Orthopedists should strive to offer an experience in health care

Practices that go the extra mile to provide a positive experience will also gain patient loyalty.

Innovations can come in many forms, and sometimes there will be a new approach and mindset that can be adapted from other industries.

In this month’s installment of the Emerging Technology & Innovation column, B. Joseph Pine II and James H. Gilmore, co-founders of Strategic Horizons LLP of Aurora, Ohio, introduce the concept of the “Experience Economy” in health care and show how orthopedic surgeons stand to gain from offering patients an orthopedic “experience,” rather than simply a “service,” an “operation” or an “office visit.”

Anthony M. DiGioia III, MD
Emerging Technology & Innovation Editor

The forces of commoditization grow stronger every day in health care, especially as the government places more pressure on cost containment, HMOs practice greater control over clinical pathways, and consumers gain increased access to information about their conditions, options and the quality of doctors and facilities. As a result, doctors increasingly have to sell themselves on price.

Anthony M. DiGioia III

However, consider a true commodity: the coffee bean. Converting its futures price to a per-cup basis, we find that those who treat coffee strictly as a commodity receive only about 2 or 3 cents per cup. That’s it. When a manufacturer roasts, grinds, packages and puts those same beans in a grocery store, thus turning them into a good, the price jumps to between 5 and 25 cents a cup, depending on brand and package size. Brew the ground beans in a vending machine or run-of-the-mill diner, corner coffee shop or bodega and that service now sells for 50 cents to a $1.25 per cup.

So, depending on what a business does with it, coffee can be any of three economic offerings — a commodity, good or service — with three distinct ranges of value that customers attach to the offering.

But wait: Serve that coffee at a Starbucks – where the ordering, creation and consumption of the cup happens with a sense of theater and within an engaging environment where people want to hang out – and consumers gladly pay anywhere from $2 to $5 for each cup.

Businesses that ascend to this fourth level of value establish a distinctive experience that envelops the purchase of coffee, increasing its value (and therefore its price) by several orders of magnitude over the original commodity.

B. Joseph Pine II

James H. Gilmore

The Experience Economy

Experiences are a distinct economic offering, as distinct from services as services are from goods, but one that – until recently – went largely unrecognized. When someone buys a good, he receives a tangible thing; when he buys a service, he purchases a set of intangible activities carried out on his behalf. But when he buys an experience, he pays for a memorable event that a company stages to engage him in an inherently personal way.

Companies in industry after industry recognize the need to stage experiences for their guests. Manufacturer American Girl opened a number of retail places: not stores, but true experiences, with admission-free cafes, photo shoots, hair salons and even doll hospitals.

Retailer Recreational Equipment Inc. (REI) erected climbing walls inside many of its establishments and charges guests $15 ($5 if they are a member of the REI co-op) to climb them. Some stores have cross-country ski or bicycle trails, rain rooms, walking paths with different surfaces for testing shoes, and, in Denver, a kayaking experience.

And then, of course, there is the world’s premier experience stager: The Walt Disney Company. Go to any of its theme parks and you’ll see the Experience Economy in action. Sure, you’ll buy manufactured goods such as Mickey Mouse hats and T-shirts, and you’ll receive delivered services such as food and photographs, but the reason you pay the huge admission fee is to have a wonderful, engaging experience with your family that you’ll talk about for weeks, months and maybe even years afterward.

Health care experiences

Because of the forces of commoditization that beset the industry, a lot of hospitals are innovating new experiences.

North Hawaii Community Hospital in Kamuela, Hawaii, created a “total healing environment” – a place to get well, rather than a place to be sick. And a wonderful environment it is: Patients can select the artwork that goes on the walls, while every room opens to a courtyard garden. Started by Medtronic co-founder Earl Bakken, North Hawaii Community combines high-tech conventional methods with high-touch complementary treatments, centered on holistic therapies from Hawaiian tradition.

Baptist Health System in Florida moved to the top of the Press-Gainey customer satisfaction charts through activities such as employee on “scripting” and “wow” teams (who are charged with finding ways to “wow” patients). The system has enjoyed a significant increase in market share as well as a reduction in liability and risk, as patients who enjoy positive experiences tend to sue their health care providers less frequently.

The Fresno Surgery Center provides a comfortable environment in a nonhospital setting, which research shows helps patients heal faster. Rooms feel like home, meals taste as if they come from a fine restaurant, and the management has been trained by the Ritz-Carlton to provide exceptional, personal attention. Not only is every patient called a “guest” and treated as such, but so are family members, who are invited to stay overnight whenever they want.

Mid-Columbia Medical Center in The Dalles, Ore., took as its theme the three-word Planetree philosophy: personalize, humanize, demystify. Every decision from the board on down is based on whether it better personalizes, humanizes or demystifies the experience, yielding a place that feels more like a bed-and-breakfast inn than a cold, antiseptic hospital. Its Celilo cancer center has drawn guests from more than 25 different states.

Finally, Sharp Health care in San Diego recently won the Malcolm Baldrige National Quality Award for its focus on process improvement that yields a better patient experience. In endoscopy, for example, juice is provided in stemware, on a silver platter, to fulfill its theme of five-star service, and throughout the system, every patient receives a personal thank-you note from someone who touched them in their care.

Not all experiences are good

Staging experiences greatly increases the value rendered to guests, and therefore forestalls the forces of commoditization. But everyone in health care must beware of a fundamental axiom: The easiest way to turn a service into an experience is to provide poor service, thus creating a memorable encounter of the most unpleasant kind. And the surest way to provide poor service is to treat individual patients via rote, impersonal activities that sacrifice patient need on the altar of doctor efficiency.

You can stay in the illusory safety of past practices and keep on doing the same things you’ve always done, in which case you, too, will be commoditized. Or, you can go beyond mundane services to engaging health care experiences, in which case you will be economically rewarded.

For more information:

• B. Joseph Pine II and James H. Gilmore are co-authors of The Experience Economy: Work Is Theatre & Every Business a Stage as well as Authenticity: What Consumers Really Want. They co-founded Strategic Horizons LLP of Aurora, Ohio. They can be reached by e-mail: Pine&Gilmore@StrategicHorizons.com, or 330-995-4680.