hfm January 2002
By Bobette M. Gustafson
In today's consumer-focused healthcare market, it is incumbent upon healthcare organizations to adopt a revenue-cycle strategy that not only ensures strong financial outcomes, but also enhances patient satisfaction with and loyalty to the organization. When devising such a strategy, patient financial services (PFS) leaders should keep in mind a fundamental principle: patients' impressions of a provider's PFS department typically are based on how they were treated during their encounter with the department, rather than on their perception of the efficiency of the department's revenue-cycle processes. Therefore, to ensure that patients are satisfied with their revenue-cycle experience, PFS leaders need to understand patients' expectations and design and implement processes that are consistent with those expectations.
Traditional Method for Assessing Patient Satisfaction
Most healthcare organizations conduct surveys of patients to determine their level of satisfaction with their healthcare experience. Unfortunately, these survey instruments often reflect only the organization's assumptions about what patients value, rather than patients' actual expectations or needs from their encounter with the organization. These surveys typically are mailed to patients soon after their treatment and primarily consist of a few questions about care access and patient-accounting processes.
For example, patients may be asked to evaluate registration wait times and the friendliness of PFS staff. In addition, a survey is likely to include vague questions about whether the billing process "was understandable and effective."
A significant problem with such surveys is that they often are mailed to patients before their claims have been submitted to the third-party payer, and patients therefore may be asked to answer questions about the billing process before they have received any bill-related information or other contact from the healthcare organization. Moreover, patients may continue to be affected by various revenue-cycle activities for an extended period after being asked to complete the survey.
For example, it may be weeks before the patient is informed that the payer denied payment for their service because a required preauthorization was not secured. Months may pass before a patient receives the first invoice for their portion of the bill, and they may not have received any prior explanation of benefits or suggestions regarding the options that are available for resolving the balance. The traditional approach to assessing patient satisfaction, therefore, offers little strategic value to most organizations.
New Method for Assessing Patient Satisfaction
A new method of assessing patients' satisfaction with their business-office encounters is based on the "moment-of-truth" principle, a customer-service concept that was introduced in the 1980s by Jan Carlzon, then president and CEO of Scandinavia Airlines.a Carlzon describes a moment of truth as any episode in which a customer comes in contact with some aspect of an organization and forms an impression of the quality of its service.
In their book Service America in the New Economy, Karl Albrecht and Ron Zemke advocate an approach to understanding customer satisfaction that focuses on such moments of truth.b Albrecht and Zemke warn service organizations that if they intend to compete based on their ability to deliver outstanding customer service, then they need to really know-- rather than assume they know--what constitutes such service. Moreover, organizations constantly need to reappraise and renew their understanding of customer expectations regarding such service because the longer an organization remains in business, the more likely it will hold onto outdated assumptions.
PFS leaders therefore should work with the organization's market research team to identify the revenue-cycle moments of truth--those encounters with the PFS department that cause patients to form conscious or subconscious impressions about the organization. This research should include development of a flowchart of the revenue-cycle process from the patient's perspective, including steps that might occur outside of the hospital, such as an encounter in the office of an affiliated physician.
For example, patients may regard registration encounters with the physician office and hospital PFS department as significant moments of truth that are essentially indistinguishable from each other. If the physician refers the patient immediately to the hospital, the patient may become annoyed at being asked to provide the same demographic, clinical, and insurance information to the hospital that he or she had just provided to the physician office.
The PFS leaders then should hire a professional research firm to conduct studies to validate the organization's findings, identify any moments of truth the organization might have missed, define patients' expectations regarding each identified revenue-cycle activity, and assess the effects of meeting, or failing to meet, those patient-satisfaction expectations. These studies should be conducted using survey instruments developed by the research firm to gather information from patients both individually and through focus groups.
Patient-Focused Revenue-Cycle Management
Armed with data from the foregoing research, PFS leaders can develop new approaches to revenue-cycle management based on customer preferences. The findings are likely to indicate that a single approach will not adequately meet the needs of all patients for all revenue-cycle moments of truth. Thus, for each PFS encounter, patients should be offered options that will allow them to design the encounter according to their personal preferences.
For example, many patients prefer registering at a central location in the facility where they can be greeted and escorted to their place of service. Other patients, however, prefer a decentralized approach that allows them to register at the point of service. An organization that truly listens to its patients therefore will adopt neither a centralized nor a decentralized model. Rather, it will develop a process by which patients are asked to indicate their registration preference and then accommodate each patient's preference appropriately
The same principle applies to other revenue-cycle activities. For example, patients may prefer to schedule a service by phone with the assistance of a customer-service representative or by means of an on-line self-service application. Or patients with an outstanding balance may prefer to discuss their payment options in person with their designated financial counselors at a convenient time and place, or they may prefer to receive a clear, comprehensive explanation of their options by mail or e-mail. Patients also could be offered various options for making payment, such as by mail or electronic transfer.
Conclusion
A revenue-cycle management strategy that focuses on each moment of truth allows PFS professionals to define and effectively control each critical activity in a way that accounts for patients' preferences. To effectively implement this approach, however, organizations need to create and maintain a preference data file for each patient to guide PFS staff in structuring their patient encounters.
PFS leaders also can use the information in these data files as a basis for modifying the traditional, written survey to account for the redefined revenue-cycle moments of truth and individualized patient-satisfaction success factors. These modified surveys should be supplemented with more extensive interviews conducted with randomly selected patients regarding specific processes and satisfaction criteria indicated in their data files.
Healthcare organizations that adopt this approach will differentiate themselves from other providers by being able to treat each revenue-cycle encounter as an opportunity to provide the highest-quality service tailored to each patient's needs and preferences. As a result, the revenue cycle--a primary source of patient dissatisfaction--will become a source of customer loyalty Moreover, although the healthcare organization will see an increase in costs associated with providing such customized service to patients and maintaining the preference data files, these costs are likely to be more than offset by the financial benefit to a healthcare organization of having lifetime healthcare customers who remain with the organization because they feel that it cares about them.
Bobette M. Gustafson is president, Gustafson & Associates, Inc., Port Washington, Wisconsin, and a member of HFMA's Wisconsin Chapter.
Footnotes:
a.Carlzon, Jan, Moments of Truth, New York, New York: Perennial Library, 1989.
b. Albrecht, Karl, and Zemke, Ron, Service America in the New Economy, New York, New York: McGraw-Hill, 2002.
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