If you are at all like us, the odds are good that you have a loyalty card to buy coffee, groceries, or hardware, or plug in your frequent flyer number when booking flights. Health care organizations haven’t adopted such customer loyalty programs, but they should.
By taking part in loyalty programs, customers get free or discounted stuff and other bargains. But the real beneficiaries are the companies offering these programs. They gain in three main ways:
- Customer retention. It costs more to attract new customers than it does to hold onto existing ones.
- Customer goodwill. Receiving perks tends to lessen the sting of a bungled order or slow service.
- Word-of-mouth advertising. People who take part in a loyalty program are more likely to say good things about the company and spread the word about it.
Health care organizations, from small physician practices to large medical centers, could take a cue from commercial loyalty programs.
The rise of accountable care organizations makes it relatively easy for individuals to move from one physician group or hospital to another. And move they do. One study showed that more than half of patients in a Medicare demonstration physician group practice moved between physician and care settings during a five-year period. That represents a significant loss of patients.
As we write in JAMA, loyalty programs might help stem that flow. At the same time, they could help health care organizations create patient-oriented — rather than clinician- or process-oriented — care, improve the quality of health care they deliver, and do so at lower cost.
Perks could include vouchers for free or reduced-cost parking or transportation, free or discounted food in the cafeteria, and lower rates for health-related items at nearby restaurants and hotels. They could also include targeted offers from gyms, pharmacies, medical supply companies, and the like. The focus of these efforts is centered on keeping patients healthy in ways that hospitals and health systems traditionally have not explored.
These perks could pay off in several ways. By enticing patients to get their care from inside the organization, instead of going to nonaffiliated clinicians or medical centers, a loyalty program could help an accountable care organization save money by limiting the number of patients seeking more costly or clinically inappropriate care. Patients who feel rewarded by a loyalty program may also be more likely to overlook shortcomings in the organization like difficulty getting an appointment, tardy test results, or trouble parking and report better satisfaction. They may also be more likely to recommend a practice to their family and friends, or promote it on social media.
Skeptics say that the main driver for patients is the quality of care they receive. They will put up with long waits in the doctor’s office or at the pharmacy, poor communication, and more, so the thinking goes, in exchange for excellent care. That argument might hold water if patients were able to compare the quality of care they receive with the universe of care available, but that is a difficult thing to do. In fact, many patients tolerate process-related difficulties because they are loyal to a clinician, something that a rewards program could further capitalize on.
Designing health care loyalty programs must be done with care. They should base rewards on true loyalty to the health care system, not on the number of health care visits or hospitalizations. Such programs should make benefits accessible to all patients regardless of income. Doing so may even lower barriers to accessing health care services by those with modest means.
Engaging patients in managing their own health is an important component for the success of accountable care organizations. Loyalty programs could play a role in such engagement. Add in their potential for improving patient retention, promoting patient-centered care, advancing health and health care quality while lowering cost, and such programs could make a world of difference. We would join one. Would you?
Laurence F. McMahon Jr, MD, Renuka Tipirneni, MD, and Vineet Chopra, MD, are with the Division of General Medicine and the Institute for Healthcare Policy and Innovation at the University of Michigan, Ann Arbor.