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Hospitals as Hotels
Is it that people love a good movie selection, or do they take the movies to be the best available signal of hospital quality?
Amenities such as good food, attentive staff, and pleasant surroundings may play an important role in hospital demand. We use a marketing survey to measure amenities at hospitals in greater Los Angeles and analyze the choice behavior of Medicare pneumonia patients in this market. We find that the mean valuation of amenities is positive and substantial. From the patient perspective, hospital quality therefore embodies amenities as well as clinical quality. We also find that a one-standard-deviation increase in amenities raises a hospital's demand by 38.4% on average, whereas demand is substantially less responsive to clinical quality as measured by pneumonia mortality. These findings imply that hospitals may have an incentive to compete in amenities, with potentially important implications for welfare.
Here is the paper. The ungated copy is here. Here is a recent article of relevance:
When the Sacred Heart Medical Center at RiverBend opens in Springfield, Ore., in August 2008, patients and their families will enter a hospital surrounded by wetlands and Douglas firs. Inside, they'll encounter multiple fireplaces, coffee shops and visitors' lounges.
"As you come to the hospital, you'll be greeted warmly as you enter, much as you would by a concierge at a hotel," says Adam Kerner, an executive architect with Anshen + Allen, who partnered on RiverBend with an outside architect whose previous experience had been in designing resorts...
Gerard van Grinsven, president of the Henry Ford West Bloomfield Hospital now under construction in suburban Detroit, says area hospital executives were surprised when he was hired away from hotelier Ritz-Carlton in 2006. Up to then, his two-decade career had been exclusively in hotels and resorts.
But skepticism soon gave way to curiosity and competitiveness, van Grinsven says. In fact, Beaumont Hospitals in nearby Royal Oak, Mich., hired a Ritz-Carlton executive as their director of hospitality a short while later.
Van Grinsven is introducing a bit of the Ritz-Carlton flair to the new hospital, adding touches like mini-hotel rooms for visitors as well as healthy cooking classes for the surrounding community. The facility, which opens in July 2008, will include larger-than-normal emergency patient rooms—roughly 150 square feet—to create more space for visitors, a result of design sessions that included input from patients, nurses and doctors.
Posted by Tyler Cowen on January 3, 2009 at 06:42 AM in Medicine | Permalink
Comments
What this goes to show is that patients have very little idea how to go about evaluating the quality of medical care. In the absence of that information, they view amenities as a signal of prestige and therefore quality medicine. However as mediocre hospitals compete on the hospitality front, this signal becomes degraded.
It is highly unlikely that a patient facing life-or-death decisions will view the fawning of the staff as a significant deciding factor - unless he has little information about the far more important quality of medical care.
Posted by: a_c at Jan 3, 2009 11:00:29 AM
If you're in a hospital, you aren't often in a position to immediately judge the medical care. What you can judge is whether the nurses show up when you push the call button, whether they fill your room with devices that beep through the night, whether the orderlies are friendly or give you attitude.
And if you don't die, you'll probably figure the medical care was good...
And, if you're conscious, do the TV and remote actually work, and is it big enough for you to see it from your bed?
Posted by: Foobarista at Jan 3, 2009 1:14:11 PM
we paid an extra $750/day (not covered by insurance) for a private room after my son's birth. i'm sure this is a big money cow for the hospital, but it was well worth it from our point of view and i'm sure we would do it again.
my wife had (long-planned) surgery once before with a two night stay in the hospital and she had really crappy nursing care afterward. if given the opportunity i would certainly have paid out of pocket (at least $1000/night, maybe more) for better care and/or more privacy and/or the ability to stay overnight in the room on a bed, and i'm sure others would as well.
Posted by: babar at Jan 3, 2009 3:12:26 PM
This is a timely and relevant post! I am employed as a healthcare security officer at a large regional
medical center in the midwest. We have restaurants, valet service at multiple points on campus, and all
sorts of amenities. Basically, it is like a small city. People essentially use our waiting rooms as
"mini hotels" and they seem to expect more and more. In my state a hospital is required to provide
stabalizing medical treatment and a safe environment. All the rest of this stuff is gravy, but
an entitlement culture seems to be emerging (people occasionally get miffed when the valets are gone and
want to gripe to security, for instance. Some bring their luggage and basically live in the waiting
rooms ).
Hospitals should be comfortable and should be designed to reduce the inevitable tension that is inherent
in the healthcare environment. They should not be hotels. Going to far in this direction gurantees
that people will start to show up to mooch, not just to seek treatment or visit their loved ones.
Posted by: Helmut O' Hooligan at Jan 3, 2009 5:04:49 PM
Hospitals are loaded with infectious microbes... and are very, very difficult to keep sanitary. Hospital-acquired infections kill patients by the tens of thousands each year.
Hotel style furnishings (carpets, drapes, upholstered furniture, artwork, etc.) make the the cleaning task very much harder.
Hard floors, stark walls & furnishings, minimized square footage, and limited foot traffic are necessary to efficiently manage hospital sanitation.
Most people should avoid hospitals-- and get out as soon as practical if required there as a patient or visitor.
One can enjoy the amenities of luxury hotels after surviving the hospital environment. IMO most would prefer non-infection over fancy digs if they understood the risks.
Posted by: mcmalley at Jan 3, 2009 6:03:38 PM
My immediate reaction to the title was, "Ah! Discussion of the use of hospitals by the mentally ill." Any prizes?
Posted by: rluser at Jan 3, 2009 7:01:40 PM
Does this extend to the billing department? Sending people threatening letters, after they have paid their portion of the bill, does not scream hospitality. The patient can't control how long the insurance company takes to pay their part of the bill.
Posted by: adam at Jan 3, 2009 8:39:27 PM
Researching this article http://www.theatlantic.com/doc/200804/healthcare on health-care aesthetics, I learned several things relevant to the comments. First, contrary to McMalley's comment, hygienic concerns do not necessitate unattractive furnishings. These days, hospital-grade materials are available that mimic almost any effect you want. Some traditional hospital customs, notably high-polished hard floors, actually have negative health effects, since the reflections make it difficult for elderly patients to navigate. Also, single rooms, which make a dramatic difference in reducing the spread of hospital-borne infections, are a major "hotel-like" amenity. In response to Helmet O'Hooligan, it's interesting that hospitals tend to invest heavily in the aesthetics of their public areas (also relevant to the signalling model mentioned by several commenters) but not in less visible spaces, including patients' rooms and imaging suites. Finally, and less backed by research, my observation and that of people with more experience in the field is that much of the lack of attention to the look of hospital surrounds is just that--lack of attention. Nobody pays attention to the cumulative, depressing effect of many small things, from lack of minor maintenance (chipped walls, etc.) to bad wall art. In hotels, people are paid to pay attention to those things.
Posted by: Virginia Postrel at Jan 3, 2009 8:40:17 PM
--In the absence of that information, they view amenities as a signal of prestige and therefore quality medicine. However as mediocre hospitals compete on the hospitality front, this signal becomes degraded.
I'm not sure the signal is degraded. maybe those good at hospitality are precisely those who have good process in place, good oversight, good response time, with employees at all levels empowered to fix something. those sure look like the same features needed to reduce medical mistakes, examine inefficient procedures, and respond to an emergent condition rapidly. and would a hospital who was mediocre at care really manage exquisite hospitality? heck, if the only hospitality improvement a hospital made was to let patients sleep through the night without interruption, that alone could improve outcomes.
Posted by: allison at Jan 3, 2009 9:10:00 PM
Virginia Postrel:
"it's interesting that hospitals tend to invest heavily in the aesthetics of their public areas (also relevant to the signalling model mentioned by several commenters) but not in less visible spaces, including patients' rooms and imaging suites."
So true. There is always money to put in a shiny new floor or to do landscaping. Issues like security and safey, which are rather important in the healthcare environment (all sorts of vulnerabilities!!!) tend to be overlooked, but I'm a little biased. Thanks for commenting Virginia. As a subscriber to Reason, I have read some of your work, and I appreciate your insight.
Posted by: Helmut O' Hooligan at Jan 3, 2009 9:46:33 PM
Virginia: Unfortunately, with most hospitals (at least in my state) never making enough NPR (Net Patient Revenue) to break even-and barely getting there with government and private grants and subsidies, often provided on a reimbursement of "legitimate" cost or "need" basis-the fineries of the physical plant will always be of lesser priority-unless it affects the JCAHO accreditation or state health department inspection.
By the way, the "Joint Commission" just released a report about the hospital of the future
http://www.jointcommission.org/NR/rdonlyres/1C9A7079-7A29-4658-B80D-A7DF8771309B/0/Hosptal_Future.pdf
Not suprisingly, much of their concerns were vacant abstractions or obviously PC things like being "green" that should be a secondary (if at all) concern to providing a well-maintained facility that supports the effective and efficient delivery of healthcare.
I'll make a bet- the influential healthcare/hospital industries will be using this document as a template to make a play to expand/divert the "infrastructure" spending spree promised by Pres. Elect Obama to them.
Posted by: Superheater at Jan 4, 2009 2:01:32 AM
Thank you America!
Signed,
A Grateful Autoworker
Posted by: htk at Jan 4, 2009 2:02:53 AM
"clinical quality as measured by pneumonia mortality."
Is pneumonia mortality a legitimate measure of clinical quality? Is pneumonia mortality higher primarily because of poor care, or because those likely to die of pneumonia are more likely to go to particular hospitals?
Posted by: Doug at Jan 4, 2009 4:01:37 AM
"...hygienic concerns do not necessitate unattractive furnishings." VP
_________
Strawman.
The real issue is priority of sanitation over aesthetics.
If your roof is on fire, the rational priority is not remodeling the living room. First things First -- and the very First priority in healthcare is "Do-No-Harm".
The hospital-acquired-infection problem is very serious and getting worse. In the U.S. alone, millions are infected each year and 100,000+ die.
Most hospitals can't even keep the door handles, chairs & privacy curtains sanitary.
What should be the hospital priority ?
Posted by: mcmalley at Jan 4, 2009 11:46:56 AM
Cotton M. Lindsay, my dissertation advisor at Clemson, gave one explanation in "A Theory of Government Enterprise", Journal of Political Economy (JPE), 1976. His theory was that patients valued both the getting well part (strictly hospital services, that is) and the staying in a nice place part (the hotel services; I think he even called it that), while the politicians who oversaw the VA hospitals valued only the former. So, private hospitals delivered on both. Meanwhile the VA hospitals did just as good a job of making you healthy as the private ones.
An alternative explanation (Klein and Leffler, JPE, 1981, "The Role of Market Forces in Assuring Contractual Performance") would be that the plush stuff signals the quality of care. Nice couches and fireplaces show that the stay is going to cost a lot of money. The patients figure maybe there's a good reason for that.
Posted by: Gabi Huiber at Jan 4, 2009 3:42:26 PM
Visit Beaumont, it is great. If you're out that way, I recommend it.
Also talk to Dr. Richard Coffey at U of M, IOE department.
He did great work on improving hospital operations.
I believe U of M IOE was ranked 1 or 2 in the nation was I was there late 90s to 2000.
Posted by: aaron at Jan 4, 2009 5:37:54 PM
Just to add two cents - I actually worked with the architect for River Bend, and it was supported by the concept of Evidenced Based Design.
In essence, a more aesthetic and pleasant environment (for staff, visitors and patients) leads to better outcomes for all.
Hospitals are scary places for many people - these sorts of amenities go a long way to removing some of that fear.
http://www.healthdesign.org/ and http://en.wikipedia.org/wiki/Evidence-based_design have quite a bit more information on the topic.
Posted by: Steve at Jan 6, 2009 9:51:20 AM
