The relationship between patient satisfaction and inpatient admissions across teaching and nonteaching hospitals.

EXECUTIVE SUMMARY

The need for healthcare executives to better understand the relationship between patient satisfaction and admission volume takes on greater importance in this age of rising patient expectations and declining reimbursement. Management of patient satisfaction has become a critical element in the day-to-day operations of healthcare organizations pursuing high performance.

This study is guided by two principal research questions. First, what is the nature of the relationship between patient satisfaction (as measured by scored instruments) and inpatient admissions in acute care hospitals? Second, does the relationship between patient satisfaction (as measured by scored instruments) and inpatient admissions differ between teaching hospitals and nonteaching hospitals? Although not suggestive of direct causation, the study findings revealed a statistically significant and positive correlation between patient satisfaction and admission volume in teaching hospitals only. In contrast, a nonsignificant, negative correlation was seen between patient satisfaction and admission in nonteaching hospitals. In the combined teaching and nonteaching sample, a statistically significant, negative correlation was found between patient satisfaction scores and admission volume.

With financial performance being driven in part by admission volume and with patient satisfaction affecting hospital patronage, the business case for a strategic focus on patient satisfaction in teaching hospitals is clearly evident. The article concludes with a set of recommendations for strengthening patient satisfaction and organizational performance.

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In today's healthcare marketplace, providers increasingly compete against one another for business. In the late 1980s, healthcare executives were confronted with the realization that they could not just increase charges to generate revenue, but rather they had to contain costs as well. Providers now compete on business factors other than price, such as quality, service, reputation, and other nonmonetary attributes. Ettinger (1998) stressed that successful competition relies on the provider retaining awareness of who it wants to serve, what value it creates for the customer, and how it ,,viii create that value operationally. In the end, the provider needs to be strategic rather than tactical and proactive rather than reactive. Providers must shift their focus externally to the consumers' requirements rather than their own.

The need for research regarding patient satisfaction and market share is evident in this age of declining reimbursement and rising patient expectations. Monitoring patient satisfaction has become a standard operating procedure in most healthcare organizations, especially with new Medicare reporting requirements under the HCAHPS program. While patient satisfaction has been widely studied, a gap exists between the impact of customer satisfaction and organizational performance (Kovner and Neuhauser 2004).