The Private Equity Guide to Net Promoter Scores (NPS) in Healthcare

In this article:

• The Economic Impact of Patient Experience
• Deciphering NPS: A Fundamental Metric for Healthcare Excellence
• Why Private Equity Firms Look at NPS
• Five Ways to Grow Your NPS
• Embracing NPS: A Catalyst for Healthcare Transformation

 

Superior patient care not only fosters loyalty, but also significantly impacts financial outcomes. As private equity firms strive to optimize their investments in medical practices, harnessing the power of Net Promoter Scores (NPS) emerges as a pivotal strategy for bolstering brand image, patient loyalty, and overall patient experience.

 

The Economic Impact of Patient Experience

Delving into the core of healthcare economics, the correlation between patient experience and financial performance becomes evident. Studies, such as those conducted by Deloitte, underscore that healthcare providers excelling in patient experience enjoy higher revenues and improved financial outlooks. Moreover, the industry leaders in loyalty witness accelerated growth, outpacing competitors twofold. This symbiotic relationship between exceptional patient experiences and financial prosperity underscores the criticality of prioritizing patient satisfaction within healthcare practices.

 

Deciphering NPS: A Fundamental Metric for Healthcare Excellence

At the heart of measuring patient experience lies the Net Promoter Score (NPS), a ubiquitous metric revered for its simplicity and effectiveness. NPS hinges on a straightforward question: “How likely is it that you would recommend us to a friend or colleague?” Responses, graded on a scale from 0 to 10, are segmented into promoters (scoring 9-10), passives (scoring 7-8), and detractors (scoring 0-6).

The score is calculated by taking the percentage of promoters and subtracting the detractors. The NPS, ranging from -100 to 100, quantifies the sentiment towards a healthcare practice, with scores above 50 signifying excellence.

 

Why Private Equity Firms Look at NPS

NPS has emerged as a quintessential Key Performance Indicator (KPI) for private equity firms navigating the complex terrain of healthcare investments. These firms recognize that NPS serves as a barometer of patient sentiment and satisfaction, offering invaluable insights into the performance of their healthcare organizations. Understanding why private equity firms prioritize NPS unveils a strategic approach to enhancing patient experiences and driving better financial outcomes.

1. Quantifying Patient Experience: Private equity firms leverage NPS to quantitatively measure patient experience and brand perception across their healthcare portfolios. By assessing patients’ likelihood to recommend a practice to others, NPS provides a tangible metric for evaluating the quality of care and service delivery. A high NPS indicates satisfied patients who are more likely to return for future healthcare needs, fostering patient retention and loyalty.
2. Indicator of Operational Excellence: A high NPS often correlates with operational excellence within healthcare organizations. Private equity firms use NPS as a diagnostic tool to identify areas of strength and areas for improvement across various touchpoints of the patient journey. By pinpointing operational inefficiencies or service gaps, firms can implement targeted strategies to enhance overall patient satisfaction and streamline operational processes.
3. Driving Financial Performance: The link between a high NPS and better financial outcomes is indisputable. Private equity firms recognize that satisfied patients are not only more likely to return for additional services, but also serve as advocates who refer new patients to the practice. This influx of new patients, coupled with increased patient retention, translates into improved revenue streams and enhanced profitability for healthcare organizations. Moreover, positive patient experiences contribute to a strong brand reputation, further bolstering the organization’s competitive position and market share.
4. Mitigating Risk and Enhancing Valuation: NPS serves as a risk mitigation tool for private equity firms by proactively identifying potential challenges or vulnerabilities within their healthcare investments. By continuously monitoring NPS scores and addressing any issues that may arise, firms can safeguard against reputational risks and mitigate adverse impacts on financial performance. Additionally, a strong track record of high NPS scores enhances the valuation of healthcare organizations, making them more attractive to potential investors or acquirers in the future.

 

Five Ways to Grow Your NPS

Knowing your NPS is one thing, but to stay competitive organizations must focus on increasing their score. Getting the organization onboard to improve experiences, staying agile, and working to understand the “why” behind patient feedback will help grow your NPS.

1. Design Seamless Feedback Mechanisms: Simplify the patient feedback process by crafting concise, user-friendly surveys that capture essential insights without burdening patients. Focus on understanding the purpose behind feedback collection to tailor patient experience survey questions, and follow-up questions, effectively. Including the option to share quantitative feedback can help uncover hidden experience detractors.
2. Get Employees Involved: Instill a collective commitment to enhancing patient experiences across all levels of the organization. Involve staff in patient experience by sharing positive patient feedback, explaining the reasoning behind initiatives, and asking for input. Employees who understand their impact on experiences and have the opportunity to offer suggestions will help you improve loyalty and your NPS score.
3. Setup Rapid Response Mechanisms: Empower staff to swiftly address patient concerns, integrating real-time service recovery protocols seamlessly into daily workflows. Timely resolution of issues not only enhances patient satisfaction, but also mitigates potential revenue loss.
4. Foster a Culture of Continuous Improvement: Foster a culture of continuous learning and improvement by integrating patient experience discussions into routine employee meetings. Recognize and celebrate employees who excel in delivering exceptional patient care.
5. Embrace Real-Time Feedback Systems: Embrace technology-enabled real-time feedback systems to glean instant insights into patient sentiment. Move beyond traditional, periodic surveys to embrace dynamic feedback mechanisms that facilitate agile decision-making.

 

Embracing NPS: A Catalyst for Healthcare Transformation

NPS is not merely a metric, but a strategic imperative for private equity firms seeking to optimize their investments in healthcare. By leveraging NPS as a KPI, private equity firms can gain deeper insights into patient experiences, drive operational improvements, and ultimately achieve better financial outcomes across their healthcare portfolios.

Partnering with innovative patient experience platforms like Feedtrail enables healthcare organizations to harness the full potential of NPS, leveraging real-time insights to optimize patient experiences and maintain competitive positioning. By prioritizing patient satisfaction and leveraging NPS effectively, private equity-backed medical practices can chart a course towards sustainable growth and enduring success in the ever-evolving healthcare ecosystem.