From HealthLeaders Media '09: Healthcare in the Experience Economy

HealthLeaders Media Staff, October 16, 2009

Healthcare, like the rest of the United States, is transitioning from a service-based economy to an experience-based economy, said Joe Pine, best-selling author of The Experience Economy and Authenticity, during a keynote address at HealthLeaders Media 09: The Hospital of the Future Now in Chicago on Thursday.

Services in the United States have essentially become a commodity, he explained. The key to success for any business is not necessarily improving the service they provide, but improving the customer's overall experience. As an example in healthcare he pointed to North Hawaii Community Hospital, where every room looks out onto healing gardens and careful attention is paid to landscape and design. Although the gardens don't add a service in the economic sense, both patients and employees have better experiences because of them.

Fresno Surgery Center is also a leader in the experience economy, he said. The center spends five times the industry average on hospital food and other patient accommodations, which may not seem like a prudent financial move on paper. But a whopping 99% of patients rate their experience at Fresno as great on Press Ganey scores, and the additional investment is worthwhile, Pine said.

Although patient experience is receiving more attention in most hospitals, it isn't always perceived as a top financial priority. However, Pine made the case that improving patient experience is not only important to a hospital's bottom line, it is perhaps the single most important factor to success in the coming years.

Hospitals not only need to change how they operate, but how they invest and make strategic decisions, to succeed in the new economic environment.

Pine identified four priorities for hospitals to improve patient experience:

Theme the experience. Just as every hospital has a mission that guides its internal workings, every business should have an organizing principle for their customers' experiences, he said. Whether it is a children's hospital with baseball-themed patient rooms or Disney's sand-castle imaging machines, experience themes are pivotal to overall satisfaction and are the differentiators in today's economy.

Direct workers to act. "Work is theater, and every business is a stage," Pine said. Every worker, from the receptionist to the CEO, affects the patient experience, and each employee should know his or her part to play.

Mass customize offerings. Businesses need to learn how to customize customer experiences while staying efficient, he said. While each patient may receive a similar service, minor customizations can make the experience unique and more meaningful.

Go beyond experience. The next economic stage that Pine envisions is a "transformation" economy, in which businesses not only provide good experiences, but life-changing ones. Healthcare is perfectly suited for this model, and hospitals that are able to create a transformative connection with patients will win long-term loyalty, he said.

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