Driving transformation in health care from the outside in

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.

Perhaps the only surprise in the current state of the health care industry is that it has taken so long to reach this point. In health care, many customers – patients – are becoming savvy shoppers. They are often faced with an increasing range of care choices, and they're benefiting from more information to guide those choices every day. According to Deloitte's 2015 Survey of US Health Care Consumers, 75 percent of customers are seeking a partnership with their providers to determine the most effective treatment decisions. One in three wants their provider to push them to be more active in researching and questioning their prescribed treatments.

Customers also increasingly want technology when it comes to their health care: According to our research, seven-in-10 customers are likely to use at least one of the technologies we surveyed them on (such as telemedicine and remote patient monitoring) for care. But we're still playing catch up to other industries: A whopping 72 percent of consumers are using mobile or online banking for personal finance. On the flip side, only 31 percent of consumers are paying medical bills online – a seemingly simple task, but if delivered in the right way, could be an opportunity to build brand and trust.

As a result of these shifts in customer demand, many health care providers are starting to ask some very important questions: How can we better integrate technology to provide end-to-end customer service and in a way that customers will actually benefit? And further, what does it take for our organization to be the first choice for consumers? As in other industries, for many, the answer is a superior customer experience – one that begins well before the consumer has to make a choice about care, not just at the moment care is first needed.

Creating a customer experience that begins before care is initiated is a stretch for most health care organizations today, many of which are still working to create a cohesive experience for consumers at the point of care. To make things even more interesting, many providers rely on contractors, who are delivering everything from scheduling to payments services to helping deliver the customer experience.

For the consumer, this could create a confusing brand experience: They have one type of experience in scheduling, another in care, a different one when making payments, and so on. One challenge for providers looking to be the first choice of consumers is to create a cohesive, coherent, and compelling brand experience that stretches from the time before a relationship is initiated all the way through to ongoing care and payments. In an environment in which many customers have more power than ever, this has never been more important. Starting considerations for making it happen can be found here.

Customer experience is critical in health care, and it's about time we move from playing catch up to the driver's seat.

David Betts is a principal in Deloitte Consulting LLP's Life Sciences and Health Care practice, and leads Deloitte's Customer Transformation initiatives for the health care providers sector. His work has focused on enhancing core operations in the revenue cycle, driving performance improvement through operating model transformation and growing the business through mergers & acquisitions all with an eye towards creating a more patient-centric, consumer-oriented delivery system.

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