“New Growth Paradigm for Indian Health-care Providers” : “Power to a Patient’s needs”| BCG

Historically, Hospitals in India had no problem filling beds. The majority operated at OR near capacity most of the time, mainly because there weren’t enough beds to meet patient demand. But for an increasing number of hospitals, this may no longer be the case. 

In recent years, Indian Health-care providers have invested heavily to build capacity, and this has benefited both patients and hospitals tremendously. In the last Five Years alone, Top hospital chains have tripled their capacity to serve urban patients, and—largely as a result of these efforts—their revenues have quadrupled.

In some of India’s urban centers, there are now ” 3.3 beds per 1,000 people, which is close to the standard of 3.5 per 1,000 set by the World Health Organization” (and which exceeds the world average of 2.9 per 1,000)..

As the shortfall disappears in some markets and supply and demand come into balance, the basis of competition for providers is shifting. Patients will increasingly be able to select hospitals based on their needs and preferences. Growth in these markets will therefore depend on the ability to understand and meet patients’ diverse needs, and providers that continue to add capacity without differentiating their value propositions will reap diminishing returns.

Most providers, however, have NOT yet figured out how to identify the factors that drive patient behavior or increase satisfaction in this new health-care environment. They may not fully understand why patients select one hospital over another in the first place, and many have yet to develop deep insights into the factors that foster satisfaction over the course of inpatient or outpatient care. Thus, even those providers that focus on improving the patient experience often invest in areas that are not high priorities for patients.

The challenge is compounded by a number of factors, including patients’ tendency to rely on friends or family members when selecting a hospital. Patients are also becoming more like consumers in other industries, demanding better value for their money and requiring services that address more than their immediate medical concerns.

To help providers win in this environment, BCG’s Center for Consumer and Customer Insight, surveyed nearly 1,000 Indian patients to identify the factors that drive patient satisfaction in health care. These interviewees—men and women of all ages with diverse socioeconomic and other demographic profiles—received care from seven of the top private hospital chains operating in 19 urban areas. We asked a variety of questions about their perceptions of and experience with providers across the care continuum. It was the first research effort of its kind ever conducted in India.

The “Survey enabled us to identify FOUR Broad drivers of patient satisfaction : Medical Expertise, Pricing & Process Efficiency, Care & Patient Comfort, and Facilities”. Based on this taxonomy, we derived SIX Insights that providers can use to ensure that their value propositions meet patient needs.

Drivers of Patient Satisfaction :

We identified 21 attributes that disproportionately shape satisfaction with hospitals among Indian patients. We used factor analysis techniques to group these attributes into FOUR Categories and to estimate the relative importance of each as a percentage of the potential contribution to overall satisfaction. (See Exhibit 1.)

1. Medical Expertise – Correct diagnoses, Doctor competence, the perceived overall quality of treatment, and clear communication with patients and family members contribute 33 percent to patient satisfaction. Indian patients cannot use outcomes data to assess medical expertise, because most hospitals do not track or share this information. Before the first visit, patients usually base their assessment on recommendations from their general practitioner, family doctor, or family and friends. Once they begin to receive care, they assess medical expertise on the basis of factors such as the accuracy of the diagnosis and the quality of their interactions with medical professionals during pre-treatment counseling.

2. Pricing & Process Efficiency – Pricing and logical, frictionless service delivery contribute 30 percent to satisfaction. Value for money, pricing transparency, and billing accuracy are the primary factors affecting satisfaction with pricing. Process efficiency depends on such factors as timely completion of admissions and checkout and prompt administration of medical tests.

3. Care & Patient Comfort – The level of attention to and regard for patients’ treatment experience contribute 25 percent to satisfaction. A hospital’s performance on care and comfort is affected by a variety of factors, from the concern shown by doctors and the efficiency with which nurses provide medications to the overall attitude of medical staff. Patient satisfaction also depends on whether doctors visit them regularly and whether staff responds immediately and efficiently in cases of emergency.

4. Facilities – The condition of buildings and the availability of basic services contribute 12% to satisfaction. Satisfaction with facilities depends on whether the hospital meets high standards of cleanliness and hygiene. Patients also require hospitals to provide basic services such as parking, clean drinking water, and cafeterias and other food options for visitors and to maintain a generally pleasant environment.

“SIX Insights” into Patient Needs :

The insights that we identified reflect the priorities that patients will act on with increasing frequency, particularly as the capacity shortfall fades in many markets. Providers that deliver on these priorities can build loyalty among their existing patients and attract new patients from providers that fail to meet expectations. Thus they can maintain and extend the gains achieved in recent decades by building new facilities and expanding existing ones.

1. Medical expertise, more than patient satisfaction, affects hospital selection – When selecting a hospital, patients prioritize medical expertise above all other factors except institutional quality (see “Institutional quality trumps doctor reputation,” below). Even in tier 2 and tier 3 cities, patients rank medical expertise above proximity and pricing as a criterion in hospital selection. However, Indian patients usually lack access to the information needed to assess the expertise of health care professionals over the course of care, and their satisfaction with the care they actually receive is often shaped most by factors not directly related to providers’ medical expertise.

2. Process excellence is essential – Over the course of care, non-medical factors are as important as medical expertise in shaping patient satisfaction. Efficient and caring service is critical. Efficiency has to do with the ability to get things done within a reasonable period and with a minimum of inconvenience. Patients should not have to wait too long to undergo a procedure, and nurses should deliver the right medications on time. Satisfaction also depends on the ability to carry out basic business functions quickly and easily. Patients should not be required to wait for long periods to be admitted or checked out of a facility, and billing should be transparent, accurate, and timely. This kind of professionalism is important because patients are likely to question an institution’s commitment to excellence if they are not treated appropriately during every interaction, administrative as well as medical.

Caring service is about friendliness and concern for patients’ comfort and well-being. In certain respects, caring service is a process issue because it can be manifested through consistency and good customer-care procedures. Doctors should visit hospital patients regularly, and nurses and staff should treat them with compassion.

3. Pricing transparency rivals price – Satisfaction regarding price hinges on clearly communicating the cost of service. Patients are often sensitive about price but may be less so when told in advance how much a procedure or service costs. They typically prefer itemized bills that show the cost of each element of care. Surprises give people the sense that pricing is arbitrary; a patient may be pleased when something turns out to cost less than expected, but this may not increase satisfaction as much as receiving accurate pricing information at the outset.

Billing must also be accurate and timely, and patients should have an easy means of communicating directly with facility representatives about bills and payments. Billing staff should be friendly and willing to help, approaching every interaction as an opportunity to increase satisfaction.

4. Focus on the Basics – Luxuries have little effect on satisfaction levels, but patients expect providers to meet basic standards of service. Most important, facilities must be hygienic and tidy, surfaces and equipment clean and sanitary, and hallways and rooms uncluttered and well lit. As noted above, patients also demand that hospitals provide basic conveniences such as parking spaces and clean drinking water. And there should be comfortable waiting rooms with televisions for visitors, as well as clean restrooms and affordable food options.

Patients do enjoy services such as free Wi-Fi and gourmet food options, but they don’t view these as necessities. Providers that offer beyond-the-basics services get little return on their investment and should reallocate resources to stronger drivers of satisfaction, such as improved clinical outcomes.

5. Institutional quality trumps the reputation of doctors – Hospital reputation is the most important factor affecting patients’ decision about where to go for care. This is probably because reputation is a function of a hospital’s performance in the areas that matter most to patients. In fact, building a hospital’s brand is a more effective way to drive loyalty than hiring star doctors. Our research indicates that 90% of patients who select a hospital based on its reputation are likely to return to the hospital for care in the future, whereas only 75% of those who make their selection based on doctor reputation are likely to return.

This highlights a big opportunity for providers. Most hospitals have focused on assembling and maintaining a roster of well-known doctors, which can be a good way to attract first-time patients but is less effective in building loyalty. Moreover, few hospitals have made a concerted effort to differentiate their brand from those of competitors, and most patients do not perceive hospital brands to be very different from one another. Hospitals can increase loyalty by differentiating their brands on the basis of those attributes that matter most to patients—including medical and non-medical processes that deliver a consistently superior experience across medical conditions and facilities.

6. Personal referrals reign, but the role of the Internet is increasing – Patients rely heavily on personal recommendations when selecting a hospital. Recommendations from trusted general practitioners are the most influential, but patients also put great stock in the experiences of family members and friends. Not surprisingly, many patients continue to see doctors with whom they have had a positive experience.

But almost as many patients now rely on the Internet as rely on such recommendations. Patients regularly check providers’ websites to research facilities, and many search online for information about diseases and medical terms. Hospitals are moving to the Internet at an accelerating pace, hosting patient forums and allowing patients to make appointments online. The use of mobile services is expected to increase rapidly in India, and online recommendations are likely to become more important as a result.

Building a Consumer-Centric Value Proposition :

To differentiate their value propositions and strengthen their brands, providers should develop a clear understanding of their performance relating to the attributes that most affect patient satisfaction. They should also prioritize high-impact areas where delivering superior value will strengthen their relationships with patients and build a competitive advantage.

Our research suggests that Indian Health-care providers should consider prioritizing “Medical Expertise, Process Efficiency and Care & Comfort “.

The health-care sector in India is entering a new, consumer-centric era that will profoundly alter the competitive dynamics among providers. The increasing emphasis on patient satisfaction will be an engine for continuous improvement that will benefit patients and society, while enabling providers to establish sustainable competitive advantages. In the coming years, Indian providers that develop differentiated value propositions rooted in deep consumer insights will set a new standard for success in the country.

They will grow by cultivating lasting relationships with patients and winning share from players that fail to prioritize patients’ needs. In the process, they will catalyze a new phase of development in India’s health-care market..


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