Do satisfied patients and engaged staff impact on healthcare business profits?

Medical profits

Well, according to an article recently published in Harvard Business Review, it would seem that they do… and very much to the positive.


When Patient Experience and Employee Engagement Both Improve, Hospitals’ Ratings and Profits Climb

Health care executives know that patient experience and workforce engagement are intertwined, but few providers integrate and analyze these data to really understand the connection. Management tends to take it on faith that improving patient experience and enhancing employee engagement are good ideas — but faith alone doesn’t always lead to appropriate prioritization if it isn’t accompanied by insight into how issues relate to bottom-line performance.

When organizations have invested in comprehensive data collection for a few years, they see a time-lapse view of their performance that demonstrates whether it is improving. Leading organizations are taking it a step further, leveraging the data to understand how improvement on patient experience and/or employee engagement correlates with broader organizational performance.

Our latest research shows that hospitals that improve over time in distinct HCAHPS survey measures of patient experience or employee engagement also see improvement in patients’ global ratings of their care.

Further, the data reveal that there can be a compounding effect when organizations improve in both experience and engagement measures.

What’s more, we found a pronounced association between improvement in overall hospital rating and financial performance: for every one-point increase in hospital rating we saw a 0.2% increase in net operating profit margin.

When we removed critical access hospitals from the data set, every one-point increase in hospital rating was associated with a 0.4% increase in profit margin. In this scenario, a five-point increase in hospital rating correlates with a two percent profit-margin increase.


Given the sweeping and unstoppable market forces exerting pressure on health systems and hospitals, evidence of the compounding effect of patient experience and employee engagement on business outcomes should command the attention of health care leaders. The follow-on imperative is to home in on the key structure and process elements that drive better performance in both domains.