We've seen this before—spurred on by technology advances and changing market conditions, customers can gain the upper hand in their relationship with industry. Empowered to choose where and how they transact business, customers often begin to drive transformation from the outside in. Meanwhile, as some industry players struggle to make sense of their customers' power, many are forced to respond either to competitors who reacted more quickly or to new entrants who fundamentally change the game.
Consider the financial services industry. Many financial services companies have been disrupted by customers who have effectively wrestled power away from retail bankers. From checking and savings to investment management and mortgage banking, much is driven by the customer these days. Those who acknowledged this shift early and responded accordingly were able to take the lead, sparking a wave of innovation that swept through the industry in a remarkably short period of time.
We believe the health care industry is on the cusp of a similar wave of innovation today. Health care organizations that are able to fundamentally reimagine the relationships they have with their customers – those who can design the experiences customers want and need – could be the ones who allow their customers to take ownership of the relationship. And, according to Deloitte Center for Health Solutions (DCHS) research, they could reap the benefits from a financial perspective, too. When DCHS analyzed Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) scores and examined their association with hospital performance measures such as net and operating margins and return on assets (ROA), researchers found that hospitals with high patient-reported experience scores have higher profitability. Further, the research suggests that the association of patient experience with financial performance is large, even after controlling for other hospital characteristics that can drive hospital performance.
This shift will likely take large-scale transformation. But, it is likely to pay off – both from a financial and brand perspective. And, if it is done in a thoughtful, customer-centric manner, it may drive the next wave of innovation this industry needs.