1. Confidential & Proprietary - Page 0 20 South Quaker Lane, Suite 230 Alexandria, Virginia 22314 Phone 703 823 9530 Fax 703 823 9538 www.customercaremc.com Selling Quality to the CFO: Creating Patient Experience 3.0 to Dazzle the CFO. John Goodman, Vice Chairman Customer Care Measurement & Consulting VHQA November 6, 2015

2. Confidential & Proprietary - Page 1 Challenge Patients are sicker Care is more complex Demands continue to escalate Therefore……. Need to change mindset & think and act creatively Focus proactively on Culture, Communication, & Commitment Incentive – HCAHPS, revenue and right thing to do

3. Confidential & Proprietary - Page 2 2 Agenda Evolution of Customer Experience Examples of being proactive and preventive Applying technology Getting the resources from the CFO Prerequisites Evaluation of your readiness for CE.3.0

4. Confidential & Proprietary - Page 3 Driving the Customer Experience Staff isn’t to blame People need flexibility and explanations Sensibly create remarkable delight Technology is the key to VOC and CE It’s 10-20 X more profitable to deliver great service VOC is more than surveys and complaints

5. Confidential & Proprietary - Page 4 Context For Proactivity: Customer Experience Proprietary © 2013 CCMC 4

6. Confidential & Proprietary - Page 5 5 Firefighting Mode

7. Confidential & Proprietary - Page 6 Size of Satisfaction and Revenue Opportunity Formal complaints Grumbles Silent Potential Proprietary © 2012 TARP Worldwide

8. Confidential & Proprietary - Page 7 2015 National Rage Study: What Complainants Wanted & What They Got 1

9. Confidential & Proprietary - Page 8 Definition and Approaches Definition of Proactive– Control situation by causing action rather than waiting to respond to an event Approaches to proactivity −Know what will happen – operational data – FedEx −Predict what may happen – Harley battery will die in cold Benefits −One third as expensive −Prevents problems that would not surface but do 20% damage −Eliminates employee frustration

10. Confidential & Proprietary - Page 9 Examples Based on Knowing What Will Happen Prevent uncertainty – confirmation of appointment Warn about unpleasant surprises or process status – late payment charge or Domino’s

11. Confidential & Proprietary - Page 10 10 Real Psychic Pizza

12. Confidential & Proprietary - Page 11 Quicken Loan Tracker

13. Confidential & Proprietary - Page 12 Examples Based on Knowing What Will Happen Prevent uncertainty – confirmation of appointment Warn about unpleasant surprises or process status – late payment charge or Domino’s Proactive education on troubling facets of transaction – SoCal Ed & auto repair labor rate

14. Confidential & Proprietary - Page 13 Proactive Education

15. Confidential & Proprietary - Page 14 Examples Based on What Might Happen Prevent problems by helping customer avoiding actions – 50% of forms submitted have errors −Banner of top three mistakes on online form and −Send tip sheets sent to clueless corporate customers Educate on customer responsibilities – FedEx how to damage a shipment

16. Confidential & Proprietary - Page 15 Customer Education Here is what we do to smash your package!

17. Confidential & Proprietary - Page 16 Customer Responsibilities Here are your responsibilities as customer for preventing damage to your shipment!

18. Confidential & Proprietary - Page 17 1.Website – your first line of defense – top 5 issues, new visitor portal, FAQs, funny videos 2.CRM −Proactive notification across whole patient journey −Analysis of satisfaction by type of issue 3. Wireless/Mobile – Internet of things – monitor product use – proactive education 4. Gamification – recognition for support, create incentives for patient education 5. Video best method of education Technologies to Enhance the CE 17

19. Confidential & Proprietary - Page 18 Quantify The Patient Experience Mollified 2 30% I Question/ Problem Experience II Contact Behavio r III Contact Handling Patients Complainers 5-50% Complainers 5-50% No problem experience 60% No problem experience 60% Problem experience 40% Problem experience 40% Experience suggests three strategies: Prevention, Solicitation of Complaints, and Response IV Market Impact % Definitely/Probably Recommend/repurchase from same organization Dissatisfied 3 20% Dissatisfied 3 20% Satisfied 1 50% 90% 20% 60% Non- Complainers 95-50% Non- Complainers 95-50%

20. Confidential & Proprietary - Page 19 = = = = xxx = 250 600 800 6,000 7,650 Total Patients At Risk 20,000 Customers with Problems 20% Dissatisfied 80% Not Repurchasing 40% Not Repurchasing 50% Satisfied 10% Not Repurchasing 75% Do Not Complain 25% Complain 30% Mollified 40% Not Repurchasing% Create The Economic Imperative Demonstrating financial impact with the CFO and the General Counsel At $2,000 per patient, $15,300,000 at risk

21. Confidential & Proprietary - Page 20 = = = = xxx = 188 450 600 4,500 5,738 Total Patients At Risk 15,000 Customers with Problems 20% Dissatisfied 80% Not Repurchasing 40% Not Repurchasing 50% Satisfied 10% Not Repurchasing 75% Do Not Complain 25% Complain 30% Mollified 40% Not Repurchasing% Create The Economic Imperative Reduce Problems by 25% via Proactive Education At $2,000 per patient, $11,476,000 at risk adding $3.8 MM to top line. At 25% gross margin, $500,000 spent on patient education give ROI of 91%

22. Confidential & Proprietary - Page 21 Risk Scenario: Opportunities Exacerbating Factors Not Escalated Expected Claim/ Lawsuit Injury, But No Claim/ Lawsuit Surprise Claim/ Lawsuit Escalated Reported Patient Encounters Problem Occurs Not Reported Negative WOM Consumers/ PCP Well Handled Poorly Handling Contributing Factors Settlement No Settlement 10 – 40% 10,000 40 20 – 50% 50 – 80% 20 75 17 12 60 X 30,000 $1.8 Million Warned of Potential Problem 29 X 600,000 $17.4 Million 80– 95% 5 – 20% 800 2,000 120 1,200 8,000 5 15 1,080 Proprietary © 2012 TARP Worldwide Critical Research Opportunity

23. Confidential & Proprietary - Page 22 22 Problems Raise Sensitivity to Price, Hindering High Margins % Dissatisfied with price or fees Percent of customers dissatisfied with fees rises with number of problems.

24. Confidential & Proprietary - Page 23 Word of Mouth Impacts Patients and families – especially given social media impacts Referring physicians

25. Confidential & Proprietary - Page 24 24 Great Service Is A Word of Mouth Management Mechanism 10% delighted 80% satisfied Tell two Tell one = = 2,000 8,000 4,000 10,000 customers 10% dissatisfied Tell six = -6,000 10,000 Referrals X 1 Action 30 Referrals = 333 New Customers

26. Confidential & Proprietary - Page 25 25 Create an Integrated Voice of the Patient Customer surveys Contact & Social Media – provides root cause data Internal operations process, quality data Employee input – second source of root cause Together, these elements are used to quantify the cost of inaction on customer experience issues + = Total view of the customer experience Internal process and quality data and employee input + Customer contact and interaction data Surveys of customer satisfaction and loyalty Take The Role Of Chief Customer Officer

27. Confidential & Proprietary - Page 26 Effective Voice of the Customer Process 1. Well-defined ownership of process and issues 2. Unified data collection across whole lifecycle 3. Integration of multiple data sources 4. Visible, granular, actionable reporting 5. Clear revenue and profit implications 6. Formal processes for translating data into actions and targets 7. Formal systems for tracking impact 8. Process supported by company-wide incentives

28. Confidential & Proprietary - Page 27 Prerequisites Linkage of CRM with all major data bases Granular recording of preventable patient problems Value of average customer Role of Word of Mouth in institution choice Marketing and sales willing to warn customers in advance

29. Confidential & Proprietary - Page 28 Working With The CIO Use journey map as basis Unified goals for CE Analysis of website failures, e.g. search Blur the lines for personnel −Joint presentations −Joint happy hours

30. Confidential & Proprietary - Page 29 Starting Tomorrow Negotiate an average value of inpatient and outpatient Ask five whys for top five issues Understand your non-complaint rate (85-95%) Incorporate operational data with your complaint and survey data to create a unified picture of CE – add employee input Create an economic imperative for each department based on how many patients have encountered this issue Pick your battles Deliver Psychic Pizza and prevention

31. Confidential & Proprietary - Page 30 30 Ten Myths About Service 1. Always exceed customer expectations 2. Answering the phone really fast is the key to success 3. People always prefer talking to people 4. The customer is always right 5. Complaints are down, things are getting better 6. Employees are the cause of most dissatisfaction 7. Price and cost cutting is the key to success 8. We’re better than the average in our industry – that’s great! 9. We’re at 90% satisfaction – let’s declare victory! 10. We measure Net Promoter and Customer Effort - we’re done!

32. Confidential & Proprietary - Page 31 Summary Warn and educate customers to reduce surprises Understand the full range of root causes of problems Use technology to prevent workload by proactively educating, connecting, and delivering psychic pizza Quantify the revenue/WOM impact of status quo to get CFO support Outlined in detail in Customer Experience 3.0 published by AMACOM For additional articles on your industry: jgoodman@customercaremc.com or 703-823-9540 jgoodman@customercaremc.com Follow me on Twitter – Jgoodman888