Poor customer service has significant impact on bottom-line results

Thinking outside the box can make huge difference

Not all factors that affect a hospital’s bottom line relate directly to revenues and/or expenses. Although it may take months or sometimes even years to make its full effects known, poor customer service can be an albatross around the neck of the most well-meaning quality staff.

"Poor service with regard to patients obviously affects your market share and thus your bottom line," says Kristin Baird, RN, BSN, MSHA, vice president for business development at Watertown Area Health Services in Watertown, WI, and author of Customer Service and Healthcare: A Grass-Roots Approach to Creating a Culture of Service Excellence.1 "While marketing and advertising can influence name recognition and even preference, once a patient and [his or her] family use your facility, they will form opinions whether to return and talk positively about you, or to not return and talk negatively."

The cost of that negative experience can be considerable, Baird notes. "Let’s imagine you lose a 35-year-old woman’s support. She may not be making a decision just for herself but for her spouse, her children, and possibly her parents, so there’s a ripple effect."

"It’s been said that one nurse in the ED [emergency department] with a bad attitude can cost you $250,000 in lost revenues," notes Liz Jazwiec, RN, who heads up the Oak Lawn, IL-based consulting firm Liz inc. "The ED usually gets to see between one-third and one-half of all your patients. Whether the patient is admitted or not, [he or she] can go into the community and tell other people about the experience. A negative experience can hurt you on admissions for as many as five years."

And the impact can extend far beyond admissions, she notes. "I have seen situations like the one at Baptist Hospital in Pensacola, FL, where customer satisfaction scores have helped cause bond ratings to rise from B+ to A-," she says. "That probably saved them $500,000 in interest. They also saw a tremendous reduction in claims, so from a risk management standpoint, the money they had to put aside for possible lawsuits decreased significantly."

When we think of customer service, our thoughts gravitate immediately to the patient. That kind of limited thinking can cost you money, warns Baird. "Customer service has to do with patients, physicians, and co-workers/employees; it impacts them all," she asserts.

"There is definitely a relationship between employee satisfaction and patient satisfaction," adds Kathleen Blandford, vice president of quality improvement at VHA-East Coast in Cranbury, NJ. "If employees are happy, they are that much more committed to their work and to their patients. If you have an employee morale problem, that causes turnover and makes vacancies even worse than they would be in this current shortage."

As for physicians, "the last thing a doc wants is to have patients complain that something bad happened to them in the hospital," she notes.

"If some of your customers are physicians who have the latitude either to admit patients to your facility or to one of your competitors, you can lose again on the bottom line," adds Baird. "Physician loyalty really adds up to dollars, and any quality manager should have access to the financial data that will show them which physician brings in what revenue and be cognizant of which physicians are splitters.’ You can do the math yourself and figure out what it will cost you."

With regard to associates, Baird is big on creating what she calls "a culture of service excellence," which means having respect for your co-workers and the jobs they perform. "If you don’t have a healthy culture and an open, healthy environment, you will lose associates, and in this day of shortages, nobody can afford to lose any good employees," she says. "What’s more, with the aging baby boomers, we will need more medical care than we have ever seen, which magnifies the problem."

The hard-dollar costs can be considerable, she points out. "The Society for Health Strategy and Market Development (SHSMD) has created a formula for calculating what it costs to replace an employee. In our industry it costs around $16,000," she says. "That includes loss of productivity, advertising, recruiting, downtime, and so on."

Your customers even can include payers, says Baird. "If a managed care organization pays attention to how well you serve your patients, then it’s an important part of the equation, too," she observes. "Look at who your largest managed care organizations are; can you afford to lose them? How can you show them that you take customer service very seriously?"

Her answer: "You have to create a culture of service excellence."

Creating a culture of service excellence has to begin from the top down as well as from the bottom up, says Baird; you can’t have one without the other. "You need the support of your top administration as well as your middle management," she notes. "They have to not only believe it, but to walk the walk; they have to take an active role and work very hard at keeping the vision front and center."

Baird cites her CEO as an example of how to do it right. "He has made our vision statement distinct and memorable. He weaves it into important meetings, newsletters — wherever he has an audience," she says. That vision statement is, indeed, distinct and memorable: "We strive to be a place where patients choose to come for care, where physicians choose to practice, and where associates choose to work. We know for a fact that 91.5% of our associates can quote that vision statement," says Baird.

Of course, different strategies must be used to address different customer groups. "With associates, the grass-roots formula is to go out and work with groups of employees to help them recognize what they can do," says Baird. "For example, we have a bright idea’ program, a system put in place where employees can submit ideas. Little things like that make a difference."

Rewards and recognition also are important, she says. "One program we use is called Notable Names,’ which encourages associates to catch each other in the act of being kind, or going above and beyond what is expected," she says. How does one go "above and beyond?"

"People expect good medical care and appropriate treatment," Baird says. "Beyond that, you should make sure to keep the family informed and involved, keep the patient informed about what to expect next, and respond promptly." As one example, the nurses at Baird’s hospital implemented a new policy that said everybody was responsible for answering the patient call light. "We’re not all nurses, but the drapes in the patient’s room might be opened too wide, or they may need the table closer, or want the door closed. This type of extra service can improve patient satisfaction scores significantly," she says.

"The way you deal with complaints — your recovery process when you react to complaints — can be very important," adds Blandford. "The more you can improve your responsiveness, the [greater the] likelihood you will reduce the number of complaints. A frustrated, angry, unhappy patient will press the issue forward all the way to a lawsuit, while one who has been treated well may not."

Blandford also recommends good, solid communication strategies — even "gimmicky stuff."

"Know if your patients are going to have a birthday while they’re in the hospital and send them a card," she suggests.

Managing expectations is another critical issue in patient service, says Jazwiec. "If waiting time is going to be 45 minutes, tell the patients it will be an hour; they’ll be happier," she suggests. "And acknowledge their inconvenience." Improved efficiencies also can help boost satisfaction levels. "It used to be that when we lost something belonging to a patient, we would go through the process of filling out five or six forms, which would take four or five hours," she recalls. "Now, if we lose something worth, say, $50, we apologize for losing the article and pay the $50."

Using scripts also can be effective, says Jazwiec. These can includes lines such as, "Is there anything else I can do for you?" or "We are concerned about your privacy; should I pull the curtain closed?"

Anticipate doctors’ needs

Addressing the needs of physicians requires a slightly different strategy. "What makes doctors happy is knowing they have a competent staff working for them," says Baird. "They look to the staff for 24/7’ care, so when their patients are happy with their care, the physician is more confident in the hospital. When they hear the patient say, It takes me a half hour to get my call light answered,’ that’s bad. But if they hear, I’ve never seen such a warm, friendly, caring staff,’ that makes them want to send all their patients there."

Doctors also want to feel appreciated. "They appreciate it when we understand what they need and want, and anticipate those needs," says Baird. "So, they should not surprise you every time they come on your unit and ask for a certain protocol. That way, we’re augmenting their work."

It’s critical that you not jump headfirst into a customer service improvement program; you’ve got to know where you stand. "It’s absolutely imperative to have baseline information; you wouldn’t call AAA and ask how to get to L.A. if you didn’t know where you were beginning your trip," says Baird.

"I have some biases about measurement," adds Jazwiec. "You need to be able to get mostly data. If you look at your budget, you need to look at it every month; to give people data four times a year and expect things to improve is very difficult. Your information has to be provided monthly, and it must be unit-specific. You also have to have something that allows you to benchmark nationally." Many companies provide survey instruments, but Jazwiec says she prefers Press, Ganey Associates in South Bend, IN, "mostly because of those issues." However, she adds, "I don’t try to tell clients who to use; rather, I tell them, This is what you need.’"

Baird agrees that it’s critical to know your facility’s specific needs. "Whenever I do a presentation, I encourage people to go back to their own organization and review their own data," she says. "Nothing hits home like that. If you go to the financial data, talk about who your most active physicians are and what their piece of the business means to your bottom line. What if you lost 15% of your business? Or 20%?"

In terms of specific survey instruments, "We use Press, Ganey, and the main reason we do is it has a large database," says Baird. "It’s not enough for us to conduct our own in-house survey; we end up comparing ourselves to ourselves. We didn’t know how we stacked up against other hospitals our size. How can I incentivize our associates to improve if our consistent mean score is 90%? With Press, Ganey, you may find that compared to the database, 90% is average. When this process really gets thrilling is when you stand out from the crowd, and you won’t get there without comparative data."

Human nature is competitive, which works to our advantage, adds Baird. "Focus on what’s important to your organization, but recognize that it’s not enough to be average. Nobody seeks out health care because it is average. "When was the last time you heard a patient say, I’m looking for an average brain surgeon in an average hospital?’"


1. Customer Service and Healthcare: A Grass-Roots Approach to Creating a Culture of Service Excellence. San Francisco: Jossey-Bass; and Chicago: AHA Press; 2000.

Need more information?

For more information, contact:

Kristin Baird, RN, BSN, MSHA, 509 Hillcrest Drive, Fort Atkinson, WI 53538. Telephone: (920) 262-4309. E-mail: kbaird@WAHS.com.

Kathleen Blandford, VHA-East, 68-A S. Main St., Cranbury, NJ 08512. Telephone: (609) 395-8053. E-mail: kblandford@vha.com.

Liz Jazwiec, RN, Liz inc. Telephone: (708) 422-7074. Fax: (708) 229-1730. E-mail: lizjaz@aol.com.