Private clinics are increasingly finding themselves under financial strain. Many of these pressures can be traced back to poor quality management and lapses in patient satisfaction.
When the quality of care takes a dip — or when patients feel unheard or misunderstood — clinics measure a decline in appointments, repeat visits, and referrals.
How big of an issue that might be for your clinic isn’t always obvious. Let’s see how you can dig up those numbers and quantify potential revenue losses due to poor patient satisfaction.
The correlation between patient experience and clinic revenue
A satisfied patient is often a loyal patient. When their visit goes smoothly, patients are more likely to return to the same clinic for future healthcare needs. Not only does this mean a consistent revenue stream, but it also reduces the costs associated with attracting new patients.
Accenture study found that U.S. hospitals that deliver “superior” customer experience achieve net margins that are 50 percent higher, on average, than those of hospitals providing “average” customer experience. Customer experience was measured through the HCAHPS score.
While the U.S. market is significantly more privatized, there’s no reason to believe that the same correlation could not be applied to the European healthcare industry.
Beyond immediate retention, patient experiences — both positive and negative ones — can leave an indelible mark on a clinic's reputation. Positive reviews and word-of-mouth referrals can serve as potent marketing tools, while negative feedback can dissuade potential patients and tarnish a clinic's public image.
How to calculate revenue loss due to poor satisfaction?
Everything we have covered so far means nothing if we can’t put it into practice. Here’s one of the ways clinics can use to quantify the revenue loss stemming from poor patient satisfaction.
Step 1: Understand PLV
Patient Lifetime Value (PLV) represents the total revenue a healthcare provider can expect from a single patient over the course of their relationship. This metric offers insights into the long-term financial value of each patient, and it can vary based on factors such as the type of medical services they require.
In simpler terms, to determine the PLV, clinics can use the formula:
PLV = (Average Value of a Visit) x (Number of Visits Per Year) x (Average number of years a patient stays with the clinic)
This calculation gives clinics an estimate of the average total revenue they can anticipate from each patient, aiding in future financial planning.
Having accurate data is essential to calculate PLV. Clinics should maintain records of each patient visit, provided services, and the associated costs. The numbers shouldn’t be that hard to get to with digital record-keeping systems.
Step 2: Measure patient satisfaction
Metrics like the Net Promoter Score (NPS) or satisfaction ratings provide clinics with a snapshot of patient sentiments. While NPS gauges the likelihood of patients recommending the clinic to others, satisfaction ratings directly gauge how they feel about the received services.
This is just one of the reasons why gathering feedback has become much more than just a formality — it's a vital process for clinics aiming to improve their services and patient relations.
Without a systematic feedback collection system, clinics remain blind to patient grievances, missing out on opportunities to refine their services and rectify shortcomings.
Step 3: Estimate the attrition rate linked to poor satisfaction
Successfully analyzing feedback requires a keen eye for recurring themes and patterns. Clinics can group similar feedback or complaints to pinpoint specific areas that consistently cause dissatisfaction. Addressing these areas can significantly reduce attrition rates linked to dissatisfaction.
To estimate attrition due to dissatisfaction, clinics can use this simple formula:
Attrition rate = (Number of patients leaving because of dissatisfaction / Total number of patients who left) x 100%
This percentage offers a clear-ish picture of how much attrition is directly attributed to poor patient experiences.
Of course, to make a reliable estimate in this manner, clinics need to have a good patient feedback collection system. Such a system ensures clinics are working with a large enough sample and are able to identify patients who left negative feedback before canceling future visits (or simply never coming back).
There’s also a great benefit in tracking attrition trends. Comparing the current attrition rate with past data can ascertain if there's a spike in patients leaving due to dissatisfaction. Identifying this early allows for timely interventions that will prevent further revenue losses.
Step 4: Calculate lost revenue
To get an estimate of the potential revenue loss, simply multiply the PLV with the attrition rate. You’ll get a figure that indicates the financial impact of dissatisfaction and underscores the urgency of addressing patient concerns.
With collected data on PLV, attrition rates, and patient feedback, clinics can paint a detailed picture of both immediate and future revenue implications. This projection is an eye-opener for many, showcasing the tangible financial repercussions of poor patient experiences.
The ROI of investing in patient experience
Prioritizing patient experience isn't just about ethics and reputation — it's a sound financial decision.
There are many areas you can invest in to improve patient experience:
- Patient experience/feedback collection platforms: Modern clinics tap into feedback platforms like InsiderCX to get real-time insights from their patients. Such tools identify areas that shine or require refinement, helping you improve and tighten your internal processes.
- Digital appointment booking systems: Gone are the days of holding the line for an available operator. With these systems, patients can seamlessly book, adjust, or cancel appointments, adding a layer of convenience that enhances their overall experience.
- Electronic health records (EHR): Shifting from paper to digital, EHR systems streamline patient data management. Clinicians get swift access to patient histories, prescriptions, and notes, facilitating more informed decisions and personalized care.
- People and equipment: At the end of the day, what patients care the most about is your ability to solve their medical issues. Investing in people and equipment will help you do that better — while making sure patients enjoy the process (or dread it less).
Clinics that invest in enhancing patient satisfaction often see a notable uptick in retention rates, referrals, and overall revenue. The financial gains from satisfied patients often far outweigh the initial investments.
Stop bleeding money with InsiderCX
With our patient experience platform, healthcare organizations get a sophisticated tool for automating patient feedback collection and the means to turn routine patient feedback into tangible improvements.
Book a quick demo with our team and learn how InsiderCX saved clinics over $50,000€ while boosting their online reputation.
