Service Recovery in Health Care

Our guest blogger is Andrew S. Gallan, PhD, Assistant Professor, Department of Marketing, Kellstadt Graduate College of Business, DePaul University, Chicago, IL, and faculty research fellow at the Center for Services Leadership at Arizona State University.

Despite the most herculean efforts to improve quality and to ensure safety, things can and do go wrong in health care (see El-Ghobashy, T., & Weaver, C. (2013) “Equipment Collapses, Killing Patient,” The Wall Street Journal. New York; or, Foxnews.com (2013) “Woman Declared ‘Dead’ Awakens Just Before Doctors Harvest Her Organs” New York). When this happens, it’s up to people across the entire organization to read signs from patients and their families, to assess opportunities for improvement, and to provide physical, emotional, and psychological support. What is at stake? The organization’s brand, its reputation, patients loyalty and word-of-mouth, expensive litigation, and, most importantly, decreased quality of life of the very people the organization has sworn to help.

There are plenty of examples of organizations developing service recovery programs that are internally (and sometimes externally) branded (see http://www.communicatewithheart.org/ for Cleveland Clinic’s program). While these programs are well intended, and cover a wide swath of what is assumed to be critical in addressing service failure, I have yet to see a program that covers all the bases that are required to optimize desired outcomes.

Using fairness (or justice) theory as a framework, we can see specific, actionable items for designing, assessing, and improving service recovery strategies (For more, see Tax, Steven, Stephen W. Brown and Murali Chandrashekaran, “Customer Evaluations of Service Complaint Experiences: Implications for Relationship Marketing”, Journal of Marketing, 62 (2), 60-76.)

There are three critical components to a full service recovery strategy:

  1. Interactional Justice: Degree to which the people affected by decision are treated with genuine dignity, empathy and respect. Your staff needs to understand that people need to establish a caring, emotional connection.
  2. Distributive Justice: Covering the outcome of a service failure; payment, exchange, gift, etc. What can you provide to the patient that can make them feel as though you understand the cost to them for their time and inconvenience? Often that does NOT take the form of a tit-for-a-tat; small remunerations are “tokens” that are often magnified by recipients to cover a multitude of sins.
  3. Procedural Justice: fairness in the processes that resolve disputes and allocate resources or with the processes and design of the service itself. This takes two forms: (1) the patient needs to see that there is a service recovery process in place (thus the external branding efforts); and, (2) the patient needs to know that there are feedback loops in place to ensure that the chances that whatever happened will NOT happen again.

For more on the service recovery paradox, see Augusto de Matos, Celso, Jorge Luis Henrique, and Carlos Alberto Vargas Rossi, “Service Recovery Paradox: A Meta-Analysis,” Journal of Service Research, 10(1), 60-77.

Think about a restaurant visit:

You approach a special event with your significant other, and arrange for reservations at an upscale restaurant. You both look forward to celebrate the evening. You are greeted nicely, and seated at a preferred table. Your waiter greets you and takes your drink order, a nice bottle of wine. He assures you that he will be back shortly to tell you about the specials and take your initial order. The tables begin to quickly fill up, and everything gets quite busy. The conversation is going well, so you hardly notice the time, but when you look, you realize that it has been almost 20 minutes since you ordered the wine. No one has come to your table, and other diners seated after you have already received their drinks. You are starting to wonder whether this will be a disappointing evening. When your waiter finally arrives at your table, he is a bit out of breath, sees you, and then remembers that you ordered wine. You realize that things are not going well in terms of the internal processes at the restaurant, and you begin to wonder if you drew the wrong waiter. How should the waiter and the restaurant handle this issue? How can they recover while the service experience is being played out? How can they maximize the opportunity that you will enjoy your dinner, tell others about it, and come back again soon?

So, what does a good service recovery look like?

  1. A genuine, empathetic apology. Express understanding of the customer’s situation. The waiter should provide you with a sincere apology. We all understand the difference between authenticity and a rote recital of “I’m sorry.” When we sense that a service provider has apologized so much that he/she is emotionally detached, we infer that these things happen all the time. Not good.
  2. Remuneration that is proportional to the failure. Customers expect something for their inconvenience. Should the bottle of wine be provided by the waiter? Or the dessert? Or appetizers? Or a gift certificate to your next dinner? Some establishments think the certificate will induce loyalty behaviors, but if the recovery is not handled properly, you may get a customer to return simply to get a “bargain,” not to repatriate repeatedly. You don’t have to think about compensating the customer for 100% of their time and inconvenience; you simply have to provide a significant gesture that proves that you understand that their time and experience is valuable to your organization. Vanderbilt Medical Center in Nashville, TN provides vouchers as an example.
  3. An explanation of how your organization and its employees will re-examine procedures, policies, and processes to prevent similar failures in the future. This is the element that is often missing. Your organization needs to provide evidence to the customer that there are feedback loops inside your organization to capture, disseminate, and learn from the service failure to reduce the probability that it happens again. This is a particularly sensitive issue for some organizations, as they often perceive this to be a sign of weakness rather than a signal of strength. If this is NOT done properly, a diner might have a lovely evening, feel that the apology and remuneration were appropriate, yet never return or recommend your restaurant. Why? They don’t believe that your organization can assure them that the same thing won’t happen again!

When service recovery is done well – that is, it executes the dimensions outlined above – it provides the opportunity to not only satisfy the patient, but rather delight him or her! This difference can affect whether the patient will provide positive word of mouth and come back next time they need your services. In practice, we often see that customers who experience an effective service recovery are more satisfied that those who had a satisfactory experience without failure and recovery. This has been termed the Service Recovery Paradox.

The service recovery paradox states that with a highly effective service recovery, a service failure offers a chance to achieve higher satisfaction ratings from customers than if the failure had never happened. A good recovery can turn angry and frustrated customers into loyal customers. In fact it can create even more goodwill than if things had gone smoothly in the first place.

Takeaways:

  1. DO NOT fail customers in order to attempt to recover well to take advantage of the service recovery paradox.
  2. DO stay vigilantly aware of “moments of truth” or critical incidents, both positive and negative, which provide you the opportunity to reinforce your brand or to recover with your customer. Service failures are opportunities provided to your staff to recover and thus delight your patients! Ask your employees to look for special “moments of truth” to take your patients beyond satisfaction through a complete service recovery. These moments of truth have been described as “sacred moments” through a process termed Spotlighting (see the Beryl Institute Report: http://c.ymcdn.com/sites/www.theberylinstitute.org/resource/resmgr/grant_program_papers/2010grantpaper-stjospehorang.pdf).
  3. Apologize genuinely when you have the opportunity, and connect with customers in authentic ways. A movement is underway to protect health care organizations from empathizing with patients (see, for instance, Baum, S. (2013) “PA Passes “I’m Sorry” Law to Improve Physician-Patient Communication,” MedCity News.) A simply acknowledgement of a patient’s feelings, and a heartfelt connection with his/her family, can even prevent litigation (see Howley Jr., M. J. (2009) “The Use of Apology in Health Care.” Journal of Medical Marketing, 9(4): 279-289). Apology in health care has been linked to a reduction in frequency of litigation (http://www.calbarjournal.com/July2010/TopHeadlines/TH1.aspx) and the amount of settlements (Ho, Benjamin and Elaine Liu (2010), “Does Sorry Work? The Impact of Apology Laws on Medical Malpractice,” Cornell University Working Paper Series.)

I hope that you consider assessing your organization’s service recovery program in light of previous research and theory on delighting patients. I welcome your comments.



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