Research addresses importance of patient experience

Published: 2014-06-05

A new study that explores the impact of combining standardized healthcare practices with an increased emphasis on patient experience not only reveals improvement in two significant clinical outcomes, but also quantifies -- for the first time -- the cost of this new healthcare model.

Claire Senot Aravind Chandrasekaran Peter Ward

Claire Senot, Aravind Chandrasekaran, and Peter Ward

Claire Senot, Aravind Chandrasekaran and Peter Ward from Fisher’s Department of Management Sciences, teamed with Susan Moffatt-Bruce, chief quality and patient safety officer at The Ohio State University Wexner Medical Center, and Anita Tucker from the Harvard Business School on the study. Results from this study have important implications to hospital administrators, given recent changes to how hospitals are now reimbursed through Medicare’s Hospital Value-based Purchasing Program.

“Hospitals are being evaluated on patient experience in addition to their compliance to clinical standards, and if they’re performing poorly by not communicating with patients, they’re being penalized with reduced reimbursements,” Chandrasekaran said. “Hospitals are at risk of losing up to 1 percent of their base operating DRG (diagnosis-related group) amounts if they don’t perform well on patient experience. This could end up being millions of dollars for larger hospitals”

The study, “The Impact of Combining Conformance and Experiential Quality on Health Care Clinical and Cost Performance,” gathered data from 3,474 U.S. hospitals over a six-year period and examined the relationship between conformance quality (adherence to evidence-based standards of care), patient experience (quality of interaction between patients and caregivers) and performance measures including clinical outcomes and cost. The results of the study showed that hospitals that adopted high levels of conformance and patient experience reported shorter patient stays and reduced 30-day re-admission rates.

These improved metrics could translate into additional revenues for hospitals. A hospital with high marks on both conformance and patient experience can reduce a patient’s average length of stay by 13 minutes, which translates to roughly one bed available per day for every 111 patients treated. As an example, a hospital receives $6,296 from Medicare for each heart failure patient it treats, and the average stay is 5.7 days. If a hospital treats 10,000 patients annually, and can save one bed day for every 200 patients treated (a conservative estimate), it would save 50 bed days per year – providing opportunities to care for nine additional heart failure patients and Medicare revenue of more than $56,000 per year.

What’s the catch? The up-front cost of delivering higher levels of combined quality is $192 more per patient discharge. The increase in cost is due in large part to significant training costs incurred by hospitals to change the mind-set of doctors and employees about the importance of patient experience. However, the study suggests these costs could decrease over time as combined quality in hospitals becomes standard.

The paper -- one of the top 10 most downloaded from Harvard Business School’s working papers collection in 2013 -- also helped define key components of patient experience. Communication with caregivers, their attention to pain management, and responsiveness to requests from the patients are critical elements of patient experience (rather than environmental amenities such as cable TV, meals, etc.).

“We found that what many people in the healthcare industry thought were important components of patient experience weren’t necessarily important to patients,” Chandrasekaran said. “Being able to interact with doctors and nurses and being a part of the healthcare process is what mattered most, and that’s what hospitals are getting evaluated on.”

The Ohio State University Fisher College of Business Go Beyond