Customer Lifetime Value (or CLV) is not a foreign concept to well run businesses. Especially in consumer facing industries. Knowing how much revenue a loyal customer can bring to your business over time can shine a spotlight on the most important improvements you may need to make to maximize the return on your existing customer base. So, how can you apply CLV to patient experience?
When it comes to Healthcare, it seems no one wants to talk about CLV. Doctors work to heal and keep patients from returning. Readmission is a hot button. Especially as it relates to reimbursements and value based care. However, the reality is that people will need care throughout their lifetime. Return visits will happen; if you deliver the right patient experience. And there is the key. ‘IF’
So how do you know the value of patient experience?
Patients spend on average $10,348/yr on health according to CMS. 52% of that spend is on hospitals and clinical services. So how much is that figure over the lifetime of a patient? What happens to that number if you adjust for the forecasted growth of health spend? Simple answer: a lot. The number gets really big, really quickly.
Recently, the Patientco team developed a formula using data from CMS and a recent census to calculate the CLV of an average patient to help revenue cycle leaders understand just how valuable patient experience is to their organization. Knowing the CLV of your patients can help you focus on the right improvements needed to improve patient loyalty.
Are some investments in patient experience more valuable than others? It could be that the last touchpoint of an episode of care, the patient billing and payment experience, is the easiest to fix and most valuable.
- What a loyal patient is worth to your health system after their bill is paid.
- How to calculate the Customer Lifetime Value of a patient.
- How to leverage CLV to position your health system for success.