Patient Satisfaction and the Bottom Line

The transition to a value-based environment has given the health care industry good reason to focus on patient satisfaction. Patient satisfaction impacts HCAHPS scores, which can have a direct impact on the bottom line. The Hospital Consumer Assessment of Healthcare Providers and Systems survey (HCAHPS) is the most commonly used measurement of patient satisfaction. Upon discharge, patients are asked a series of 32 questions pertaining to their inpatient stay. Based upon these scores, hospitals can either lose or gain up to 1.5% of their Medicare payments, with that number set to increase to as much as 2% by 2017. It is estimated that this translates to an average of $500,000 to $850,000 annually per hospital.1 However, this risk also has the potential to turn into great 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 annually.2

With numbers like this, it is no surprise that more than half of healthcare executives surveyed say that patient experience and satisfaction is one of their top three priorities.3

The direct link between HCAHPS scores and hospital profitability is demonstrated through analysis of data from 3,025 U.S. acute-care hospitals. The 25% with the highest HCAHPS scores were also the most profitable, with a mean margin of .93. The low performers for patient satisfaction showed 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 margin.4

As more American’s gain access to health insurance through the ACA, the importance of patient satisfaction becomes even greater. More coverage means more patients are seeking care, whether it is elective or dictated by their health. Hospitals are competing for these dollars, and for good reason the patient experience is playing a key role in their ability to attract business.

Lifetime value, which the corporate world uses to determine how much a customer is worth, also applies to health care. Patients don’t need to stay loyal to one hospital if they aren’t happy with the quality of care or their experience. The average lifetime value of a typical household is $405,000.5

Patient Satisfaction and the Bottom Line-graph

Quality of care has the biggest impact on patient satisfaction. As the healthcare workers who work most closely with patients, nurses and their satisfaction with the job have a direct impact on care quality. For every 10% of nurses who report dissatisfaction with their job, patient recommendations to that hospital decrease by 2%.6 Hospitals that score a 7 or lower on HCAHPS have an average return rate of 37%, while hospitals that score a 9 or higher have a return rate of 80%.7

Hospitals that invest in the workforce will be in a better position to sustain their profitability long-term. Technology can help create more positive working environments by providing features that support employee satisfiers such as greater engagement and better work/life balance. Integrated staffing and scheduling technology can also help prevent burn out and compassion fatigue by reducing overtime and other contributing factors.


1Patient experience and satisfaction are critical to the bottom line. It’s no longer enough to focus on labor costs. Workforce initiatives must consider both the employee and patient experience, and recognize that the two will be linked for the foreseeable future.

2Buhlman, 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.

3Hall, Melvin F. “Looking to Improve Financial Results? Start by Listening to Patients” Healthcare Financial Management, October 2008.

4Rice, Chelsea. “5 Ways to Raise HCAHPS Scores via Staff Engagement.” HealthLeaders Media Insider, November 2014

5“Press Ganey 2011 Pulse Report: Perspectives on American Health Care.” Accessed April 6, 2015. Reports/2011_Press_Ganey_Pulse_Report.pdf

6How to Maximize Lifetime Value of the Patient Relationship, Presented at The Beryl Institute Patient Experience Conference 2011, Accessed on February 20, 2015. ms=%22lifetime+and+value+and+patient%22

7Health Affairs “Nurses’ Widespread Job Dissatisfaction, Burnout, & Frustration with Health Benefits Signal Problems for Patient Care.”

J.D. Power and Associates National Hospital Service Performance Study: (2005)


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