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

Posted on: Wednesday, May 22, 2019 By: KorchekStaff

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.

Today, health care organizations are collecting increasing amounts of data, enabling analyses that capture current performance and allow benchmarking with comparable organizations. Prior analyses of data collected by Press Ganey have shown that hospitals with better patient experience have better business performance (as well as better records in safety, technical quality, length of stay, and readmission rates). Similarly, better employee engagement correlates with better outcomes on all these parameters.

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 simultaneously.

As the exhibit shows, improvements in two different types of perception measures — one from patients’ perspective and the other from employees’ — is associated with improvements in the key global HCAHPS measure of how patients rate their hospital. (Patient experience and employee engagement data are derived from Press Ganey national comparison data for 2017.)


For this analysis, we focus on one specific measure of patient experience on the vertical axis: how patients rated communication with their nurses. The horizontal axis shows the change in a composite employee engagement measure reflecting a summary of employee responses to questions that assess attitudes toward the organization, perceptions of supervisors’ effectiveness, job performance, and likelihood to recommend the organization.

The numbers in each cell reflect the average change in patients’ overall experience rating. So, for example, hospitals that saw a performance gain of greater than one percent or more in both communication with nurses and employee engagement had an average performance gain of six points in overall hospital rating (upper right box). Conversely, when improvements were seen in just one domain or the other, associated gains in overall rating were either modest or negative, or there was no change. Thus, even with an improvement in one area — say, employee engagement — a decline in the other can offset it, resulting in an overall rating decline.

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. Put another way, a five-point increase in hospital rating is associated with a 1% increase in profit margin (based on linear regression analysis using data from 3,408 acute care hospitals, controlling for region, case mix, ownership category — i.e. private, nonprofit — and bed size).

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.

Of course, many factors contribute to employee engagement, patient experience, and financial performance. But this analysis focuses on the impact of improvement in the first two on hospitals’ profits. It connects the dots between business performance and improvement in the perceptions and experiences of both patients and caregivers.

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.