Rewarding patients with loyalty points

At the end of 2013, every patient in the Primary Health Network, a group of federally qualified community health centers in Ohio and Pennsylvania, began receiving V.I.P. Loyalty Program cards in the mail. They looked similar to cards one might be given in a rewards program for an airline or grocery store. It was an effort led by now-retired CEO Jack Laeng to reduce incidents in which patients “failed to show” for primary-care, dental, gynecologic and other appointments. The rate of missed appointments was about 15% at the network's 45 locations in 2012.

The Affordable Care Act has put new emphasis on preventing chronic conditions—which account for more than 80% of U.S. healthcare costs—rather than treating them after the fact, which is something the provider network wanted to address.

So as patients checked in for preventive-care visits and other services in 2014, their V.I.P. cards were swiped for points that could be redeemed for merchandise such as T-shirts, tote bags and water bottles.

Primary Health is not the only organization trying this approach. A Michigan hospital touted that its “Very Important Patient” program includes free valet parking, a 10% pharmacy discount for items not covered by insurance, and a discount on hospital gift shop items.

But such loyalty programs are by no means widespread in healthcare, and some policy experts say more providers should try them. “It's definitely worth considering,” said Dr. Renuka Tipirneni, a member of the University of Michigan's Institute for Healthcare Policy and Innovation. In a recent editorial in JAMA, she and colleagues argued that loyalty programs can encourage patients to be more vigilant about their preventive-care needs.

They also said the programs can be particularly useful for accountable care organizations, which agree to coordinate the care for a population of patient and are rewarded financially for meeting quality and savings targets.

Indeed, patient loyalty is a bit of a challenge for the industry. Hospitals are increasingly hiring chief patient experience officers, or CXOs, to tackle the quality and safety barriers that reduce patient satisfaction.

Negative online reviews, high costs and long wait times were among the top reasons nearly 2,000 people said they would switch to a different primary-care provider, according to a 2015 survey on patient loyalty from the Advisory Board Co.

Between 2012 and 2013, there was a 38% turnover rate among beneficiaries going either from one Medicare ACO to another or to non-ACOs, according to a report evaluating Medicare's Pioneer ACO program.

Frequently switching clinicians can result in fragmented and poorly coordinated care, yet addressing the issue has not been easy. Loyalty programs might be one way to think outside of the box. And the concept is slowly generating interest among healthcare leaders.

The first year of the Primary Health Network V.I.P. program did not generate any change in the “failure-to- show rate,” said Rachel Reichart, the network's marketing and outreach manager. She said patients and staff liked the concept, but there were challenges.

Patients would forget to bring the cards to office visits. If they did, the staff would have to log on to a different Web portal to record the entry.

As a result, the Primary Health Network re-launched the program in January. Instead of mailing out V.I.P. cards, every patient will get a reward just for showing up. With the $8,500 budget, swag is bought in bulk and each patient can receive up to $50 worth per year. “The upfront cost is not high, considering the benefit we get ... helping patients take control of their health,” Reichart said. The provider network will continue to track the success of the program.

But she and others warned of pitfalls.

“It's an innovative but conceptually tricky proposition,” said Jason Wolf, president of the Beryl Institute, an organization focused on improving the patient experience. He noted the risk of falling out of compliance with the CMS' patient-marketing rules.

Also, Wolf said, loyalty programs won't help if more fundamental benefits aren't already in place. “Dropping a rewards program into an organization that is not focused on improving outcomes or making care affordable will not make a difference.” It's an “extra layer,” not a sole solution, he said.

Tipirneni agreed and warned against creating incentives that encourage overuse of low-value services or those that create inequitable access to care. It's not about increasing their number of visits, but rewarding patients for taking the appropriate steps to better their care. Adding fees should be avoided because that could create a tiered system where people with lesser means don't have the same access.

Still, Tipirneni lauds programs that take the initiative. The healthcare industry has been “stuck with the same paradigms,” she said. “We are in dire need of new innovations.”