Can Customer-Centricity Cure Runaway Healthcare Costs?


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If you’ve had surgery in the U.S. lately, you already realize hospitals are hell-bent on improving internal process. Mitigating risk—not doing the right procedure on the wrong patient or the wrong procedure on the right patient—has become a near obsession. So has sanitizing everything touching the patient, including exacting hand-washing procedures. And data sharing within (but not across) healthcare systems continues expanding.

But all these and more new internal improvements are primarily designed to lessen regulatory and legal exposure and cut costs. Customers are the lessor concern.

I very deliberately say “customer-centric” where you might expect “patient-centric.” Over the years, I’ve developed a near-gag reflex over the term “patient.” I won’t use it. Instead, I get blank stares when I respond to, “Are you Dr. Jones’ patient” with, “No, I’m Dr. Jones’ customer.” And I’m not playing head games, although it’s fun to watch the reactions. “Patient” describes a lord-vassal relationship, where one side orders the other around, and the other doesn’t dare question, much less object. We have to mitigate this imbalance for healthcare to heal itself.

Putting on a customer “face”

I actually did have shoulder surgery last month, and among the “read it while you wait” brochures shoved into my hands were two glossies encouraging patients to “take charge of their own healthcare” by staying informed and asking questions. Sounds very customer-friendly. But asking questions stops far short of “questioning,” getting a second opinion, or even saying “no” when appropriate. Informed customers—unlike empowered customers—are still easy marks for unnecessary procedures, overtreatment, questionable treatment and even outright incorrect treatment, which is the antithesis of customer-centric.

Am I overreacting? Let me cite several eye-opening examples of customer-unfriendly healthcare I’ve personally experienced.

  • Recommendations for unnecessary surgery
  • Refusal to authorize a sleep apnea test by a doctor who doesn’t believe in them
  • Dental surgery by an unqualified dentist (who I subsequently named “Idi Amin”)
  • Recommendations for very expensive and very unnecessary dental work
  • An erroneous diagnosis of hepatitis-c, caused by switching lab results

And I could go on. This stuff happens at an alarming rate and sometimes on a grand scale. Do you believe there’s a medical reason why OB/GYNs in some regions perform C-sections at twice the rate of other regions? I don’t. Nor do I believe there’s a rationale for Medicare treatment costing twice as much as the national average in Brownsville, Texas—or some physicians performing astronomical numbers of tonsillectomies compared to national averages. And the beat goes on.

Broken beyond repair

How broken is the U.S. healthcare system? Consider these widely acknowledged conditions.

This is abjectly poor performance, unless you’re a doctor, hospital administrator, insurance company, device company or drug company. Our system is skewed towards meeting their financial needs, not customers’ healthcare needs.

Just today I read new data from Duke University Clinical Research study reporting that 22.5% of defibrillators implanted are in inappropriate patients who they don’t benefit—and worse yet people they can harm or even kill. The report stated that a considerable percentage of doctors implanting this device don’t know or understand the “when to” and “when not to” guidelines. Of course, the device reps sure aren’t going to correct that and cut sales.

Provider mentalities like these are how we wind up with a system we can’t afford providing healthcare we can’t accept.

How would a customer-centric healthcare model reduce costs (and raise quality)

Virtually all organizations looking to seriously reduce costs will look first at internal process, including organizational design and staffing. However, as the more progressive elements of the process industry have discovered over the past 15 years, letting customer wants and needs drive process design—starting with points of customer involvement and working inward (often called “outside-in” process)—eliminates far more cost than conventional, cost-cutting process design. Why? Because customer-centric process doesn’t start with “what is.” It starts with what customers need and want. Which is akin to starting over and designing ideal customer process rather than streamlined versions of what’s much less than ideal.

Letting customer wants and needs drive process design eliminates far more cost than conventional, cost-cutting process design.

Traditional cost-cutting, risk mitigating, efficiency-driving process redesign focuses on how work is done. But meeting customer needs and preferences almost always requires changing what work is done, who (functionally) does it, and the underlying technology that will enable customer-driven what, who, and how. In healthcare, rather than just streamlining and perhaps automating current tasks, customer-centric process design will help determine: the most and least effective procedures; which procedures are best used when; who should manage these procedures (physician, PA, nurse, generalist, specialist, hospital, clinic); how to inform and automate both decision-making and task management – as well as how to work.

Designing work around customers expands opportunities to have the right person (or facility) do the right work at the right time with the right support, with no wasted motion or unnecessary complexity—and preserving only value-adding administrative functions. Healthcare is rife with wasted motion, unnecessary complexity and bloated administration.

What would customer-centric healthcare look like?

Here’s a sampling of customer-centric processes and policies contrasted with what’s happening today.

Obviously, this is a very abbreviated list of customer-centric possibilities, and we could work from several alternative customer-centricity models. But implementing only these changes would produce dramatic effects.

Outcomes of customer-centric healthcare

Adopting only these customer-centric concepts would change the face of healthcare as we know it in the U.S.

The scale of these benefits is so high it begs the question: “Why not just do it?”

The politics of changing healthcare

We’ve managed to turn U.S. healthcare into such a political football that all factions have lost rationality and objectivity. For example:

  • Single payer system: If we convert our current insurance reimbursement system into a single payer system we’ll transfer all our current dysfunction over to a new payer. That’s about all.
  • Socialized medicine: The 2010 healthcare legislation the Democrats passed has nary an element of socialized medicine. In fact, it eliminates the most socialistic aspect of our current system—spreading the cost of treating non-insured people across the entire insured consumer base. The problem with the legislation is that it’s trying to change outcomes without looking under the hood to see what’s driving outcomes—the requisite first step for designing a customer-centric “to-be.”
  • Local control: A good way to say good-by to best practices and encourage local and regional disparities, which are about profits far more than healthcare.
  • Death panels: Paying a doctor to sit down with willing customers to discuss their end of life treatment invests not only in quality of life for customers and their families but will greatly lower unwanted end-of-life treatment. What’s not to like?
  • Preserving free markets: Healthcare will never be “free market” until we stop insurance companies, profit-motivated physicians, drug companies, medical device companies and others from artificially inflating healthcare costs.

Getting off the dime

Up until now, we’ve been missing the objective, reasoned discussion needed to identify that putting healthcare customers first is the best and perhaps the only way to design our way out of our current mess. Government is far too fractionated to produce rational thought. Academia is trying to build new models (I have some first-hand exposure to work underway at University of Minnesota). But academia has far less clout than needed to trigger change, rather than just guide it. Customer anger may help move healthcare off the dime, but most customers remain too subservient to question—much less demand better.

Where will the “big push” towards customer-centricity come from, if at all? Provider self-interest, in all likelihood. When providers (as opposed to all the peripheral players) realize they’ll benefit competitively and financially by adopting customer-centric practices, they’ll start changing. Plus, the provider community would much rather change itself than told how to change by government.

Provider recognition of “what’s in it for them” to go customer-centric may seem a long way off. But perhaps it’s not. Sometimes just one hand grenade thrown into the right pocket will get industry leaders up and moving. In the interim, we have to keep writing, speaking, challenging criticizing—and constantly reinforcing the “what’s in it for them” to healthcare providers. Then, with a push from government and another from academia we might see success sooner rather than later. We’d better see it because our current system is too expensive and broken to let continue.


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