What’s The Precise Dollar Value of Patient Loyalty?


Almost three decades ago I did a TV story about how a then fledgling company called United Healthcare was taking off in its home state of Minnesota.

Doctors statewide had at first refused to join the insurers network convinced that their patients would never leave them for “little things” like no co-pays and slightly lower premiums. As usual the doctors were in their own world: United Healthcare had already done the research. They had tested how much of a price break it took for consumers to leave their beloved doctors of many years. The answer: a reduction in premiums of $20 per month. (The price break today is probably less). So much for the vaunted “doctor-patient” relationship.

The basic problem then is the same as today: consumers have no way (and even a reluctance) to assess the quality of their physicians. I tell physician clients, “30 years ago, doctors had enormous power because your patients couldn’t judge you. Today you have almost no power…for the very same reason.”

Thirty years ago a neurosurgeon looked a patient in the eye and said, “You have a brain tumor. I won’t lie, it’s serious. But you and I are in this together and I will do everything in my power to pull you through.” At that moment no one talked about cost.

Today that same doctor is challenged by a man in a cubicle who says, “Doctor, it’s incredible what you do. The problem is I have twenty other neurosurgeons who’ll do these same procedures for half the price.”

This commoditization of physicians benefits every other player in healthcare. It reduces doctors to interchangeable cowering cogs in someone else’s machine. Hospitals and insurers love the level playing field that renders you expendable and dependent on their good will.

One ironic result: the best doctors are often penalized for rising above the mean. Since my clients tend to be top tier physicians, I’ve seen this happen again and again.

I remember once I put the accomplishments of a renowned orthopedic surgeon on the front page of the Wall Street Journal. The doctor’s hospital was furious and called me up to complain. Part of the reason was because I’d shown up their own internal marketing department. Part of the reason was because the doctors’ colleagues were now jealous. But the main reason was because I’d given that doctor value. The world now knew just how respected that individual physician was. And that upset their apple cart.

This calculated attack on quality is just one more “unintended consequence.” Physicians suffer when they’re reduced to employees…but in some ways so do their patients.

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2 thoughts on “What’s The Precise Dollar Value of Patient Loyalty?”

  1. It has always been thus: when the customer perceives no difference in the quality of a service between suppliers, they make their decision based on price. It is up to the providers of the service to add value, to differentiate, to add new skills, to make a personal connection, so that customer loyalty overcomes commoditization. Beware, competitiion throught commoditization may lower the price of a given product or service, but eventually the quality of that product or service will decline in the presence of induced apathy, because the providers of the product or service will decide there is no long a point, and the endeavor no longer has worth. No one wins – another example of greed overcoming utility.

    1. Very much agree. The problem here is there’s no incentive for clinical excellence because 1) patients can’t recognize it, and 2) employers don’t reward it. In fact I would argue employers prefer a perfectly level playing field because it leaves physicians commoditized and helpless. When I successfully get media exposure for physicians, health systems are paradoxically teed off. Again it threatens that level playing field. Crazy when very intelligent physicians are practically encouraged to be uniformly mediocre.

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