Resource Center:

Improving Patient Satisfaction Now:
How to Earn Patient and Payer Loyalty, Chapter 1

Winning Practices for Loyal Patients
By Anne-Marie Nelson, Steven D. Wood, Stephen W. Brown, Sheryl Bronkesh and Zachary Gerbarg, MD

"I've focused on the opportunities, not the losses,
in managed care."
Richard Abrams, MD, Denver, Colo. internal medicine physician

In our last book, Patient Satisfaction Pays: Quality Service for Practice Success, we told you about a good friend of ours, a family physician who was dealing with the demands of managed care in his medical practice. We told you about his frustration as he confronted the ever-increasing piles of paperwork, health plan policies, reimbursement complexities and the claims on his time, energy and expertise that came from staff, patients, colleagues, and administrators.

A competent, caring physician, he has a simple patient care philosophy: Treat each patient as he would his own mother or father. He's like many of you. He gets personal satisfaction and fulfillment from the relationship he has with his patients, and from being able to help them when he can. He is committed to quality care no matter who pays the bills, or how much of his fee he is paid by the insurer or managed care plan.

"Managed care has become the dominant mode of health care delivery in the United States, and providers must deliver not only on price, but also on value, quality and performance."
The State of Health Care in America 1995, Business & Health

He sees health care changing, and like you, doesn't always like what he sees. Every day, stacked up on his desk are more of the things that take more of his time and give him less pleasure - referral forms to fill out; journals, newsletters and form letters to read; administrative "stuff" that seems to have little to do with medical practice but everything to do with continuing to practice medicine. The operational and administrative stuff nibbles at the edges of every hour and chews big chunks out of the day, leaving less time for the things he enjoys - diagnosing, treating and interacting with patients.

And patients are changing, he says. They are more knowledgeable consumers, but also more demanding of time, information, referrals, and hard and fast answers in a field that is unpredictable art as much as it is methodical science. Patients today expect more, but they are willing to commit less, moving on to another plan or another provider with seemingly none of the loyalty to a personal physician valued by traditional medicine.

Change in health care should not be surprising. After all, the foundation of medicine is change - in technology, pharmacology, the human body's response to environmental assaults. In 1986, our book, Marketing Strategies for Physicians: A Guide to Practice Growth began with the following words: "The practice of medicine is changing - radically.' We went on to point out all of the changes that had occurred since 1950. A surge in the number of physicians, from 200,000 to over 500,000 by the mid-'80s. A significant increase in the average physician's net income ($16,000 before taxes in the "good old days" of 1950). Medicare. Medicaid. The simmering of health care's alphabet soup - HMOs, PPOs, IPAs.

"It's very unsettled out there. We're dancing along without much control of our destiny, without knowing who the managed care players will end up being."
Stephen Hales, MD, New Orleans pediatrician

Medicine isn't unique. The changes we're all encountering today come with the territory of our technological age. Every industry periodically goes through upheaval. It's how innovation moves from theory to reality. And it's how people respond to change that determines whether they become winners. How about you? Do you seek the comfort of the familiar? Or does the turbulence of change propel you to action?

Our doctor friend went nameless in the last book, but he deserves to be named, because he has responded in winning style to the evolution of health care. Rather than fret about how managed care has disrupted his practice, Marc Lato, MD, has adapted. And how! Since 1993, when Patient Satisfaction Pays was published, Marc Lato, a family physician in practice with Jerry Fioramonti, MD, in Phoenix, Ariz., has:

• Hired a consultant to improve efficiency and productivity in the practice.
• Redefined job descriptions and hired an office manager for the first time.
• Implemented periodic office meetings with staff and physicians.
• Refined the patient flow process to eliminate bottlenecks and inefficiencies.
• Added a physician assistant, Yvette Newell.
• Added a phone line for prescription refill calls.
• Completed several courses in management, including a pilot program offered by the American Academy of Family Practice.
• Helped found a management service organization for providers in his geographic area.
• Signed contracts with a number of managed care plans, including several that have capitated reimbursement.
• Signed on as assistant medical director for two health plans.

Marc would prefer to practice old-fashioned fee-for-service medicine, just as most doctors would. But he knows that fee-for-service as the predominant form of reimbursement today is as dated as the iron lung. Wishing for it to return is like wishing on a star, and just as likely to produce results.

Instead, Marc has focused on making changes or adjustments in his practice that allow him to profitably practice the kind of medicine he enjoys and takes pride in - the kind of medicine that keeps him professionally satisfied and his patients loyal.

Wait! Hold on -- he told us patients are not loyal. Their employers change plans from one year to the next, and if he's not a provider with their new plan, those patients are gone. That's not loyalty!

You may be nodding your head in agreement. Patient loyalty, if it exists at all, may seem ephemeral and shallow. Patients are here today, telling you what a great doctor you are and what a pleasure it is that they have a physician they can talk to and trust. And tomorrow they're calling to say, "Please transfer my records, I've changed jobs and you're not on ABC HMO's provider list."

When this happens day after day, it does seem that patients don't care who treats their allergies, arthritis or otitis media as long as the lab tests are covered and the medication prescribed is on the plan formulary. And at least one national study seems to support your perception of declining loyalty. A 1995 survey of 64,000 consumers in 20 major cities found that "whether a current doctor is in a health plan" was among the lowest ranked reasons for selecting an HMO. Yet, the same survey found that patients who were satisfied with the quality of the doctors in the plan were 3.5 times more likely to be satisfied overall.

The truth is that when a person finds a doctor he likes -- a physician in whom he has confidence and who seems to care, someone with whom he can communicate, that patient thinks of that doctor as his doctor. He wants to be able to call the office and be recognized. He wants the staff as well as the doctor to know him -- to know that every spring when the dogwoods bloom, he sneezes and snuffles with allergies. He wants them to know that he always has a pun -- usually bad -- when he comes for his appointment, and that he likes to know every side effect of a prescribed drug or treatment. He likes the familiarity and friendliness of having a doctor who knows him, a doctor he can call his own.

Unfortunately, sometimes economic practicality overrules loyalty, whether it's an individual's loyalty or an employer's. A 1996 survey for the Washington Business Group on Health found that cost was the factor most often used by employers in selecting a health plan. Report cards, accreditation status and disease outcomes were at the bottom of the list of items that influenced their choice.* The emphasis on economics also applies to individual patients, often driving them to switch plans in order to save on premiums, co-pays and deductibles. Sometimes this forces patients to leave you, however unwillingly.

* While disheartening, this perhaps should not be surprising. Consider that U.S. employers spent an average of $3,741 per employee in 1994 for health benefits, according to Business & Health magazine's report, The State of Health Care in America 1995. In the Midwest, the cost is more than $4,000 per employee.

After all, economic reality plays a role in many of the decisions you make in your practice, whether it's deciding to buy a less-costly computer instead of the one with all the upgrades and the higher price; or hiring an office manager with less experience because the one you really wanted asked for $7,000 more in annual salary. As you've seen, patients also make difficult decisions like these. Their employer drops a health plan, or the monthly premium doubles but their take-home pay doesn't change. Or you decide not to re-sign an HMO contract (or they decide not to re-sign you). And suddenly that seemingly satisfied patient is gone.

Those patients are no happier about leaving than you are. Satisfied patients who have to find a new physician go through the same "get-acquainted-fill-out-the-medical-history-evaluate-compatibility" routine you go through with your new patients. It takes time and energy, and most of them would just as soon stick with the doctor they know, trust and trade bad jokes with. These lasting relationships are not only easier, they make for better medicine. And, as a doctor we spoke to wisely pointed out, patients who have been with him for many years also take less time, because he knows their history, their habits and their compliance tendencies, and they trust him to diagnose and treat them properly.

According to a 1995 Harris poll, while three out of 10 persons have no regular doctor or have been with their doctor less than a year, 50 percent have been with their regular doctor for three years or more. This is the yin and yang of health care today. For growing practices, there are a number of "doctor-less" consumers available to forge a permanent health care partnership. And those already in strong doctor-patient relationships are driving an interesting trend that bodes well for physicians who are taking actions to improve patient satisfaction. In some parts of the country, there is a push by employers and business coalitions for HMOs to have larger networks of providers so their employees can stay with their current doctor. Employers and payers listen to and heed the voice of patients. Are you?

Nevertheless, we agree that some patients are not as loyal today. And a lot of doctors spend less time with patients today than they used to. In both cases, there is often little choice. The system imposes efficiencies and expectations that are necessary, if unpleasant. Does this mean that every patient who leaves your practice after six, or 12 or 48 months does so because he or she regards physicians as commodities, easily replaced?

Sometimes yes. And sometimes no. Some patients are fickle. They never form an affiliation with their doctor. But many more do, and they change doctors regretfully. Just as you regretfully spend a little less time with each patient in order to be able to fit in all the necessary non-patient-care activities everyday that keep your office operating and the bills paid. Admittedly, there are patients you don't mind spending less time with. But more often, you probably leave the exam room thinking you'd like to have another few minutes to explain in detail the alternative therapies that are effective for Jim Larsen's condition. Or just to shoot the breeze with Luisa Gonzalo about the performance of the pro basketball team to which you're both devoted. But your next patient is waiting in Room 3, your nurse reminds you, and so you move on.

Indeed, you've probably made a number of changes in your office operations, equipment and staff, perhaps even in your professional relationships. You're not alone. The statistics reinforce the need for those changes. For example:

• In 1996, some 56 million people in the U.S. has HMO coverage, according to the American Association of Health Plans (formerly the Group Health Association of America). See graph, Figure 1-2.

• Nearly 600 HMOs provided health care coverage in the U.S. in 1995, compared with 175 in 1976. The number of HMOs has declined from a peak of 650 in 1987, but total membership continues to climb.

• There were 509 health care mergers and acquisitions in 1994, and 277 in the first six months of 1995.

• 61 percent of U.S. physicians had at least one managed care contract in 1990; by 1994, 77 percent did. Physicians participating in at least one HMO in 1995 earned 11 percent more than they did in 1993, with a net income of $164,480 for all specialties, compared to net income of $124,760 for providers with no HMO revenues.

• From 50 percent to 85 percent of U.S. group practices earned revenues from HMO and PPO contracts in 1994. Capitated revenues averaged 20 percent of total income, up by seven percentage points from 1993.

Your patients are changing. They are growing older; they're also more knowledgeable and have higher expectations about health care, as Marc Lato noticed. Even 65+ patients, long viewed as complacent and eager to do "whatever you say, doctor" are more demanding, according to American Demographics magazine. "No longer will they passively take their medicine. The seniors of the 1990s (are) savvy consumers filled with questions . . . They'll keep . . . track of breakthroughs in medical technology and treatment. If they can't share in the latest advances, they . . . want to know why."

But one thing has not changed, and we predict it will not change, come the millennium, a cure for cancer or even a radically new health care system. It is this:

Patient satisfaction will always be a fundamental requirement for clinical and financial success in any size or type of practice, for providers of every specialty.

Health plans count on patient satisfaction, they measure it, monitor it, pay for it and penalize when you don't achieve the same level your peers do. Patient satisfaction is a critical measure for health plans because:

• It is related to member retention. Patients who are satisfied with their doctors are more likely to stay with their health plan. The warning of U.S. Healthcare president Leonard Abramson which we used in Patient Satisfaction Pays in 1993 still applies: "Dissatisfied members have feet -- they'll walk away from you."

• Satisfied patients are more compliant. Compliant patients cost less.

• Satisfied patients make for effective marketing. They talk up their doctor and their health plan to friends and co-workers.

For these and many more reasons that are a lot more personal and important to you as a health care provider, this book presents the need for and the value of patient satisfaction in your practice. It's true whether you're a solo practitioner like Bremerton, Wash. family doctor Robert Bright or Saul Schreiber, or part of a large multispecialty group practice like Denver internist Richard Abrams. You will learn not only how a commitment to patient satisfaction enhances medical care quality and your own satisfaction; but also how managed care organizations are using patient satisfaction as one of the criteria by which they measure and reward their providers. Patient satisfaction is one of the criteria by which the National Committee on Quality Assurance (NCQA), the accrediting body for managed care organizations, measures health plans. It's also one of the health plan rating measures used by employers and business coalitions.

Patient satisfaction is more important than ever. And yet, it's not enough to have patients who are satisfied. You must have extremely satisfied patients. Because people who are only satisfied, or somewhat satisfied, can be easily enticed to another physician -- or another health plan.

As we've pointed out, managed care organizations expect providers to score high in patient satisfaction because satisfied patients tend to be loyal members, and loyal members are more profitable. While new enrollees use more health care services in the first year, they use fewer services and require fewer marketing expenditures in subsequent years. Since HMOs count on you to help retain their members, they constantly survey your patients to learn how you are doing, how convenient and accessible your practice is, how concerned and communicative you are, and whether your patients would recommend you to others. The physician-patient relationship is critical to managed care organizations. Many pay providers more for high levels of patient satisfaction, and some offer seminars and workshops to help doctors improve communication and interaction with patients.

While patient satisfaction doesn't guarantee loyalty -- to you or the health plan -- it's a leading indicator. Since health plans can't afford to have dissatisfied members any more than they can afford unhealthy members, they're taking steps to help physicians and practices improve their patient care quality, service and relationships. You'll read about some of these efforts in the following chapters, such as PacifiCare's Art of Caring program and the Cleveland Clinic's World Class Service Excellence effort.

You'll discover, we hope, what Marc Lato and many other doctors with winning practices have: that treating every patient every day as you would your mother, father, son or daughter is good old-fashioned medicine that makes as much sense today as it did in the "good old days." It matters not who pays the bill, whether reimbursement is capitated or discounted fee for service, whether the patient is old or new, educated or ignorant, affable or irritating. It's just plain good medicine when everyone in the practice does their utmost to be accessible, provide superior clinical care and foster mutual trust and respect.
Click here for more information

Return to Table of Contents

Return To Top

Expertise|Who Are We|Resource Center
Products|Keep Me Posted|Contact Us|Home

E-mail us: administrator@hsmgroup.com

8777 E. Via de Ventura #188, Scottsdale, AZ 85258
Phone: 800-776-8078 or 480-947-8078
Fax: 480-481-0747

Copyright © 2005 The HSM Group, Ltd. All rights reserved.