The Quality Care story

Quality Care is an HMO (Health Maintenance Organization) providing managed care for health insurance contracts as a liaison with health care providers (hospitals, doctors, etc). It is positioned as third player in the market; whereas HealthCare One and MediCenters are respectively positioned as number one and two in that market. Quality Care has experienced quite a good growth for last few years and they are always concerned about the customer needs and preferences. Quality Care runs different surveys to know about customer wants and also seek feedback from new/upcoming services. The top management people of Quality Care are loyal to the company and do consider the pros & cons before taking any strategic decision. A consultant named Jack Zadow once proposed an automated reception system to be implemented in Quality Care. As per Jack, the new automated reception system will enable Quality Care to provide an efficient and satisfactory service to the patients and will resolve the long queue that is shown regularly in quality Care. As per Jack, the computers will lead the patients through a set of questions about their current medical condition, the reason for visit, and so on in the new system. After that the computer will pull the member's record, process the new information, and then route the member to the appropriate staff person for consultation. The top management members took the proposal as a good input for analysis. They always welcome innovation in their company; but only accept ideas which are appreciated by its customers and worth to invest. Allan Moulter had been the CEO at Quality Care for nine years. After listening the presentation from Jack he brought the positive and negative side of such initiative. Being the CEO he had to consider the positive factors like innovation, efficiency in customer services, reducing OPEX, attaining new customers and so on. At the same time he had to consider the negative/risk factors like customers acceptance towards new technology, CAPEX investment for installing the new system, training to the employees to adapt with new system, cost of procedural changes and so on. After considering all these Allan went to discuss this topic with Ginger Rooney. Ginger is the vice president of marketing for Quality Care. She is part of the team that was scoping out locations for expansion and possible new alliances. She had flown in from Pittsburgh that morning and therefore missed Jack's presentation. Allan shared the new idea of automation with Ginger in positive manner to see her vibe. Allan said that since their competitors are going to deploy this, they also should take preparation to deploy this to be sustained in the market. But

Ginger was not convinced with allans thoughts. As per Ginger Quality Care should take steps considering the feedbacks from customers and the feedback says the new automated system is not welcomed by them. Ginger also raised logics that the top two competitors may have not done such customer surveys before taking the change decision. Ginger also rose that the top two competitors may take this initiative because they have been losing customers recently and they need something new to attract its customers. Then Allan replied if survey made by Quality Care was wrong as big two players in the market are going to follow the automated system? Ginger replied that Quality Care should rely on its strategy since it was proven for the last few years. Allan again added what will be the customer reaction if they see all big HMOs practicing the new system but Quality Care following the old procedure. As per Ginger, Quality Care should not implement any new system which its customers didnt at al Penstone, the CIO of Quality Care also agreed with Gingers view. appreciated. Pat

Problem statement:

Quality Care is grappling with a problem faced by many service based business: How can a company adapt technology to help manager to flow of information while still presenting a personal face to customer?

Marketing applications

While analyzing the situation in light of our marketing knowledge, we find the existence of GAP Model. The model has been depicted below:

Figure: Gaps Model of Service Quality

We found the existence of: 1. provider gap 1: Not knowing what customers want and 2. provider gap 2: Absence of customer driven standard

In response to service quality dimension, we found the below figure:

Reliability

Responsiveness

Assurance

Empathy

Tangibility

Figure: Service Quality Dimension

As the CEO has response, we found assurance and responsiveness are the two most important dimension for Quality Care. And we will find the below Service encounter cascade for Quality Care

Figure: Service encounter cascade for Quality Care

Situation analysis

Right now, the high officials of Quality Care seems to be confused on the wring issue : the very idea of the new system have dazzle them. They have seen how their competitors are handing their technology, and they are proceeding as though this is an all-or-nothing decision. It is not. Unfortunately, too many managers in similar situations make same mistake. They look at the working system, and try to accommodate it, rather than objectively assessing their own requirement. High officials need to examine their own goals and their customers desire and then begin to plan a system for Quality Care. The company seems to have unique strengths in the rapport of the customers. Its managers need to think about how that strength can be leveraged to help both the company and the customers. Customers traditionally find it extremely difficult to envision the new technology, particularly when it replaces an interaction with a live person. In a survey conducted for a company in an industry related to health care, 82% of the customers said that they would not like the proposed automated customer interface.

There will always be a great number of customers who choose human interaction over convenience, notably customers experiencing serious illnesses and older patients who have trouble with newer technologies or unfamiliar environments. They will find it difficult, inconvenient to interact with machine in the reception to explain their problem in case of their extreme emergency. Human interaction would definitely reduce this burden. An automated reception system represents a major investment with a uncertain payoff (both in terms of money and people cost).Although the market leader decided to adopt it, Quality Care should not decided to install the system right now out of the fact that Quality Care will be left behind especially in light of the research that Quality Care customer research and the fact that customer satisfaction is not a particular problem for Quality Care.

We would suggest CEO should put more time to analysis pros and cons for adopting this significant new service. Research result consistently suggest that companies that spent time up front testing and developing the concept, analysis the financial figures, testing the market, and planning and implementing the strategy have the moist success in introducing major new service. But those results are for the companies who have done their own research. Quality Care should not assume that Health Care One has done their home work in this area. We would suggest Quality Care to conduct a research on the Health Care One customer to find out how they are responding to their new system.

Critical issues

Few question may arrives in this stage for sure. Like: Why to do further research of Health Care Customers and employees perception? Why not just make a decision now?

Answer of these questions are critical in nature because, once a program of such huge size has been started, it will always be difficult to reverse, even if the level of customer satisfaction drops and the new system does nothing to make the company efficient ! The cost of change would be BIG! The cost of backpedaling the employees and dissatisfied customer would BIGGER! It is further inconvenience for the employee as well as the customers as Quality Care would than try to recover the lost ground and may have to come up with a costly recovery strategy. Being a major player in Health Care service industry

customer first encounter with the service provider carries enormous weight age. This could be the moment of truth for the existing and potential customers.

Suggestion

We would advise CEO to think further on how this automated reception encounter would affect the customers, who may be arriving for their appointments sick, unsure of themselves and emotionally vulnerable. Definitely Quality Care would find challenge to retain its aura of intimacy and personal concern with the automated system. The new would place new demand on customers, forcing them, essentially become the part time employee of the company. The customer would have to part of their health care service by themselves, and it is highly unlikely that they may not want to do it! As the user of this system is employee and customer, it should be employees perception of the quality service that should dictate how the system is design and implemented. It would be far better to start with the customer perception and needs and then to work back in the system to determine the operating standard. Would the new system meet customers need? The answer is not clear yet! There are two primary reasons that lead us to rethink before going got this huge investment: Whether it would represent a considerable cost saving without sacrificing customer defined quality? Whether it would significantly improve customer satisfaction and retention level? The big payoff of installing this particular system is started with Increased customer retention over long run but since no one had this type of system for very long, how the potential benefit in the long run is determined? Has the CEO calculated the cost and expected benefit in term of retention? Has CEO emphasis on determining the return on quality? Has the decision maker considered the factor of employee and customer education and implementation cost? What would the return on this investment versus return on other changes that Quality Care might make to enhance its image as the premier HMO? Has anyone thought of how this system would handle illiterate customer? or language barriers ? Or people with poor vision?

Has CEO thought of how quickly the system becomes obsolete?

There is issue of standardized reports for the government and for insurance agencies. This is a pure conjecture in the case, but it does rise and interesting point. Would a system that speeds up interactions with insurer improve customer satisfaction level and benefit in the bottom line? Is there other benefit or problem in there in that area? That would be worth studying. CEO would start by contacting the relevant insurance agencies and government offices to find out if they have any plan to require a new reporting system and if so, when it might get into effect? At this point CEO can only speculate about possible requirements assuming they do materialize; the system Quality Care is looking at could be obsolete!

Concluding remark:

In light of the above vibrating questions, we could recommend if there is no problem with the current reception process, other improvement should be made first instead of installing the proposed technology.