Note to Healthcare Providers: Improve Service or Your Customers May Walk

NEW YORK (Business Wire EON) November 7, 2007 -- Best-in-class retailers and other consumer-facing businesses have proven that stand-out, empathetic customer service differentiates and leads to competitive advantage and incremental profits. Providers and payers in the healthcare industry may be on the cusp of learning that same lesson - the hard way, according to new research by Katzenbach Partners, a management consulting firm focused on helping large companies improve organizational performance.

The vast majority of Americans - 84% - have been in a hospital or clinic over the past three years, half (50%) as a patient and more than half (60%) to visit a relative or friend. While most of these people - about 73% - were satisfied, a quarter had negative experiences with personnel.

-- Nearly a third of visitors (32%) and nearly a quarter of patients (23%) said healthcare employees did not do a good job of making them feel like their individual needs were understood.

-- One in four said healthcare personnel did a sub-par job providing helpful information.

-- 24% said the hospital or clinic failed to create a positive, caring environment.

That's according to a random-digit-dial survey of more than 1,000 Americans fielded last month by Katzenbach Partners. The firm conducted the poll as part of its ongoing "Empathy Engine" research, which investigates why and how some organizations succeed, and others fail, based on customer service, one of the few frontiers of competitive advantage in an increasingly commoditized business environment.

Do Healthcare Workers Care About What They Do? Many Americans say, "No."

Based on their experiences, more than one in three Americans (36%) say hospital and clinic workers are either indifferent (22%) about or unhappy (14%) with their jobs. In fact, patients and visitors with the most recent experiences are more apt to say staff is indifferent.

An Alarm Bell for the Healthcare Industry

"The research shows that Americans are focused not only on the quality of medical care, but also on having their individual needs truly understood. Based on our research, hospitals, clinics and doctors' offices don't seem to be doing a good job of responding," said Traci Entel, the Katzenbach Partners principal spearheading the Empathy Engine research, and author of a study, "The Empathy Engine: Turning Customer Service Into a Sustainable Advantage."

Added Jenny Machida, who leads Katzenbach Partners' healthcare practice,"Good medicine is only one dimension of success in the healthcare industry. Real empathy for patients and customers matters a great deal. Though providers and payers sometimes forget it, people do have a choice, and can walk. There are seismic shifts happening in the healthcare industry, and one of the most important is this: People are spending their healthcare dollars where they think they will receive not only great medical care, but also truly individualized service."

Caring, Empathetic Service is Key to Patients' Choice of Provider - and Decision to Switch

Assuming equal quality of care and insurance acceptance, most Americans - 52% - say they choose hospitals and clinics based on whether they believe employees understand their needs. Only one in five Americans (20%) choose based on convenience to their homes.

Further reinforcing that healthcare isn't as much of a seller's market as many may believe, about one in four Americans has switched or considered switching doctors (26%) and switched or considered switching hospitals or clinics (23%) because of negative experiences. (13% have switched doctors, and another 13% have considered it; 10% have gone to a different hospital or clinic; 13% have considered it.)

In the same vein, nearly one in four Americans say bad experiences have prompted them to use (12%), or think about using (12%), walk-in centers to avoid hospitals, clinics or doctors offices.

Many Americans Say They Get Better Customer Service From Banks and Even Airlines Than Healthcare Providers

When consumers compare customer service from a range of consumer-facing industries, hospitals and clinics don't rate well.

-- Not surprisingly, most people (51%) say hotels are better at customer service than healthcare providers.

-- 40% say banks are better than hospitals and clinics at serving their patrons.

-- 27% say big national retailers and chain restaurants are better at customer service.

-- 18% say that even airlines are better at customer service than hospitals and clinics.

Healthcare Organizations Can Improve Service by Supporting Their Frontline Staff and Using the Power of the Informal Organization

Katzenbach Partners believes there are steps healthcare players can take to get them closer to being "Empathy Engines" and to help them transform the quality of customer service. Healthcare players should:

-- Support their frontline staff. Customer service improves when customer-facing employees feel empowered to make decisions and improvise processes in order to meet customer needs. Redesigning traditional patient service roles will help improve the patient experience and the level of employee engagement as well.

-- Recognize and use the power of the "informal organization." The informal organization is the network of relationships and centers of knowledge that exist in every workplace, alongside but separate from the formal organizational structure. Healthcare providers need to nurture those informal networks - which in turn will enable staff to create workarounds to bureaucratic barriers and deliver low cost, low risk improvements to patient service every day.

-- Ensure the formal and informal organizations support each other. Empathy thrives in organizations when formal processes and informal relationships reinforce one another, as when the formal organization strengthens informal practices, like storytelling, to better educate staff and reinforce success.

"The concept of the Empathy Engine - an organization where senior leaders, managers, and the frontline all live in their customers' shoes to consistently deliver superb customer service - can be applied to any industry," Ms. Entel said. "But in healthcare, where medicine and service are both so central to any organization's success, an Empathy Engine has the potential to change the game and set a new service standard. The Empathy Engine in healthcare can spur patient service breakthroughs that not only improve the quality of care and business results, but also reinvigorate the human relationships at the core of this most human industry."

For more information about the survey and/or to arrange an interview with Traci Entel or Jenny Machida at Katzenbach Partners, please contact Alexandra Corriveau at Sommerfield Communications, Inc. at 212-255-8386 or alexandra@sommerfield.com.

Katzenbach Partners' study, The Empathy Engine: Turning Customer Service Into a Sustainable Advantage can be found at www.empathyengine.com

How The Poll Was Conducted

The Katzenbach Partners Healthcare Empathy Engine Poll is based on telephone interviews conducted October 18-21, 2007, with 1,003 adult Americans, 18 years of age and older living in the continental United States. Data includes interviews with 842 Americans self-reporting that they have been a patient or visitor at a hospital or clinic in the past three years.

Interviewing was conducted from a central telephone facility utilizing an unrestricted random-digit-dial (RDD) sampling methodology to ensure that both listed and unlisted telephone numbers were included. The sample of telephone exchanges called was randomly selected by computer from approximately 62,000 exchanges and about 2.6 million working banks. The sample is fully replicated and stratified by region. Within each household, one adult was designated by a random procedure to be the respondent for the survey. All sample numbers selected were subject to up to four attempts to complete an interview.

Survey results have been weighted by four variables (age, sex, region and race) for reliable and accurate representation of the total U.S. population.

In theory, in 19 cases out of 20, overall results based on both the national sample of 1,003 and the sample of 842 Americans reporting to have been a hospital/clinic patient or visitor in the past three years will differ by no more than three percentage points in either direction from what would have been obtained by seeking out all American adults.

About Katzenbach Partners

Katzenbach Partners LLC works with leading global companies to achieve breakthroughs in organizational performance. The firm applies new thinking about how organizations work, serving companies across industries to shape strategy, improve operations and effect change. Katzenbach Partners is building a different kind of consulting firm, one that integrates strategic problem solving with pragmatic insight into people and organizations. http://www.katzenbach.com