The Impact of Service Recovery on Patient Satisfaction and Return on Investment
TITLE: The impact of Service Recovery on Patient Satisfaction and Return on Investment
SEARCH TERMS USED: Service recovery and patient satisfaction; Service Recovery and Risk Management; Patient retention and cost
SUMMARY OF FINDINGS:
The concept of service recovery involves the service provider taking responsive action to "recover" lost or dissatisfied customers, to alter their negative perceptions, convert them into satisfied customers, and to ultimately maintain a business relationship with them. 1, 10
Service recovery has proven to be cost-effective in other service industries. Health care organizations can become more customer-oriented by taking advantage of the information provided by patient complaints, increasing patient satisfaction and retention in the process.1
Understanding patients' specific dissatisfactions may help health professionals and administrators identify and rectify organizational deficiencies before they become costly. If all are involved in both prevention and problem solving, resources devoted to uncovering, understanding, and resolving patient complaints are likely to prove cost-effective.3
Traditionally, health care patients have been treated by health care professionals as people with needs rather than as customers with options. Although managed care has restricted patient choice, choice has not been eliminated. Patients are primary health care consumers. A customer retention program can help health care organizations change their culture for the better, which may lead to higher customer retention levels and increased revenues. Customer retention programs based on service excellence that empower employees to provide excellent care can eventually lead to a larger market share for health care organizations trying to survive this era of intense competition. 14
In the healthcare industry, for every 100 customers that experienced deficient service, about 70 customers would be unlikely to patronize the same organization again. In addition, for the same 100 customers who have experienced deficient service, about 75 of them will go on to tell on average nine family members and friends about their experiences. Through word of mouth from these 75 dissatisfied customers, there will eventually be about 465 persons who might have been potential customers but will probably not patronize the organization. 20
As companies reduce customer defection rates, profits rise sharply. 17
The importance of service recovery lies in the financial implications of poor customer retention. Retaining the customer is a more desirable outcome than losing the customer and then trying to obtain another. The benefit of retaining the customer increases over time and therefore, the cost of losing a customer represents significant lost potential. By reducing customer defections by 5%, profits can be boosted by 30%-85% (across different service industries) over the average customer life. 17
CITATIONS:
1: Jt Comm J Qual Improv. 2001 May;27(5):278-86.
The role of complaint management in the service recovery process.
Bendall-Lyon D, Powers TL.
Alabama Quality Assurance Foundation, Birmingham, USA.
BACKGROUND: Patient satisfaction and retention can be influenced by the development of an effective service recovery program that can identify complaints and remedy failure points in the service system. Patient complaints provide organizations with an opportunity to resolve unsatisfactory situations and to track complaint data for quality improvement purposes. SERVICE RECOVERY: Service recovery is an important and effective customer retention tool. One way an organization can ensure repeat business is by developing a strong customer service program that includes service recovery as an essential component. The concept of service recovery involves the service provider taking responsive action to "recover" lost or dissatisfied customers and convert them into satisfied customers. Service recovery has proven to be cost-effective in other service industries. THE COMPLAINT MANAGEMENT PROCESS: The complaint management process involves six steps that organizations can use to influence effective service recovery: (1) encourage complaints as a quality improvement tool; (2) establish a team of representatives to handle complaints; (3) resolve customer problems quickly and effectively; (4) develop a complaint database; (5) commit to identifying failure points in the service system; and (6) track trends and use information to improve service processes. SUMMARY AND CONCLUSIONS: Customer retention is enhanced when an organization can reclaim disgruntled patients through the development of effective service recovery programs. Health care organizations can become more customer oriented by taking advantage of the information provided by patient complaints, increasing patient satisfaction and retention in the process.
2: Jt Comm J Qual Improv. 2000 Apr;26(4):217-26.
Developing a patient complaint tracking system to improve performance.
Allen LW, Creer E, Leggitt M.
Hartford Hospital, Connecticut 06102, USA. Lallen@harthosp.org
BACKGROUND: Assessing patient satisfaction exclusively through close-ended scaled survey questions may not provide a complete picture of patients' concerns. Only recently has the role of complaint data as a management tool received attention. FORMATION OF THE TEAM AND THE DATABASE: The Complaint Management Team was created in January 1997 at Hartford Hospital (Conn) to develop a coding and reporting mechanism for complaints (negative comments) gathered from patient surveys. Developing the codebook was an evolutionary process. A database was designed to collect three separate complaints and the verbatim text associated with the code. REPORTING: Department-specific, location-specific, and organization wide reports are generated. Quarterly department-specific reports are used to trend the incidence of complaint themes, identify specific locations with problems, and initiate improvement efforts. OVERALL FINDINGS: Since March 1997, most complaints have fallen into five major categories--accommodations (environment), quality of care (care and treatment), respect and caring (humaneness or attitudes and behaviors), timeliness, and communication. The hospital's real estate department has completed a project focused on increasing patient satisfaction with parking. Two projects are still in progress; one is focused on increasing patient satisfaction with respect and staff caring attitude/behaviors, and one on improving satisfaction with the level of noise on the units. DISCUSSION: Approximately 4,000 survey complaints are coded every year. One limitation of the database is that all sources of complaints received throughout the organization are not yet captured. Another limitation is that the outcomes measurement section has exclusive access to the database. CONCLUSIONS: The patient complaint tracking system enables staff, managers, teams, and departments to develop improvement efforts based on quantitative and qualitative data.
3: Jt Comm J Qual Improv. 1998 Jun;24(6):303-12.
What health professionals can do to identify and resolve patient dissatisfaction.
Pichert JW, Miller CS, Hollo AH, Gauld-Jaeger J, Federspiel CF, Hickson GB.
Department of Medicine, Vanderbilt University Medical Center, Nashville, TN 37232-1229, USA. Jim.Pichert@mcmail.vanderbilt.edu
BACKGROUND: Patient satisfaction affects consistency of self-care, health outcomes, level of service utilization, choice of health professionals, and decisions to sue in the face of adverse outcomes. Understanding patients' specific dissatisfactions may help health professionals and administrators identify and rectify organizational deficiencies before they become costly. COMMON CAUSES OF COMPLAINTS: As part of a series of research projects, more than 12,000 patient/family complaint narratives were examined in which patients or patients' family members told interviewers or patient advocates about the care they received from their health professionals in both inpatient and outpatient settings. Complaints may be categorized as involving issues of care and treatment, communication, humaneness, access and availability, environment, and billing/payment. STRATEGIES FOR RESOLVING COMPLAINTS: Even though caregivers may not have control over all the factors that lead to dissatisfaction, they can often hear and address complaints. As a result, they may not only contribute to quality of care but improve the systems in which they practice. The challenges are how to prevent dissatisfaction in the first place, and, if it does occur, to identify and if possible rectify patient concerns. Three case studies are provided. CONCLUSION: All health professionals must be involved in efforts to resolve problems that compromise patient care. Some problems could be prevented if administrators and leaders used complaint data to recommend new policies and procedures or to identify and counsel with health care team members who generate disproportionate numbers of complaints. If all are involved in both prevention and problem solving, resources devoted to uncovering, understanding, and resolving patient complaints are likely to prove cost-effective.
4: Emerg Med (Fremantle). 2002 Mar;14(1):43-9.
Comment in:
Emerg Med (Fremantle). 2002 Mar;14(1):9-11.
Complaints from emergency department patients largely result from treatment and communication problems.
Taylor DM, Wolfe R, Cameron PA.
Emergency Department, Royal Melbourne Hospital Monash University, Victoria, Australia. david.taylor@mh.org.au
OBJECTIVE: Emergency department patient complaints are often justified and may lead to apology, remedial action or compensation. The aim of the present study was to analyse emergency department patient complaints in order to identify procedures or practices that require change and to make recommendations for intervention strategies aimed at decreasing complaint rates. METHODS: We undertook a retrospective analysis of patient complaints from 36 Victorian emergency departments during a 61 month period. Data were obtained from the Health Complaint Information Program (Health Services Commissioner). RESULTS: In all, 2,419 emergency department patients complained about a total of 3,418 separate issues (15.4% of all issues from all hospital departments). Of these, 1,157 complaints (47.80%) were received by telephone and 829 (34.3%) were received by letter; 1,526 (63.1 %) complaints were made by a person other than the patient. Highest complaint rates were received from patients who were female, born in non-English-speaking countries and very young or very old. One thousand one hundred and forty-one issues (33.4%) related to patient treatment, including inadequate treatment (329 issues) and inadequate diagnosis (249 issues); 1079 (31.6%) issues related to communication, including poor staff attitude, discourtesy and rudeness (444 issues); 407 (11.9%) issues related to delay in treatment. Overall, 2516 issues (73.6%) were resolved satisfactorily, usually by explanation or apology. Only 59 issues (1.7%) resulted in a procedure or policy change. Remedial action was taken in 109 issues (3.2%) and compensation was paid to eight patients. CONCLUSIONS: Communication remains a significant factor in emergency department patient dissatisfaction. While patient complaints have resulted in major changes to policy and procedure, research and intervention strategies into communication problems are indicated. In the short term, focused staff training is recommended.
5: Jt Comm J Qual Improv. 1995 Mar;21(3):133-42.
Ombudsmen, patient complaints, and total quality management: an examination of fit.
Ziegenfuss JT Jr, O'Rourke P.
Pennsylvania State University-Harrisburg, School of Public Affairs, USA.
BACKGROUND: In response to mounting health care costs in the United States and Canada, there is considerable national discussion of health care quality, including the importance of assessing and monitoring patient satisfaction and of responding to complaints. Many physicians and health care administrators cringe at the mention of using patient complaints and satisfaction levels as quality measures; others perceive the need to develop multiple source indicators of patient care. At the same time, leaders are seeking programs and methods that contribute to the continuous improvement of all aspects of health care organizations. DISCUSSION: The use of patient ombudsmen and patient complaints in quality management programs is reviewed and the relation between the two functions--ombudsmen/complaint handling and total quality management--is discussed. Purposes, objectives, problem-solving processes, program operations, data use, and the outcomes of ombudsmen efforts are reviewed. Since ombudsmen programs value patient feedback, empower customers, and help contribute to the diagnosis of organizational areas for improvement, they are consistent with the intent and workings of quality teams. The activities of ombudsmen can contribute to the broader effort to manage the whole organization toward the continuous improvement of quality.
6: MGMA Connex. 2004 Mar;4(3):42-7.
Big problem, many people, one goal. Improving patient financial services performance.
Weis SA, Cecala KK, Scheele KL.
Mayo Clinic in Scottsdale, Ariz., USA. weis.shirley@mayo.edu
A multispecialty organization, faced with growing patient complaints about its billing services, developed a large-scale plan to make the billing process more effective and efficient--a service recovery program. Strong organizational support, leadership commitment and vision, thorough planning and follow-through, and dedicated staff drove the project to surpass expectations.
7: Jt Comm J Qual Improv. 2002 Nov;28(11):605-13.
The Patient Visits Program: a strategy to highlight patient satisfaction and refocus organizational culture.
Sidhu M, Berg K, Endicott C, Santulli W, Salem D.
Tufts University School of Medicine, Boston, USA.
BACKGROUND: Seeking patient input may improve patients' perceptions of the quality of care and provide managers with helpful information for strategic decision making. In addition, the involvement of senior hospital leadership is critical to successful implementation of quality improvement initiatives and illustrates an organization's commitment to enhancing quality from the top down. IMPLEMENTING THE PVP: Senior management's Patient Visits Program (PVP) at Tufts-New England Medical Center is a structured, ongoing initiative in which senior clinicians are paired with nonclinician administrators. During an initial evaluation period (Aug 1999-Feb 2001), PVP teams visited with patients and their families on a monthly basis to talk to them about their experiences. Patient suggestions were then evaluated and acted on. DISCUSSION: The PVP has been beneficial for patients and for the hospital team members--clinicians and nonclinicians alike--who participated in the patient interviews. The PVP may serve as a mechanism to enhance organizational awareness of the importance of patient satisfaction. The program provides opportunities for immediate service recovery, and faster, broader-reaching responses to quality complaints due to the multispecialty nature of the PVP teams. In addition, based on early available data, the PVP shows promise as an interventional strategy to improve patient satisfaction scores. CONCLUSIONS: A structured, ongoing program such as the PVP is an effective strategy to highlight the value of patient satisfaction, refocus organizational culture, and generate specific suggestions for improving the quality of patient care.
8: Qual Manag Health Care. 1999 Summer;7(4):32-50.
Nature and determinants of customer expectations of service recovery in health care.
Dasu S, Rao J.
University of Southern California, Los Angeles, USA.
Service recovery refers to the service provider's response to a dissatisfied customer. This article proposes a model of customer expectations of service recovery in health care services. The model discusses two types of service recovery expectations: will and should. An exploratory study indicates that industry reputation and personal experiences drive customers' "will-expectations" of service recovery while "should-expectations" can be explained via norm, fairness, social contract and hospitality theories.
9: Holist Nurs Pract. 1997 Jul;11(4):27-34.
Achieving patient satisfaction: resolving patient complaints.
Oxler KF.
Department of Nursing, Thomas Jefferson University Hospital, Philadelphia, Pennsylvania, USA.
Patients demand to be active participants on and partners with the health care team to design their care regimen. Patients bring unique perceptions and expectations and use these to evaluate service quality and satisfaction. If customer satisfaction is not achieved and a patient complaint results, staff must have the skills to respond and launch a service recovery program. Service recovery, when done with style and panache, can retain loyal customers. Achieving patient satisfaction and resolving patient complaints require commitment from top leadership and commitment from providers to dedicate the time to understand their patients' needs.
10: Hosp Health Serv Adm. 1993 Spring;38(1):3-21.
Service recovery in health services organizations.
Schweikhart SB, Strasser S, Kennedy MR.
Division of Hospital and Health Services Administration, Ohio State University, Columbus 43210.
Service recovery is defined as that part of quality management designed to alter the negative perceptions of dissatisfied consumers and to ultimately maintain a business relationship with these consumers. This article explores the theoretical and operational implications of service recovery in health services organizations. A framework that defines the range of possible service recovery actions is presented. Next, the benefits of and obstacles to service recovery in health services firms are discussed, and solutions for overcoming these obstacles are presented. Finally, the critical components of an effective service recovery program are described, and an agenda for empirical research on the efficacy of service recovery activities is proposed.
11: Patient Focus Care Satisf. 1999 Feb;7(2):13-5.
Service recovery doesn't mean showering unhappy patients with gifts.
[No authors listed]
PMID: 10346196 [PubMed - indexed for MEDLINE]
12: J Manag Med. 1996;10(3):39-48.
Patients' complaints as a management tool for continuous quality improvement.
Javetz R, Stern Z.
Hadassah-Hebrew University Medical Center, Jerusalem, Israel.
Continuous quality improvement focuses on the customer and, therefore, requires attention to customers' feedback as a vital input. Customers' feedback in general hospitals includes utilization statistics of various services, patient satisfaction surveys and patients' complaints. The role of complaint data as a management tool, and particularly as applied to quality improvement, has received little attention in the literature. As a quality control tool, complaints are investigated on the individual, unit and organizational levels. Repeated complaints about the same units, procedures or individuals, are especially important for quality review. The role of the hospital administration is to draw on the human, technological and procedural resources at its disposal, along a solution time interval (immediate, short and long term), in designing its policy for quality improvement. Presents three examples of policy changes. The aggregate of complaint data serves, in addition, for follow-up of the effect of changes introduced by policy decisions.
13: J Healthc Manag. 2007 Mar-Apr;52(2):109-24; discussion 124-5.
Links among high-performance work environment, service quality, and customer satisfaction: an extension to the healthcare sector.
Scotti DJ, Harmon J, Behson SJ.
Fairleigh Dickinson University, New Jersey, USA. prof_djs@fdu.edu
Healthcare managers must deliver high-quality patient services that generate highly satisfied and loyal customers. In this article, we examine how a high-involvement approach to the work environment of healthcare employees may lead to exceptional service quality, satisfied patients, and ultimately to loyal customers. Specifically, we investigate the chain of events through which high-performance work systems (HPWS) and customer orientation influence employee and customer perceptions of service quality and patient satisfaction in a national sample of 113 Veterans Health Administration ambulatory care centers. We present a conceptual model for linking work environment to customer satisfaction and test this model using structural equations modeling. The results suggest that (1) HPWS is linked to employee perceptions of their ability to deliver high-quality customer service, both directly and through their perceptions of customer orientation; (2) employee perceptions of customer service are linked to customer perceptions of high-quality service; and (3) perceived service quality is linked with customer satisfaction. Theoretical and practical implications of our findings, including suggestions of how healthcare managers can implement changes to their work environments, are discussed.
14: J Med Pract Manage. 2001 Jul-Aug;17(1):11-4.
Costs and prevention of patient defection.
Clarke RN.
Boston University Health Care Management Program, 595 Commonwealth Avenue, Boston, MA 02215, USA. rclarke@bu.edu
Although other industries have recognized that increased customer loyalty brings increased revenues and profitability, few medical practices have sought even to measure patient retention or loyalty. When patients leave a practice, new patients must be attracted to replace lost ones at significant cost, often invisible to and underestimated by physicians. Understanding the lifetime value of a patient may be one route that leads to better patient loyalty practices and enhanced profitability.
PMID: 11521530 [PubMed - indexed for MEDLINE]
15: J Med Pract Manage. 2002 Jan-Feb;17(4):183-6.
Measuring patient loss.
Clarke RN.
Boston University Health Care Management Program, 595 Commonwealth Avenue, Boston, MA 02215, USA. rclarke@bu.edu
Few medical practices collect patient loss data. Yet patient defection has an enormous impact on practice profitability. Not only is the information on patient defection painful to analyze, but also difficult to capture. Patient requests for transfer of medical records are an insufficient measure of patient loss. Billing services are the likeliest source of patient loss data, but they have varying capabilities to provide this information, the information is often flawed, and each time a practice switches to a new billing service, it loses the ability to produce patient retention and defection data for a period of time. The previous article in this series detailed the costs of defection of patients to medical practice profitability together with methods to help retain patients. However, most practices do not or cannot quantify patient loss. This article concentrates on the problems of tracking defections and offers a possible solution through a focus on the data provided by billing systems.
PMID: 11873444 [PubMed - indexed for MEDLINE]
16: Mark Health Serv. 1997 Fall;17(3):19-21.
Erratum in:
Mark Health Serv 1997 Winter;17(4):3.
Retaining customers in a managed care market. Hospitals must understand the connection between patient satisfaction, loyalty, retention, and revenue.
Gemme EM.
Traditionally, health care patients have been treated by health care professionals as people with needs rather than as customers with options. Although managed care has restricted patient choice, choice has not been eliminated. The premise of this article is that patients are primary health care consumers. Adopting such a premise and developing an active customer retention program can help health care organizations change their culture for the better, which may lead to higher customer retention levels and increased revenues. Customer retention programs based on service excellence that empower employees to provide excellent care can eventually lead to a larger market share for health care organizations trying to survive this era of intense competition.
17: Harv Bus Rev. 1990 Sep-Oct;68(5):105-11.
Zero defections: quality comes to services.
Reichheld FF, Sasser WE Jr.
Companies that want to improve their service quality should take a cue from manufacturing and focus on their own kind of scrap heap: customers who won't come back. Because that scrap heap can be every bit as costly as broken parts and misfit components, service company managers should strive to reduce it. They should aim for "zero defections"--keeping every customer they can profitably serve. As companies reduce customer defection rates, amazing things happen to their financials. Although the magnitude of the change varies by company and industry, the pattern holds: profits rise sharply. Reducing the defection rate just 5% generates 85% more profits in one bank's branch system, 50% more in an insurance brokerage, and 30% more in an auto-service chain. And when MBNA America, a Delaware-based credit card company, cut its 10% defection rate in half, profits rose a whopping 125%. But defection rates are not just a measure of service quality; they are also a guide for achieving it. By listening to the reasons why customers defect, managers learn exactly where the company is falling short and where to direct their resources. Staples, the stationery supplies retailer, uses feedback from customers to pinpoint products that are priced too high. That way, the company avoids expensive broad-brush promotions that pitch everything to everyone. Like any important change, managing for zero defections requires training and reinforcement. Great-West Life Assurance Company pays a 50% premium to group health-insurance brokers that hit customer-retention targets, and MBNA America gives bonuses to departments that hit theirs.
PMID: 10107082 [PubMed - indexed for MEDLINE]
18: J Hosp Mark Public Relations. 2006;16(1-2):3-14.
Hospital service recovery.
Gutbezahl C, Haan P.
Tri-Vista Health Care Group, Cincinnati, OH, USA.
An organization's ability to correct service errors is an important factor in achieving success in today's service economy. This paper examines service recovery in hospitals in the U.S. First is a general review of service recovery theories. Next is a discussion of specific service issues related to the hospital environment. The literature on service recovery is used to make specific recommendations to hospitals for ways to improve their ability to remedy service errors when they occur. Suggestions for future research in the field of service recovery are also made.
PMID: 17194683 [PubMed - indexed for MEDLINE]
19: Hosp Peer Rev. 2001 Dec;26(12):167-8.
Poor customer service has significant impact on bottom-line results.
[No authors listed]
PMID: 11759483 [PubMed - indexed for MEDLINE]
20: The TQM Magazine. 2006, Vol. 18, Issue 6, Page 563-571
Pui-Mun Lee, PohWah Khong, Dhanjoo N. Ghista
Emerald Group Publishing Limited
Impact of deficient healthcare service quality
Abstract:
Purpose – This paper seeks to look at healthcare service quality from the viewpoint of its negative impact on the industry when there is a deficiency in the delivery of service quality. To measure this impact, the potential loss of customers due to poor quality service is measured. A potential customer loss model is proposed. To address the competitive and financially driven healthcare delivery business, a three-pillar approach, termed the Excellent Healthcare Service Model (EHSM), is introduced. This approach advocates that the healthcare industry should use a system view to deliver quality healthcare by taking into account quality, cost, and efficiency factors in a holistic manner.
Design/methodology/approach – In this paper a survey questionnaire was used to gather data necessary to compute impact of deficient healthcare service. The questionnaire was administered to a sample of 400 people and the survey method used was intercept interview. Customer loss and potential customer loss due to deficient service were computed.
Findings – In this paper, findings from the research indicated that, in the healthcare industry, for every 100 customers that experienced deficient service, about 70 customers would be unlikely to patronize the same organization again. In addition, for the same 100 customers who have experienced deficient service, about 75 of them will go on to tell on average nine family members and friends about their experiences. Through word of mouth from these 75 dissatisfied customers, there will eventually be about 465 persons who might have been potential customers but will probably not patronize the organization at all based on what the dissatisfied customers have told them.
Practical implications – The ideas presented in this paper provide a new way of looking at service quality performance, through the impact of deficient service. With this knowledge, economic impacts of poor service quality could easily be quantified, and such economic-based results are usually a better motivator for managers and workers to deploy quality improvement initiatives.
Originality/value – The results and ideas presented in this paper are valuable for the healthcare industry. It provides an alternative approach to quantify service quality performance. The paper also proposes a system-based approach to enhance service process performance.
Keywords: Customer satisfaction, Customer services quality, Singapore
Article Type: Research paper
Article URL:
http://www.emeraldinsight.com/10.1108/09544780610707075
