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How Patient Communication Preferences Impact Practice Costs and Revenues

By June 12, 2019 No Comments
Patient Communication Impacts Practice Costs and Revenues

Though most medical practices accept the need for patient-centered care, one critical piece—patient communication preferences—remains largely unimproved.

Don’t misunderstand: I get it. Understanding patient communication preferences and improving the communication between healthcare provider and patient takes time and money, of which there is never enough of either. In addition, the priority is always on providing the best care, frequently resulting in subpar communication about the care they provide.

For most medical practices, improving patient communication is a ship that turns very slowly. However, given the consequences, both good and bad, that follow effective patient communication (or lack thereof), you would expect at least a few more hands tugging on the helm, turning that ship toward a brighter horizon.  

What is the impact of knowing and responding to patient communication preferences? For simplicity’s sake, here’s a review of two of the most significant impacts of patient communication – the impact on costs and the impact on revenue.

The Impact on Costs

For the purposes of this post, let’s define costs as any money that diverts from the path to your pocket and, instead, goes out the door.

The largest swing in costs stemming from patient communication comes from adverse events. Studies show that patients who sue their healthcare provider do so because of one of four types of communication problems: Delivering information poorly, failing to understand the patient’s perspective, devaluing patient views, and deserting the patient (Kavalier, F., and Spiegel, A., Risk Management in Health Care Institutions: A Strategic Approach, New York: Jones and Bartlett, 2003).

Fox News KTVU recently reported a perfect example of failing to understand patient communication preferences. In a Kaiser Permanente Medical Center’s emergency department in California, a 79-year old man, surrounded by his family, was told he “might not make it home” by a doctor via a television screen on a robot. The news quoted the granddaughter saying, “…I don’t think somebody should get the news delivered that way. It should have been a human being.”

An article published by the Healthcare Financial Management Association, stated “an emphasis on improved caregiver-patient communication, patient and family involvement, and a focus on the patient’s perspective has the potential to reduce adverse events, malpractice claims, and associated operating cost increases” (Charmel, P., and Frampton S., Building the Business Case for Patient-centered Care, HFMA, 2008).

After implementing such patient-centered practices, such as improved communication, “one hospital has reported compelling results related to malpractice claims – a dramatic reduction in malpractice claims in the hospital’s first nine years of implementation— despite an increase in patient care activity, which tends to increase claims.”

Clearly, the correlation between improving communication with patients and reducing costs from adverse events is strong. And the first step to improving communication is understanding patient communication preferences.

The Impact on Revenue

Though avoiding adverse events, such as malpractice, is motive enough for understanding patient communication preferences, the impact on revenue is even more substantial.

A simple hypothetical example:

Let’s assume our hypothetical medical practice, Superior Medical Clinic, has 10,000 patients in their database. Let’s also assume that each patient visit is worth $100 in revenue to the clinic.

What would it mean to Superior Medical Clinic to have 1% of their patients come in one more time a year? Well, the math is pretty simple:

  • 1% of 10,000 = 100
  • 100 more visits X $100 in revenue per visit = $10,000 more revenue

Now the question is, what should Superior Medical Clinic expect to pay to get that $10,000 more in revenue? What would you pay? Would you pay $75 to bring in $100? $50? $25? Depending on your clinic’s cost structure, paying $25 for an additional visit worth $100 in revenue is great deal. Let’s say we bring the cost down to $10 for a return of $100. It’s a no brainer, right?

Let’s move from the hypothetical to a real-life example.

Recently, a medical clinic located in the heart of the Rocky Mountains asked Relevant MD to engage their current patients with the hope of generating incremental visits they would not have otherwise had.

Based on patient communication preferences, this clinic had Relevant MD use email, automated phone calls, and text to engage their database. Their statistics were not as clean and neat as those in our hypothetical example. They were, however, quite astounding.

Over three months, this clinic engaged 15,632 of their patients and generated 1,208 wellness checks, 667 physical exams, and 774 cholesterol checks. In other words, they got 16.9% of their patients to schedule an additional visit. Because of the mix of types of appointments, the average value per visit was $243 in revenue. That’s an additional $644,481 in revenue!

This success begs the question, what did they pay for the $243/visit? Did they pay $100? $50? $10?

This clinic ended up spending $4.03 per visit. That’s a whopping 8,300% return on their marketing spend.

Summary:

  • 15,632 patients
  • 3 month campaign
  • Generated incremental visits from 16.9% of total patient population
    • 1,208 wellness visits
    • 667 physical exams
    • 774 cholesterol checks
  • $644,481 in total revenue or $243/visit
  • $4.03 in cost per visit
  • 8,300% ROI in marketing spend

Can every marketing campaign expect this kind of return? I can’t say. Definitively, the link between understanding patient communication preferences and its impact on costs and revenue is unbreakable. And the rewards will follow those clinics that use that understanding to improve their communication with their patients.

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