The Patient Experience – an Epic Shift of Thinking

August 10, 2016 Phil C. Solomon


The Colossal Shift from Fee-For-Service to Value-Based Reimbursement 

EpicAnyone who has followed the healthcare industry over the past few years understands the transition that is underway moving from the traditional fee-for-service (FFS) model of reimbursing providers for delivering care where physicians and organizations are incentivized to do more and provide more services.  Under this economic model, a provider can make more money by ordering more tests, see more patients and perform more procedures.

The behemoth change to value-based reimbursement (VBR) has turned the traditional reimbursement model on its head, creating a new paradigm for the how providers bill for the services they deliver.

Instead of provider compensation being calculated by the number of visits and tests they order (FFS), their revenue is now centered on value-based-care (VBC) and result-based payments.  Frequently, VBC is commonly referred to as “the value equation“: quality over cost over time.  This systemic adjustment has materially altered the relationship between the patient, provider, and the payer.  The health industry is now becoming more like a traditional customer-centric business.  The consumer (patient) and the change to healthcare consumerism is now king.  The voice of the consumer is becoming increasingly more important in the delivery of care.

Unlike at any time in our healthcare system’s history, healthcare providers focus on improving the patient experience (PE) through better care, improved clinical outcomes, open pricing for services, more sensitive patient engagement and overall better patient satisfaction.  For patients, this means safe, appropriate, and effective care with enduring results, at reasonable costs.

This overarching change is now focused on reducing overall healthcare costs, lowering consumers cost for care and improving quality and results.  The structural shift is driving innovation across the entire healthcare continuum.

Under this new system, providers are evaluated by the value and outcomes of care.  This process takes into consideration a wide variety of quality measures.  These new value-based models require that providers to demonstrate they are attaining the appropriate quality thresholds that benefit patients while also cutting the cost of care.  A lot of today’s value-based incentives—and penalties—rely on quality measures.  The transition to this new reimbursement model is easier said than done.  The transition from FFS to VBR is a complicated process and will transpire over many years.  There are no validated estimates of how long this transition will take.

For several years, providers have been required to submit quality measures to The Centers for Medicare & Medicaid Services (CMS) for programs such as Hospital Inpatient Quality Reporting (IQR), Hospital Outpatient Quality Reporting (OQR), and Physician Quality Reporting System (PQRS).  The measures providers have to comply with tie to penalties and incentives.  This is a new paradigm.  Providers now need robust analytics to quantify the financial and quality performance for each population of patients.  To achieve this, they require measuring performance on an ongoing basis.  If they are not meeting quality standards, they need to be able to quickly identify the cause and make changes to mitigate the issues.  For those providers and health systems that cannot achieve the required scores, the financial penalties and reduced reimbursements will create a significant financial burden.

The Role of the Affordable Care Act and Increased Consumerism

The Affordable Care Act (ACA) has been the catalyst for the transformation of the healthcare industry.  With the ACAs mandate for improving the quality of care, health organizations are expected to streamline the process of delivering care and improve its results.  Delivering the best service and outcomes and delighting the patient with an exceptional experience matters more now than ever before because there are significant reimbursements at stake.

“It has been almost a decade since the Institute of Medicine (now called the Health and Medicine Division) designated “patient-centeredness” as one of six goals for a 21st century health care system; the ACA has required the use of measures of the quality of care, public reporting, and performance payments that reflect this ambitious aim.”1

A paper from the Urban Institute’s Urban Quick Strike Series, on behalf of the Robert Wood Johnson Foundation said “The ACA repeatedly refers to patient-centeredness, patient satisfaction, patient experience of care, patient engagement, and shared decision-making in its provisions.  Even when the law only uses the more general term “quality measures,” patient-centered assessments are being required for specific programs such as with Medicare’s Value-Based Purchasing Program (VBP).”

Apparently, there is growing evidence from providers of benefits from better communication between providers and patients, and involving patients more closely in their care, including greater adherence to medical advice, fewer complaints, and improvement in patient health.  These observations demonstrate how the VBR and VBC programs create value for the patient.

A Good Patient Experience Equals Great Patient Satisfaction

The consumer is speaking, and the patient experience matters.2

The Beryl Institute’s 2015 Benchmarking Study highlights the growing trend committing resources to improving the patient experience as a new foundation for healthcare.  A cross section of over 1,500 individuals from various demographic populations participated in the study.  When asked to what extent is the patient experience important as a consumer of healthcare and how significant are those experiences when making healthcare decisions, the results were overwhelming.  Almost 90 percent responding said the patient experience was extremely important.  These results send a clear message that there is an increasing cognizance of the consumers’ role as an active participant in their care.

The Beryl Institute defines the patient experience as: “the sum of all interactions, shaped by an organizations culture, that influence patient perceptions across the continuum of care- organization’s shaped by an that influence patient across the of care.”  To develop the Institute’s definition of patient experience, they formed a work group of patient experience leaders from various healthcare organizations.  The group shared perspectives, insights, and backgrounds on what patient experience means to them and collaboratively created this definition.

Healthcare organizations are taking steps to improve the patient experience and are applying the methodology and definition of PE outlined by The Beryl Institute.  At Dimensions Healthcare System, Nicole L. Bailey, Director, of Patient & Guest Experience said “Our adoption of the definition has provided significant breakthroughs in all of our patient experience initiatives.  It provides a solid foundation as PE is woven into the fabric of our culture.”

Dimensions Healthcare System is not the only provider pursuing PE.  Paul Clarke, the Patient Experience Manager at NCH Healthcare System was quoted as saying “The definition of PE will allow me as a driver in improving the patient experience at our organization to include those key elements (interactions, current culture, perceptions, across the continuum of care) in our discussions to encourage a more integrated, quality experience that exceeds the expectations of each patient.”

Measuring Quality

Since the inception of VBP, the measurement of effective patient care delivery is critical to the success of health enterprises.  The move from FFS to VBR also means that reimbursements tie to the quality of care.  Hospitals that provide a higher quality of care than their peers will receive reimbursement incentives, and hospitals that provide a lower quality of care will experience severe penalties.  The quality of care measurement breaks down into two measurements: patient outcomes (70 percent) and patient satisfaction (30 percent).3

With patient satisfaction scores now having a critical bearing on reimbursement, managing patient satisfaction across the enterprise is the highest priority at healthcare organizations throughout the nation.  In fact, according to HealthLeaders Media’s 2013 Industry Survey data, 54 percent of healthcare executives say patient experience and satisfaction is a top priority.4

The Patient Protection and Affordable Care Act of 2010 (P.L. 111-148) includes Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS) survey’s as an instrument and data collection methodology for measuring patients’ perceptions of their hospital experience.

CMS publishes participating hospitals’ HCAHPS results on the Hospital Compare website ( four times a year.  Based in part on these scores, hospitals could have lost or gained from up to 1.5 percent of their Medicare payments in fiscal year 2015 and will have two percent of their reimbursement dollars at risk by fiscal year 2017.

Another public quality measurement is The Consumer Assessment of Healthcare Providers and Systems (CAHPS) program.  It is a multi-year initiative of the Agency for Healthcare Research and Quality (AHRQ) to support and promote the assessment of consumers’ experiences with their healthcare.  The goals of the CAHPS program are twofold:

  • Develop standardized patient questionnaires that are used to compare results across sponsors and over time; and
  • Generate tools and resources that sponsors can use to produce understandable and usable comparative information for both consumers and health care providers.

AHRQ first launched the CAHPS program in October 1995 in response to concerns about the lack of good information about the quality of health plans from the enrollees’ perspective.  At that time, numerous public and private organizations collected information on enrollee and patient satisfaction, but the surveys varied from sponsor to sponsor and often changed from year-to-year.

Over time, the program has expanded beyond its original focus on health plans to address a range of health care services and meet the various needs of health care consumers, purchasers, health plans, providers, and policymakers.  The program is currently in its fourth stage, referred to today as CAHPS IV.

The Patient Becomes a Consumer – An Epic Shift

Patient satisfaction is an important gauge for determining the quality in healthcare.  The level of patient satisfaction is a very effective indicator to evaluate the quality of care providers provide their patients.  Previously, the financial model for healthcare transpired between a payer and provider.  That model mirrors a traditional business-to-business (B2B) transaction.  The ACA and the advent of the State Insurance Exchanges have driven the creation of high-deductible health plans which puts more financial onus on consumers to pay for their care.  This is shifting the economic responsibility to the consumer creating more of a business-to-consumer (B2C) model.

The enterprises that understand how patient satisfaction creates value benefits in a number of ways.  They are:

  • Increased customer (patient) loyalty;
  • Improved patient retention;
  • Consistent profitability or financial viability;
  • Increased staff morale with reduced staff turnover; and
  • Increased personal and professional satisfaction for the provider and the patient.

At the most basic level, patients want to be treated professionally with care and understanding.  To drive excelled patient satisfaction, providers need to:

  • Understanding the patient and their needs;
  • Reduce the inconvenience of wait times;
  • Create a personable provider-patient interaction;
  • Provide clear instructions and educate the patient;
  • Demonstrate problem-solving abilities; and
  • Openly encourage and accept feedback.

The contemporary movement towards improving customer care creates a new millennium in healthcare.  Good clinical outcomes are no longer the only measurement of patient satisfaction.  Creating a positive patient experience is gaining momentum, as one of the most important initiatives hospital and health systems are pursuing.


Today’s provider must strive to achieve the highest level of patient satisfaction to remain competitive in the rapidly changing healthcare ecosystem.  Creating a great patient experience is no longer an outlying issue in healthcare.  It is an industry imperative.

Patient satisfaction is only an indirect determinate of the quality of a provider’s interaction or a hospital’s performance.  The delivery of patient-centric care requires more than just providing health services in a particular way.  Satisfactory patient interactions cannot happen now and then or frequently; they must happen with every patient every time.

Every health organization needs to engage their employees to create a greater PE with the goal of delivering the utmost in patient satisfaction.  If healthcare providers attain this important objective, the chances of success improve exponentially.

1 Robert Wood Foundation, Will the Affordable Care Act Move Patient-Centeredness to Center Stage?


3 Frequently Asked Questions  Hospital Value-Based Purchasing Program Last Updated March 9, 2012,

4 HealthLeaders Media’s 2013 Industry Survey data

Read this article and more at MiraMed Global Services


Phil C. Solomon is the publisher of Revenue Cycle News, a healthcare business information blog and serves as the Vice President of Global Services for MiraMed, a healthcare revenue cycle outsourcing company.  As an executive leader, he is responsible for creating and executing sales and marketing strategies which drive new business development and client engagement. Phil has over 25 years’ experience consulting on a broad range of healthcare initiatives for clinical and revenue cycle performance improvement.  He has worked with industry’s largest health systems developing executable strategies for revenue enhancement, expense reduction, and clinical transformation. He can be reached at

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