In this episode, we’re pleased to welcome Tom Sullivan, Editor-in-Chief at League, to discuss the impact of technology and CX on healthcare.
Podcast (hfppodcast): Play in new window | Download
Subscribe: Stitcher | RSS | MoreLearn how to listen to The Hospital Finance Podcast® on your mobile device.
Highlights of this episode include:
- Why should healthcare executives trust technology and prioritize customer experience?
- The media
- Switching from a transactional to transformational delivery
- Financial impact
- How CX in healthcare affects the overall cost of care
Kelly Wisness: Hi, this is Kelly Wisness. Welcome back to the award-winning Hospital Finance Podcast. We’re pleased to welcome Tom Sullivan, editor-in-chief at League. As editor-in-chief at League, Tom leads the CX technology thought leadership initiatives, including a series of regular reports about broader healthcare issues, including advancing equity, addressing workforce challenges, and the state of healthcare CX 2023. He brings more than two decades of editing and journalism experience with a focus on healthcare and technology. Prior to this role, Tom served as EVP and editor-in-chief at Health Evolution. Before that, he was editor-in-chief at HIMSS, leading Healthcare IT News, Health Finance, and Moby Health News. In this episode, Tom will discuss the impact of technology and CX on healthcare. Thank you for joining us today, Tom.
Tom Sullivan: Thank you very much for having me, Kelly. Thrilled to be here.
Kelly: Well, awesome. Let’s jump in today. Why should healthcare executives trust technology and prioritize customer experience, or CX, by adopting a framework for operations like that of Netflix, Peloton, and Uber?
Tom: So, I kind of view this as a bit of a two-part question. And I’ll address the part about adopting a framework along the lines of Netflix, Peloton, and Uber first. But certainly, we have seen business cases emerging for transforming the consumer experiences that health plans and health systems offer to members and patients. There are also growth cases emerging for that. But there’s another one that’s really come up recently, which is called the survival case, which is executives don’t necessarily have a choice anymore in doing this. They really need to transform their CX to keep pace with competitors. Now, the survival case, that’s not my phrase. I stole it from Patrick Drewry of Change Healthcare. He’s the VP of patient experience there. And he said that on a recent Frost and Sullivan podcast that also featured one of our executives. And so the survival case persists because 80% of patients indicated that they would switch providers based on convenience factors. That’s according to data from NRC Health. And obviously, digitization of healthcare that’s broadly going on across the industry and specific to CX is major contributor to convenience factors.
What’s more kind of on the business side of it, Dane has found that a 5% increase in loyalty among consumers yields as much as 25% increases in profitability. So that’s where you can start to think about getting into the ROI of consumer experience. Now, I’ll take a breath here and address your question about trust. I’ll say, as somebody who spent a lot of time in the health IT realm and enterprise technology before that, executives must be very rigorous in choosing technologies and partners. That kind of goes without question. But the reason to trust technologies and the reason to seek out really appropriate partners is because they bring expertise that many hospitals don’t have. So, for instance, if you’re going to transform your consumer experience, you need expertise in healthcare, technology, and CX. So, I would recommend that executives seek out organizations that have those in order to be successful in that. Because obviously, there’s a lot at stake. As much as we don’t like to talk about it, healthcare is a business. People don’t often like to use that phrase. And investments in technology and elsewhere do carry certain risk. Those risks obviously include financial disaster, to a certain extent, depending upon how large the investment is. But also, the softer side of things but even more important is the reality that human lives are at stake. Healthcare is a human story, and executives have to be very rigorous about choosing technologies and partners because people’s lives are at stake.
Kelly: Yeah, no. Completely agree. And it certainly is a business especially today. And having worked at organizations like InfoWorld, HIMSS Media, Health Evolution, and now League, how do you think the media can best bring healthcare organizations and consumers to be more accepting of tech and healthcare since it’s integrated into so many parts of our lives already?
Tom: I think it comes down to context. And you mentioned HIMSS Media when I was there. It’s particularly with Healthcare IT News. I was a big proponent of the idea of not being complacent with this idea that healthcare as an industry is a technological laggard. Yes, we can all agree that in many ways, that’s true. But when we look to other industries, as we should, retail, banking, even the airlines, which is almost comical in a sense, there are lessons we can learn from them, but I think a lot of what gets lost is exactly how hard this work really is. And this takes me back all the way to June 2020. I’m sorry, not June 2020, June 2000. So, 23 years ago, I went to a press and analyst event on Microsoft’s campus. Bill Gates and Steve Ballmer showed off a number of some early prototype technologies that didn’t make it. They also announced the DotNet platform, the C Sharp programming language, and this concept that they gave the moniker Web Services. So the web service that they demonstrated that day was in conjunction with Starbucks and a credit card company. I believe it was Mastercard, but I’m not 100% positive. I just know it was one credit card company because this is going back 23 years here.
What this web service enabled a person to do is go to the Starbucks website, place an order for a cup of coffee. So, we’ll call this the Microsoft Starbucks Coffee Experience. It’s a play on the CX phrase here if you’ll let me get away with that. And what resulted was you placed your order much as we would today. And in placing that order, the technology would perform the magic behind the screen. So there would be an asynchronous message that called out to the credit card company and confirmed your payment. And the vision for it was that you could walk into the Starbucks, skip the line, pick up your coffee, and be on your way. So of course, I went home and I said, “I have to try this.” So, the next day, I ordered it. And ultimately, it was a worse experience than just showing up at Starbucks unannounced. The harsh reality is that they didn’t have the infrastructure. They didn’t have any ecosystem of innovation. So, you got there. The coffee wasn’t actually ready. You had to stand in line anyway. And in trying to go to the front of the line, because very few people knew that this even existed, they had just announced that the day before and it limited capacity, everybody thought I was just trying to cut the line. So, it was all in all a frustrating experience. And as I mentioned, they didn’t have the ecosystem. Today, we have the ecosystem for these things. The staff are trained. There’s a station where you can pick this stuff up, and you really can just walk in to the Starbucks, grab your coffee and be on your way. It’s already paid for.
That is something that we now take for granted, not just at Starbucks, but at almost all chains across the nation. But it was really hard to get there. This was, again, it was in 2000. So, there was no iPhone. There were no Android phones. There weren’t apps, APIs, and platforms. And I think the struggle to do this is where the media and also healthcare organizations themselves can provide the context. Again, this is really hard work. It needs to be done. It needs to be done now. And I’m not by any means suggesting that healthcare is in the year 2000. I think we’re much closer. We have apps. We have platforms. We have ecosystems to support this kind of consumer experience.
Kelly: Yeah, I agree. I think we have come a long way, especially since COVID, but there’s still a lot to do. But that’s great information. What benefits do provider organizations see by switching from a transactional to transformational delivery of CX like utilization and revenue, etc.?
Tom: Well, so the short list, Kelly, includes more consumers using more services more frequently to enable new sources of revenue. I mean, if you think about the vision of what if we can enable and inspire CX that people engage with every day instead of only when necessary? The possibilities there are almost limitless. I mean, McKinsey, for instance, refers to what you can do by transforming your consumer experience as unlocking value opportunities. And what that really means is that an organization that engages populations of people and can leverage the data within those populations of people is much more effectively positioned to expand market share, decrease costs, improve outcomes, and more.
Kelly: Great. Thank you. And what financial impact will the improved CX and personalization of healthcare experiences have on hospitals?
Tom: So given your focus on helping listeners protect and enhance the revenue they earn, CX transformation is really a critical step to both reducing and increasing revenue. Reducing costs and increasing revenue, I’m sorry. And we know for a fact that consumers want more personalized healthcare. 82% of survey participants indicated that they really want a digital platform for better access that’s according to payments. So the opportunity is to think about CX transformation on a population scale. It’s one thing to engage individuals individually, if you will, but when you have a population of engaged hospital patients or health plan members, that’s really where you can start to generate that data I mentioned before, and then analyze that to glean insights about how you can most effectively advance business objectives. Big picture here. Research by McKinsey & Company and Forrester shows the companies leading in CX personalization increased revenue by as much as 15%, and that improving CX by just one point can yield more than 1 billion in annual revenue. That’s obviously the largest of the large companies. But it’s a pretty telling statistic. So, the direct and near-term meaningful financial impact to the bottom line for hospitals is, again, reducing costs and increasing revenue.
Kelly: Yeah, no, that sounds very substantial. How can healthcare organizations approach strategic partnerships with tech companies to modernize their care delivery?
Tom: With caution, I say jokingly. I mean, as you know, Kelly, particularly on the technology side and in healthcare as well, there’s this age-old IT conundrum of build versus buy. And that is evolving toward a more modern build versus buy versus strategic partnership mindset. The best of these new partner models include shared risk, shared values, mission, and finances. And aligning with the right partners and doing so properly really enables executives and hospitals and health systems to innovate more quickly, accelerate the time it takes to build and deploy technologies, and to start earning a return on those investments. And one of the things that we’ve also seen that’s maybe a little bit less tangible, but no less important necessarily, is innovating more quickly and just simply moving faster to get to transform CX. A byproduct of that is that organizations can reduce the risk of longer-term IT development and deployment cycles. We’ve all seen these exciting groundbreaking pilot initiatives come out of the IT department, promised to change things, and then wither on the vine for various reasons. So, transforming the healthcare consumer experience requires partnerships that combine expertise in healthcare tech and CX, as I said earlier, and having all three of those is rare for hospitals.
Kelly: Agreed. And so how does improved CX in healthcare affect the overall cost of care now or looking ahead?
Tom: So, I think there are two distinct aspects to this question. The now and the looking ahead. In the here and now, there are immediate opportunities to drive personalization that enables people to access care services more frequently than once or maybe twice a year and increase associated revenues with those services. Improved CX can also make it more convenient and drive down costs of care. And I’m thinking this really on the patient side. So, if somebody has to travel 100 miles to get care, that’s a financial burden even if they don’t have to take off work. And many people do have to take off work to travel that. And I say 100 miles, but it could be a mile if you have to take off work or pay someone to take care of loved ones. And those are just some kind of basic examples of how it can reduce the cost for patients. Now, looking ahead, the industry is moving more toward value-based care and payment arrangements. And we’ve certainly seen, in the last three years, distinct financial advantages for not being wholly reliant on fee for service. But succeeding with value-based care and shared risk, that’s going to require data to understand your patient populations. Organizations need to be able to analyze large sets of population level data in order to identify needs and opportunities to deliver care more efficiently with better CX to drive costs down and realize the benefits of those risk-based contracts. To collect that data, they need to have engaged consumers in the first place.
Kelly: Completely agree. Well, Tom, thank you so much for joining us today and for sharing all of this really great valuable information.
Tom: Thank you for having me, Kelly. This was great.
Kelly: Yeah, and if listeners want to contact you to learn more or discuss this topic, how best can they do that?
Tom: I’m always available on LinkedIn, on Twitter at SullyHIT, S-U-L-L-Y-H-I-T, and email@example.com.
Kelly: Awesome. Well, thank you so much for that. And thank you all for joining us for this episode of The Hospital Finance Podcast. Until next time…
[music] This concludes today’s episode of the Hospital Finance Podcast. For show notes and additional resources to help you protect and enhance revenue at your hospital, visit besler.com/podcasts. The Hospital Finance Podcast is a production of BESLER | SMART ABOUT REVENUE, TENACIOUS ABOUT RESULTS.
If you have a topic that you’d like us to discuss on the Hospital Finance podcast or if you’d like to be a guest, drop us a line at firstname.lastname@example.org.