, Riskind says Qualtrics helped healthcare organizations survey their patient base to discover the fears that were keeping people away. Knowing those pain points enabled them to begin re-instilling confidence and trust so patients could comfortably return. Now, she says, organizations should be asking, “Was the process efficient in terms of texting or calling ahead of time? Did you feel like the organization was responsive to your concerns about COVID? When you saw the physician, did they keep their mask on and explain why?”
Don’t overlook the digital patient experience
The pandemic has greatly accelerated a shift to telehealth appointments for all kinds of patient needs. That’s why it’s imperative for healthcare organizations to begin considering the digital experience of their patients.
“A lot of people — seniors especially — don’t know how to use a computer as well as, say, a younger person,” Riskind says. “So, it’s making sure we ask questions along the way. ‘Did you feel comfortable with the scheduling process?’ ‘Did you feel that the physician listened to you even though it was through the computer?’”
“It’s not enough that the technology works. We have to start to focus on what makes a quality provider interaction,” Baird adds. “I tongue-in-cheek call it ‘Web-side manner.’ There are specific skills that providers can and should be developing, because it is foreign to be on camera.” For example, if a provider is looking straight into the screen instead of into the camera, the patient will not feel like the provider is making eye contact with then. And if the provider is using two screens, with the patient chart on another screen, their face may be turned away from the patient for much of the visit.
Baird says that a good Web-side manner includes many elements of a good bedside manner. “Tell them what you’re about to do. Tell them what you’re doing while you’re doing it and summarize at the end. Use open-ended questions, look at the camera, and write questions. Thank them for asking questions. Then it’s more of a seamless conversation.”
Maximize patient lifetime value by maximizing patient experience
Patient experience feedback can enable you to make changes in the moment, so the next patient has a better experience. “The intent is to create a mechanism that empowers continuous improvement and continuous change,” Riskind says.
Healthcare organizations and providers have been forced to adapt in real time to the changes brought by COVID-19. This upheaval has made it more important than ever to double down on measuring and improving patient experience to build long-lasting patient relationships.
Weatherby Healthcare has the locum tenens physicians and advanced practice providers to help you deliver a great patient experience. Give us a call at 954.343.3050 to request a consultation.