Physician Sales and Service Grows as Strategic Component, Competitive Maneuver

CHG Publishes Latest Survey Results

Today, the physician sales function is seen as both a strategic component and a competitive maneuver to help build new referral relationships while strengthening existing ones. Physician retention, growth, satisfaction, engagement and loyalty are taking center stage in organizations with successful physician sales and service strategies.

The CHG study provides valuable insight into physician sales and service relative to budget, staffing, experience, compensation, focus and return on investment (ROI) measures and how those findings relate to best practices and future trends in the field.

The physician sales and service function has become stable within healthcare, as evidenced by the fact that more than one-half of respondents indicated their programs have been in place for five or more years.

The study found that more mature programs provide greater value in terms of meeting long-term referral volume goals, the result of a significant shift in strategic focus and measurable outcomes. Mature programs tend to have lower budgets than start-up departments although they may see budget increases as the result of information system enhancements and human resources expenses.

Although physician sales and service has shifted into a mainstream initiative, it continues to function with limited dedicated human resources. In 2008, there was a 20 percent increase in the number of organizations with four or more full-time equivalents (FTEs), although the majority of programs (40 percent in both the 2005 and 2008 surveys) reported having one FTE. Compared to other hospital departments, physician sales and services staff levels remain small considering their positive impact on key strategic goals.

While compensation continues to vary among respondent hospitals and health organizations, 2008 data indicates a shift to higher base salaries with a decrease in provision of incentive pay. Among those offering incentive pay (36 percent), 71 percent based it on increasing volume, 54 percent on securing new customers and 49 percent on increasing service line volume.

Program focus has shifted since 2005, when 51 percent of programs focused on a combination of growth and retention as their most important strategic focus, followed by physician satisfaction then growth. In 2008, there was more balance across respondents although combined growth and retention continued to be most important.

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Customer service will always be an ongoing goal in healthcare. But with the most recent release of satisfaction data by HCAHPS, it's obvious that there's room to improve right now. With only 67 percent of patients indicating they would recommend their hospital to friends and family, it's time to get to work. (Modern Healthcare, "Comparative Satisfaction," March 31, 2008.)

Is customer satisfaction enough?

Given the increased focus on service throughout all industries today, simply satisfying customers isn't enough. With increased competition, whether from traditional facilities or nontraditional healthcare delivery models, the risk of someone else doing it better and outcompeting on areas beyond quality is very real.

The emphasis needs to shift to delighting the customer. Delight is often called engagement and loyalty, but the key message is that your customer must feel that they would never go elsewhere.

How much does satisfaction matter? According to a 2004 study by the Healthcare Financial Management Association, dissatisfaction most certainly does carry a cost:

• For every one customer who complains, 20 dissatisfied customers don't. The other 19 go away; you don't even know that you've lost them or why-until your numbers start to fall.
• Of those dissatisfied customers who don't complain, 10 percent will return, but 90 percent won't. The latter leave and tell eight to 10 others about their bad experience.
• Changing a poor customer service image takes 10 years, on average. Imagine the cost and time lost once a poor customer service image is in place.
• About 10 percent of revenue is lost to poor customer service. Add 10 percent to your own bottom line to get a sense of the magnitude of this number. Now that makes it real!

The value of taking the time not only to satisfy, but to delight the customer has never been more apparent. This doesn't have to be a difficult or expensive step. Indeed, this isn't about spending capital resources: It's about understanding your customer base and being consistent in doing the things that make a difference to that customer.

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