Intersection of Patient Satisfaction, Expense Management, and Profitability at Washington State Hospitals

Purpose: Explore relationships between hospital expense management, profitability, and patient satisfaction. Methodology: Hospital financial statement and patient satisfaction scores in Washington State were analyzed to identify financial approaches between hospitals with high and low patient satisfaction scores. Finding: Hospitals with high patient satisfaction scores invest significantly more in surgical services than do hospitals with lower scores. While surgical services are typically viewed as lucrative revenue streams for most hospitals, high-scoring hospitals’ higher levels of investment in surgical services, and other areas linked to diagnosis and postoperative care, suggests that these hospitals are committed not just to generating revenue but also to enhancing patient outcomes and experiences. Hospitals with high patient satisfaction scores also invested more in data processing. Unlike areas in which increased spending is directly related to providing clinical services, data processing is part of an administrative domain can be considered a strategic move to leverage technology for better patient outcomes and experiences. All hospitals in the study spent similar amounts in some areas of hospital operations, including acute care, central services, laundry and linen, and in-service education. Yet, for hospitals with high patient satisfaction scores, these specific expenses correlate with profitability. This result suggests that although both sets of hospitals are incurring similar expenses, their returns on investments differ. Addition research is warranted to better understand the reasons for this disparity including internal differences in operational efficiencies, service quality, the internal built environment, and external factors such as payer mix and regional demographics. Originality/Value: This study can support healthcare organization in developing a framework to optimize best practices around patient satisfaction and expense management.