Report: Health care providers should consider loyalty programmes

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By: RickFerguson |

Posted on March 22, 2016

Writing in the online medical journal Stat, three MD researchers at the Institute for Healthcare Policy and Innovation at the University of Michigan, Ann Arbor argue that it's time for health care organisations to adopt consumer marketing tactics such as loyalty programmes to improve retention among existing patients and drive such positive outcomes as differentiated services and word-of-mouth referral. It's an interesting and perhaps inevitable suggestion - but how would the economics of such programmes work?

The authors point to the the rise of accountable care organisations making it easier for individuals to change health care providers. Money quote #1:

"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."

The authors point out the obvious and well-known benefits to businesses of consumers loyalty programmes: increased retention, the brand insulation that helps mitigate service breakdowns, and positive word-of-mouth. Interestingly, they also point out the such programmes could "help health care organisations create patient-oriented � rather than clinician- or process-oriented care, improve the quality of health care they deliver, and do so at lower cost."

As for what rewards such programmes might offer, the authors mostly describe such soft benefit perks as discounts on hospital parking and food and local partner offers. Interestingly, the article also describes programmes designed to encourage healthy and active lifestyles.

No argument here - but the real trick would be designing programmes in such a way that a) they demonstrated real financial accountability to the health care organisation; and b) did so while respecting the unique ethical considerations involved in rewarding patients for their loyalty. One could imagine a poorly-designed programme leading to such nightmare scenarios as patients seeking out unnecessary care in exchange for rewards. Indeed, such a scenario in Canadian pharmacy programmes led to a British Columbia court banning pharmacy reward programmes in the province.

To design such a programme effectively, rewards would most likely be used to drive patients to make healthier choices and to choose more cost-effective health care services: choosing preventative care options rather than treating acute symptoms, for example, or leveraging online tools to lower administrative costs. Such programmes would deliver ROI based on increasing the patient's lifetime value to the health care provider and through delivering increased referrals. Money quote #2:

"Engaging patients in managing their own health is an important component for the success of accountable care organisations. Loyalty programmes could play a role in such engagement. Add in their potential for improving patient retention, promoting patient-centred care, advancing health and health care quality while lowering cost, and such programmes could make a world of difference."

We like the way the authors think. Better, more affordable health care and stronger relationships between patients and health care providers: what's not to love?

Read the rest of the article here.

- Rick Ferguson

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