The Rising Importance

of Patient Satisfaction
in a Value-Based Environment
Why Now is the Time to Focus on Employee
Engagement Strategies to Improve the Patient
Experience and Boost the Bottom Line
Hospitals have always been in the business of providing patient care. However,
with the inception of Value-Based Purchasing, the measurement of successful
patient care delivery has been redefined. The move from fee-for-service to pay-
for-performance also means that reimbursements are tied to the quality of care
that is delivered. Hospitals that provide a higher quality of care than their peers
will receive reimbursement incentives, and hospitals that provide a lower quality
of care will be penalized.

Quality of care is measured with two metrics: patient outcomes (70%) and patient
satisfaction (30%)1. With patient satisfaction scores now having a direct impact on
the bottom line, the measure and management of patient satisfaction has become
a top priority at health systems across the country. In fact, more than half (54%) of
healthcare executives say patient experience and satisfaction is one of their top
three priorities, according to HealthLeaders Medias 2013 Industry Survey data2.
 More than half (54%) of
healthcare executives say
patient experience
and satisfaction is one
of their top three priorities.
HealthLeaders Medias
2013 Industry Survey data
 Why Patient Satisfaction is a Top Priority
Patient satisfaction carries the promise of
big rewards and the risk of big penalties.
The most commonly used measure
of patient satisfaction is the Hospital
Consumer Assessment of Healthcare
Providers and Systems (HCAHPS). Through
the HCAHPS survey, patients answer 32
questions to rate their inpatient stay.
Based in part on these scores, hospitals
can either lose or gain up to 1.5% of their
Medicare payments in fiscal year 2015.
CMS will increase the stakes over the next
couple of years, with 2% of reimbursement
dollars ultimately being at risk by fiscal
year 20173.
The Link Between Profitability and HCAHPS Scores
1
0
-1
mean margin
Only the hospitals
in the top quartile for
-2
patient ratings showed
a positive profit -3
margin. -4
-5
Quartile group for HCAHPS overall rating of the hospital
Source: Press Ganey study of data from 3,035 U.S. acute-care hospitals.
Value-based purchasing programs and
HCAHPS scores are estimated to place at
risk an average of $500,000 to $850,000
annually per hospital4. That risk can be
turned into reward: Press Ganey reports
that a hospital with $120 million annual
revenues can improve patient satisfaction
and realize an estimated $2.2 million to
$5.4 million in additional revenue annually5.
There is also a direct link between HCAHPS
scores and profitability. Based on data
from 3,035 U.S. acute-care hospitals, 25%
of hospitals with the highest HCAHPS
scores were also the most profitable
with a mean margin of .93, with the
low performers for patient satisfaction
.93
- 1.60
- 2.18
- 4.59
1 2 3 4
showing significantly lower profitability
with a mean margin of -4.59. In fact, only
the hospitals in the top quartile for patient
ratings showed a positive profit margin6.
A metric that has received less attention
but has a large impact on a hospitals
long-term viability is the lifetime value of
a patient. Patients are also consumers,
and as hospital quality metrics become
easier to access, potential patients have
the opportunity to comparison shop and
choose the hospital that they feel will
provide them with the positive patient care
experience they desire. With the lifetime
value of a typical household estimated
to be $405,0007, its clear that patient
satisfaction levels can have an enormous
impact on the bottom line in both the
short- and long-term.
With a growing amount of revenue
at stake, hospital leaders are looking
for strategies to improve the patient
experience and boost their HCAHPS scores.
 Happy Nurses = Happy Patients
The Enormous Impact Nurses Have on Patient Satisfaction
A growing body of research is revealing
the strong, direct impact that staff
engagement has on HCAHPS scores. A
recent study found that hospitals scoring
in the top 10% of employee engagement
scored an average of 61 percentile points
higher on the HCAHPS Overall Hospital
Rating metric than hospitals in the bottom
10% for employee engagement8.
Healthcare leaders from all disciplines are
raising their voices about the connection
between staff satisfaction and patient
satisfaction. In the New York Times
Bestselling book Patients Come Second,
the authors point out that patients are
The only way to
make sure patients
are satisfied is to
make sure employees
are satisfied.
Joe Giansante, VP, HR,
Ellis Medicine
customers looking for an exceptional
experience that balances cost, quality
and service, and it will be the employees
that deliver on those expectations. Tony
Armada, CEO of Advocate Lutheran
General in Chicago sums it up well,
advising, I would urge health care leaders
to understand that patients going forward
will have more choice than ever, and it is
best to serve our patients with a group of
people that are dedicated and engaged.9
Following the successful rollout of a
productivity initiative that yielded $2.5
million in savings in just 8 months, the
team at Anderson Regional Medical Center
in Mississippi also understands the value
of focusing on employee satisfaction. Matt
Edwards, CNO at Anderson Regional, says,
If our staff is satisfied, theyre engaged
and can take better care of the patients.
Staff satisfaction has a direct impact on
patient satisfaction.10
In the case study, Intersection of
Excellence: API Healthcare & Ellis Medicine,
How Real-Time Information is Advancing
Ellis Medicines Workforce and Integration,
Joe Giansante explains, The only way
to make sure patients are satisfied is to
make sure employees are satisfied. The
VP of HR at Ellis Medicine in New York
also provides some direction about how
to achieve better employee satisfaction:
A success factor for driving employee
satisfaction is empowering employees
to gain visibility of their schedule and
compensation.11
Employee Engagement Strategies
that Improve Patient Satisfaction
Right-Staffing to Meet Patient Needs
In the past, the most important outcome initiative found that financial, clinical and
health systems wanted from a workforce employee-related outcomes were almost
management initiative was labor cost equally important.12
savings. Now, health systems are looking
In addition to productivity initiatives,
at the broader picture, requiring workforce
management initiatives to also provide healthcare organizations are relying on
acuity-based staffing to deliver cross-
the ability to move the needle for patient
functional results. A 2014 HealthLeaders
satisfaction, quality of care and employee
engagement metrics as well. survey of 124 healthcare executives
found that both productivity and acuity-
A 2015 HealthLeaders survey that asked based staffing are high rankers for both
126 healthcare executives about outcomes labor cost reduction and quality of care
desired from a workforce productivity initiatives.13

Outcomes Desired from

Workforce Productivity Initiative
80
70 66%
62% 62% 61%
60
50
40
30
20
10
0
Healthcare executives want Improve Improve Reduce Increase
patient patient overtime employee
their workforce management satisfaction/ outcomes costs engagement
engagement
initiatives to deliver A 2015 HealthLeaders survey

improved financial,
clinical and employee
engagement outcomes.
This shift to expecting more than just cost
savings results from workforce management
initiatives relies on access to more robust
workforce data analytics. Forward-thinking
healthcare organizations are finding ways
to harness those analytics to gain a deeper
understanding of patient needs and how
to match the right staff with those patients
to meet their needs. The ability to right-
staff is important to staff satisfaction and
retention, as summed up in a Nursing
Economics article which states, When
nurses are exposed to inadequate staffing
levels, they leave their positions.14
With the ability to make data-driven staffing
decisions, health systems reap the benefits
of streamlined processes, better patient
care, engaged staff and ultimately a far
healthier bottom line. That allows caregivers
to more efficiently and effectively provide
outstanding care to their patients, and thats
a huge satisfier for staff.

Productivity and Acuity-Based Staffing Deliver Both Financial and Clinical Outcomes
Top Labor Cost Reduction Initiatives Top Quality of Care Initiatives
80
80 80
80 73%
73% 70%
70%
70
70 67%
67% 70
70
62%
62% 60%
60%
60
60 52%
52% 60
60
50
50 50
50
40
40 40
40
30
30 30
30
20
20 20
20
10
10 10
10
00 00
Overtime
Overtime Productivity
Productivity Acuity-based
Acuity-based Staff
Staffskill
skilllevel/
level/ Acuity-based
Acuity-based Productivity
Productivity
Staffing
Staffing compentency
compentencymix mix Staffing
Staffing
A 2014 HealthLeaders survey
A 2014 HealthLeaders survey
 Managing Overtime
Overtime carries a price tag higher
than the burden it puts on labor costs.
Extensive overtime also has a negative
impact on employee engagement and
patient satisfaction.
Logic dictates that working long hours
can take a toll on employees, and
research supports that theory. A
Health Affairs study found a significant
relationship between longer shift lengths
and nurse reports of burnout and job
dissatisfaction, showing that nurses
who worked 13+ hours are 2.7 times
more likely to be burnt out, 2.38 times
more likely to be dissatisfied in their jobs,
and 2.57 times more likely to intend to
leave their job in the next year than
nurses who work 8-9 hours.15
For every 10 percent
of nurses reporting
job dissatisfaction,
the likelihood of patient
recommendations
decreases by
2 percent.
Studies have also shown that when nurses
work long hours, patient satisfaction
suffers. Patients reported lower
satisfaction levels when higher proportions
of nurses worked shifts longer than
thirteen hours, with patients more likely
to rate the hospital 6 or lower on their
HCAHPS survey.16
Nurse dissatisfaction caused by long hours
also impacts the likelihood that patients
will recommend the hospital to friends
and family. For every 10 percent of nurses
reporting job dissatisfaction, the likelihood
of patient recommendations decreases by
2 percent.17
The impact of overtime starts with a drain
on labor costs. However, the negative
impact carries through to both staff
satisfaction and patient experience. When
not managed, overtime creates a deeply
embedded, pervasive problem that has a
negative impact on financial, clinical and
staff satisfaction metrics.
Final Thoughts
The healthcare industry is undergoing must also have a positive impact on both
massive changes, moving from a staff and patient satisfaction, providing
volume-based care model to a quality- hospitals and health systems with a solid
based care model. In order to adapt to foundation that will sustain them in both
these fundamental changes, healthcare the short run and the long haul.
organizations are rapidly changing the
way they do business, and their evolving
workforce management strategies
reflect that. Its not enough to implement
workforce management initiatives that
cut labor costs. Instead, those initiatives
 1
Frequently Asked Questions: Hospital Value-Based Purchasing Program. Accessed April 6, 2015. http://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/hospital-value-based-purchasing/Downloads/FY-2013-Program-Frequently-Asked-Questions-about-Hospital-VBP-3-9-12.pdf
2
Rice, Chelsea. 5 Ways to Raise HCAHPS Scores via Staff Engagement. HealthLeaders Media Insider, November 2014.
3
Frequently Asked Questions: Hospital Value-Based Purchasing Program. Accessed April 6, 2015. http://www.cms.gov/Medicare/Quality-Initiatives-Patient-
Assessment-Instruments/hospital-value-based-purchasing/Downloads/FY-2013-Program-Frequently-Asked-Questions-about-Hospital-VBP-3-9-12.pdf
4
Buhlman, Nell and Matthes, Nikolas. The Time to Prepare for Value-based Purchasing is Now: Calculating Risk and Strategizing for Improvement as a New
Payment Methodology Hits Home. Press Ganey. 2011.
5
Hall, Melvin F. Looking to Improve Financial Results? Start by Listening to Patients Healthcare Financial Management, October 2008.
6
Press Ganey 2011 Pulse Report: Perspectives on American Health Care. Accessed April 6, 2015. http://www.pressganey.com/Documents_secure/Pulse%20
Reports/2011_Press_Ganey_Pulse_Report.pdf
7
How to Maximize Lifetime Value of the Patient Relationship, Presented at The Beryl Institute Patient Experience Conference 2011, Accessed on February 20,
2015. https://c.ymcdn.com/sites/theberylinstitute.site-ym.com/resource/resmgr/conference_2011_pdf/morgan_-_revenue_cycle_impac.pdf?hhSearchTer
ms=%22lifetime+and+value+and+patient%22
8
Every Voice Matters: The Bottom Line on Employee and Physician Engagement. Press Ganey, 2013.
9
Spiegelman, P., & Berrett, Britt. Patients Come Second: Leading Change by Changing the Way You Lead. (2013):20-21.
10
Interview with Matt Edwards, February 27, 2015.
11
API Healthcare Case Study.
12
Targeting Better Outcomes & Patient Satisfaction Through Workforce Management Initiatives. HealthLeaders and API Healthcare, 2015.
13
Top Workforce Management Initiatives for Quality of Care Improvements and Labor Cost Reduction. API Healthcare, 2014.
14
Hairr, Debra C. et al. Nurse Staffing and the Relationship to Job Satisfaction and Retention. Nursing Economics, 2014, 32(3): 142-147.
15
Stimpfel, Amy, et al. The Longer The Shifts For Hospital Nurses, The Higher The Levels Of Burnout And Patient Dissatisfaction. Health Affairs, 31, no.11
(2012):2501-2509.
16
Ibid.
17
Mchugh, Matthew et al. Nurses Widespread Job Dissatisfaction, Burnout, and Frustration With Health Benefits Signal Problems For Patient Care. Health
Affairs, 30, no.2 (2011): 202-210.

2015 API Healthcare Corporation, a GE Healthcare Company. All rights reserved.

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