The single most important investment with the best return-on-investment you can make for your medical practice is an investment in your staff.
Let’s say you’re at a cocktail party. Someone walks up to you and says they can tell you the single most important investment you can make in your practice next year. They add to their already astounding statement that this investment will generate a higher return on investment than any other alternative.
Your brain begins to churn through the potential punch lines to this provocative set of statements: Malpractice insurance? EHR? Lobbying efforts to fend off government regulatory pressure? What could it be? Just then, the mysterious stranger delivers the punch line. The single most important investment with the best return-on-investment you can make for your practice is an investment in your staff.
A quick history primer
In the 1990s, a group of researchers out of Harvard developed a different approach to a business model. The researchers included the likes of Earl Sasser, Leonard Schlesinger, James Heskett, and several others. They proved that there was a direct link between employee satisfaction that generated higher quality service delivery, yielding customer loyalty and ultimately creating improved financials. In fact their research went so far as to say that a mere 5 percent improvement in customer loyalty could result in profit increases ranging from 25 percent to 85 percent. They labeled this business model the service-profit chain and it has become the foundation under which much research today surrounding customer loyalty, patient satisfaction, and word-of-mouth referral activity finds its genesis.
The links in the chain start with employees
So, let’s take this intriguing concept one step further and see how this works. It all starts by creating engaged employees. Employees who are passionate about what they do, are well-equipped and well-trained, and have the tools and information needed to perform at a high level every day. By creating these kinds of employee relationships, three important things happen.
First, you see a reduction in the churn rates of your staff. Let’s face it, all that time searching for a new staff member, screening and interviewing them, training them on your practice …all that time is costing your practice money. Much better to find good staff, keep them engaged and keep them onboard. Second, more engaged employees create an environment where practice operations run with excellence. Third, employees who are positive, authentic, and pleasant with your patients create stronger relationships with your patients (thus generating patient loyalty). We all have had that one nurse on staff that patients just adore - that nurse is an economic engine for your practice!
Operational excellence generates loyal patients
Next, when operations are running smoothly your practice begins to generate productivity efficiencies which impact your bottom line. Outstanding operations create superior experiences and interactions for your patients, who then become loyal patients - they stay with your practice, they bring their family, refer others, and they comply with your policies at a higher rate. Having a loyal patient base creates its own virtuous cycle wherein your staff gets to know your patients better and are able to customize and cater to their specific needs more and in turn your patients become “better patients” by learning your policies, procedures and processes.
Loyal patients generate premier financials
Those loyal patients behave in positive ways towards your practice. They refer others. They stay with you longer - even if you move locations or make some change in your practice. They’re less likely to create malpractice issues. They use your services more frequently and they use more of your services to meet their health needs. These are the patients every practice wants because all those behaviors generate positive financial results for you and your practice.
So there you have it. Through a series of cause-and-effect linkages, we’ve seen that an investment in your practice’s employees will yield an improvement in your practice's financial performance.
Maybe our mysterious cocktail party guest wasn’t so wrong after all. Start by improving communication flow in your practice. Identify ways to increase staff training. Ask staff openly if they have the tools and information they need to be productive and effective with patients. Get a dialog started this week in your practice with your staff. How can you create more engaged employees?
Find out more about George Taylor and our other Practice Notes bloggers.