Emerging Trends in Loyalty and Rewards Programs in Healthcare

July 6, 2016

eHealthcare Pulse

// By Jane Weber Brubaker //

Jane Weber Brubaker, Editor of eHealthcare Strategy & TrendsA March 2016 editorial in JAMA authored by three University of Michigan physicians, “Health System Loyalty Programs: An Innovation in Customer Care and Service,” begins as follows: “Many people belong to loyalty programs for coffee shops, hotel chains, or airlines. Despite a highly consumer-oriented approach in some health systems, similar types of loyalty programs have not been developed.”

Contrary to the opening statement of this article, there actually are consumer loyalty programs in health systems. They have been spearheaded by both chief executive officers and chief medical officers. They support a range of organizational goals, and are managed by people with titles ranging from marketing director and loyalty manager to vice president of population health.

The Value of Loyalty

Hospital loyalty programs have been newsworthy because there are not many of them. Yet customer loyalty is critical to the success of any business, including health systems. The authors of the JAMA article suggest that health systems should consider customer loyalty programs for the same reasons they are so popular and widely used in business:

  1. It costs more to acquire new customers than to retain existing customers.
  2. Participants in loyalty programs are positively predisposed toward the organization.
  3. Participants refer others to the organization.

The article looks at loyalty in the context of accountable care organizations, where attrition has been historically high, and health systems are responsible for costs, whether or not patients receive services in network. When patients can go anywhere they choose, what can health systems do to entice them to stay in network?

A larger question is, even if patients become loyal because their needs are being met and they feel valued and understood, how can a health system persuade them to adopt healthy habits and prevent the onset of disease, or manage chronic conditions? This is a key question for organizations taking on population health risk.

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