Luxury sheets. Wood floors and marble bathtubs. Maid service and gourmet meals. These are upgrades that you might be looking for at a five-star hotel or spa…but what about at a hospital?
New research from Boston University’s School of Hospitality Administration (SHA) shows that consumers are willing to spend 38% more for a hospital room if it has “the right kind of hotel-quality upgrades,” such as interior design, hospitality-trained staff, and technology upgrades (see Checking Into Hotel Hospital: Patients Willing To Pay More For Rooms With Five-Star Amenities). The study surveyed 400 people who have been in a hospital in the previous six months, and asked which kinds of 18 different amenities they liked most. And the longer patients spent in the hospital, the more they were willing to pay for these amenities – the consumers who rated themselves as sicker were willing to pay 44% more.
Why do amenities matter so much to consumers? Beyond the simple fact that consumers want a more comfortable, convenient experience when using health care services, a 2010 perspective piece in The New England Journal of Medicine, The Emerging Importance of Patient Amenities in Hospital Care, noted that “amenities” are the aspect of health care that consumers can most easily understand:
Perhaps patients simply don’t understand clinical quality. Data on clinical quality are complex, multidimensional, and noisy, and they have only recently become systematically available to consumers. Consumers may be making choices on the basis of amenities because they are easier to understand.
For some perspectives on this issue of health care amenities, I reached out to some of my colleagues who had varying perspectives on this consumer “trend” – some who thought that this marks a big shift for health care provider organizations, and others who felt that this is old news with a new focus. To this point, my colleague Jamie Stewart noted that this focus on amenities over and beyond insurance reimbursement is a practice already well established in health care. Specifically, it’s something hospitals have been doing in maternity – and now is being extended to other areas of service. He writes:
Is this really new? If I think back to when my son was born in 1993, the big move in hospital Labor and Delivery was to move to a “upscale” labor, delivery, and postpartum stay for the mother, where the mother and child never moved and the furniture was more upscale, etc. Patients paid extra (over insurance reimbursement) for access to this style of labor and delivery. It seems to me that this is just an expansion on that model.
In the other camp, my colleagues noted that this marks a shift in the way we think about consumers in health care. OPEN MINDS advisory board member Paul Block Ph.D. made the observation that people pay for upgrades all the time – in telephones, cars, flights, hotel rooms, concert tickets, etc. And that health care execs need to acknowledge that. He writes:
If people are willing to pay $560 instead of $220 (>250%, or 150% extra) for a round trip, 2.5 hour flight from New York City to Chicago, it’s not surprising that people with the money are willing to pay for comfort when they’re feeling bad, worried about outcomes, want distraction from their physical and psychological discomfort, and want everything they can to contribute to their recovery.
OPEN MINDS senior associate Howard Shiffman observed that when it comes to improving the customer experience, it isn’t only about luxuries and upgrades:
This is something that we all need to pay attention to. I have spent a good deal of time in hospitals caring for others and during some minor medical procedures. Customers want better service and upgraded environments. However, only select groups of consumers can afford upgrade luxuries, like first-class seating on planes. The same is true in health care. Many health and human service provider organizations have a majority of consumers on Medicaid. These people cannot afford to pay additional costs for hospitalizations. This means thinking about other ways to improve the customer experience. Organizations need to recognize that people aren’t only looking for luxury upgrades, they like the “little extras” too, such as good customer service and a nice environment. We should all do what we can to enhance customer service.
Howard Shiffman’s point about the “basic” customer experience in health and human services was also echoed by Dr. Block, who wrote:
For me, the bigger question is why hospitals don’t always do more of the easy, cheaper things that would improve patients’ subjective experience, given the distress involved with hospital level needs and treatments and the direct relationship to outcomes and costs of care. That’s environment, but also food, staff interactions, and similar amenities that the hospitality industry has discovered matter far beyond their cost.
This raises a key question – “why is the consumer experience in health care so bad?” My personal experience is that everything in health care is a “hassle” – to get an appointment, to find a comfortable chair in a waiting area, to get seen at the time of your appointment, to be spoken to like a “customer,” to get a returned phone call, to understand your lab results, to understand your bill. I could go on and on. But what we consider to be “upgrades” in health care are considered to be part of the “standard good consumer service” in hotels, in restaurants, and in retail stores.
We are seeing competition on the consumer experience start in health care. A recent survey, The New Front Door To Health Care, found that almost 80% of consumers who had visited a health and wellness clinic within a drug store, discount retail store, or grocery store within the past two years said the experience was the same or better than a traditional doctor’s office, while almost 30% said the experience was better or much better.
For executives in health care, it may seem a bit far-fetched to need to have a consumer experience that rivals Amazon (see Another Look At Consumer Sovereignty and Lessons From Walmart Vs. Amazon). But retail clinics, urgent care centers, concierge practices, and telehealth services are going to slowly but surely change the consumer expectation of what “reasonable” experience is in health care.
For more, join me on September 20 at The 2016 OPEN MINDS Executive Leadership Retreat, for the session “Reclaiming The Primary Care Consumer Experience & What It Means To Health & Human Service Organizations,” by Peter Anderson, M.D., President, Team Care Medicine & Co-Author of Lost and Found: A Consumer’s Guide to Healthcare.