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 / Spring 2006 / Issue 42(originally published by Booz & Company)


Five-Star Hospitals

Treating patients like customers is not only good medicine; it’s good business.

Griffin Hospital in Derby, Conn., provides patients and their visitors with private kitchens.

Photographs by Peter Gregoire
and Vern Evans
It is always tough to pull the plug on a community hospital. In the early 1980s, the board of Griffin Hospital, a struggling institution in the working-class Lower Naugatuck Valley of Connecticut, had to wrestle with that decision. Times were not good. Every factory in the area had downsized or closed. The hospital’s financials were sickly, and it was losing market share to the seven larger health-care institutions, including Yale New Haven, that lay within a 15-minute drive. Griffin could brag that it was the most affordable hospital in the state, but its tight budgets left it with little cash to keep up with new technologies or to expand. Recruiting clinicians was getting harder. And the hospital was losing the public’s respect. In 1982, Griffin’s board commissioned a market survey, an unusual step at the time in health care. Among its questions: “If there was a hospital you could avoid, what hospital would it be?” The leading vote-getter? Griffin, with 32 percent of the responses.

But the hospital did not close. Two decades later, Griffin is financially successful, steadily expanding its programs, its buildings, and — a key metric for hospitals — its market share. It is the only hospital named by Fortune magazine as one of the “100 Best Companies to Work For” in America for seven consecutive years, ranking No. 4 in 2006. And Griffin has become such a model for other institutions that it conducts a side business charging health-care executives thousands of dollars for “benchmarking” tours. How did such a striking change occur? Through a single-minded devotion to customer service — one that many in health care regard as quixotic, superfluous, or even downright fanatical.

Griffin is typical of a worldwide subculture of hospitals and other health-care facilities that in the past 20 years have taken the idea of customer service to heart and transformed themselves. In the process, they are demonstrating that service-minded health-care institutions can thrive financially even amid escalating costs and competitive pressure. This movement goes by a number of names — people-centered health care, health-care improvement, medical quality, and consumer-driven health care. It is led by a host of advocacy and research organizations that include an international nonprofit managed by Griffin Hospital: Planetree, an association of 100 hospitals aimed at improving the patient experience. Other leading organizations include the Institute for Healthcare Improvement (known for its crusading founder, Dr. Donald Berwick, and its “100,000 Lives” campaign) and the Center for Health Design, which promotes “evidence-based building design” to construct hospitals that work better for patients. The place to see the people-centered movement in action is in Griffin Hospital and some counterparts around the world. Three health-care centers in the U.S. — Griffin, North Hawaii Community Hospital, and the Fresno Surgery Center in California — show how even hidebound organizations like hospitals can remake themselves and the way they do business.

While new payment schemes, clearer pricing, and increasing competition are driving most hospitals to hack and trim in desperate efforts to survive, the executives at Griffin and other “five-star hospitals” have taken a different tack. They’re attempting to build health-care centers with the customer-friendliness of Nordstrom, the reliability of FedEx, and the transactional accuracy and simplicity of American Express. They believe that making hospital stays more pleasant will pump up market share and revenues, boost the quality of clinical care, create less stress for the staff, and generally turn their business around. They are transforming themselves to better serve the consumer.

The Tough Business of Caring
Visibly, vividly, most of today’s hospitals do not work for the customer. Rik Elswit, the legendary guitarist for the rock band Dr. Hook and the Medicine Show, struggled with several forms of cancer for years. Ask him about the treatment and cure and he lights up, overflowing with praise for the miracles of modern medicine and the skill of its practitioners. Ask about his experiences as a patient, though, and his face changes completely. “I don’t see why, just because I was sick, they had to treat me like a prisoner,” he says.

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  1. Gary Ahlquist, David Knott, and Philip Lathrop, “Prescription for Change,” s+b, Fall 2005: Portrays consumer-driven health plans as the best hope for keeping a government-sponsored universal health-care initiative at bay. Click here.
  2. Elizabeth McGlynn et al., “The First National Report Card on Quality of Health Care in America,” RAND Corporation, 2004: The most comprehensive evaluation of the quality of medical care in the United States. Click here.
  3. Mark McLellan et al., “New Studies Show Wide Variations in Hospital Care and Outcomes for Chronically Ill Medicare Patients,” Lecture, Robert Wood Johnson Foundation, Willard Hotel, Washington, D.C., October 7, 2004: Five health-care industry leaders discuss the wide variation in the quality of care given to Medicare patients. Click here.
  4. “More Efficient Physicians: A Path to Significant Savings in Health Care,” The Consumer–Purchaser Disclosure Project, July 2003: How increased efficiency and standardized metrics of safety and effectiveness will reduce costs. Click here.
  5. Planetree: Overview of people-centered health care and directory of affiliated hospitals. Click here.
  6. Institute for Healthcare Improvement: Quality improvement clearinghouse for physicians and practitioners. Click here.
  7. Center for Health Design: Focuses on building and site improvement. Click here.
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