Customer Satisfaction Scores Monetized. Who Would Have 'thunk It'? - By John Hendrie

We in Retail and certainly Hospitality have placed a great deal of time, money and reputation in Customer Satisfaction.  This is our report card.  We have solicited that commentary through technology and from various electronic Feedback systems, comment cards and actual verbal exchanges.  We also receive Feedback that is not sought from letters, phone calls, stoppin’ by the office, front desk or counter.  We want to hear how we did, where we excelled, where we fell short.  From that insight we make changes, build relationships, bonus our employees, market our wonderfulness, etc.

Customer Satisfaction surveys and scores have always had a relationship with revenue, more amorphous than real, actual, touchable results.  We believe that better scores indicate better performance and, ergo, expect better financial results.  If we satisfy our customers, they will spend more, shop at our stores more frequently, return to our restaurants and book more hotel rooms.  So, if our Scores go up by some percentage, we should see our revenue increase, as well.  The model works most of the time, but it is hardly exact.

The last place you would expect to find a straight forward model for revenue attached to a Customer Satisfaction score would be the US government.  But, with Medicare, they dare, and for Hospitals some of the money they receive through the Medicare Program reimbursement will be tied to just how well those Hospitals have performed in terms of Patient Satisfaction.  The New York Times questioned (11/8/11), “Test for Hospital Budgets:  Are the Patients Pleased?”  As the article pointed out, “Medicare’s new rule, mandated in the Affordable Care Act, pits hospitals against one another in competition to best satisfy patients; those with the best scores will receive more money”. 

As we know, Hospitals are very much like a full service hotel – rooms, food service, amenities and the like.  The only difference is that the “guests” probably would prefer not to be there.  So, Satisfaction will be tough to deliver even on the basics, plus, some patients just like to grumble in certain areas of the country, particularly the Northeast.  Hospital and Medical Center Brands, just like their brethren Hotel companies, must compete in some tough markets. 

In setting payment schedules, Medicare will credit Hospitals only for patients who say their experiences were always good.  Patients will be asked to rate their stay at the Hospital on a 10 point scale, and Medicare will only credit  those  Hospitals that receive a 9 or 10.  The article noted, “This is likely to be a tough threshold for Hospitals”.  Initially, Medicare will withhold 1% of reimbursements and then redistribute this “bonus” based upon scores.  In 2016, that amount to be redistributed increases to 2% of total Medicare expenditures.  Patient Experience scores will represent 30% of that Bonus, while the remaining 70% is reflected in clinical guidelines for patient care.  Medicare is hoping that commercial insurance companies will follow suit (Wellpoint already has).  Dear reader, we are not talking nickels and dimes here!

The walls are closing in!  How have Hospitals started to change that sterile and still angst driven Experience for their Patients?  Nothing like the threat of losing money to spur action.  Property renovation, nurses visiting the rooms more frequently, quicker response to patient call buttons, actual scripts to cover a patient dialogue, extensive customer service training – far greater engagement practices, which we in Hospitality can fully appreciate.

This is a terrific experiment in Customer Satisfaction engineering, changing behaviors and rewarding performance.  The Consumer wins again, as the Customer Experience reigns!

 

 

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