Give to Get: The How and Why of Patient Loyalty Programs

We all know that acquiring new patients costs more than keeping existing ones. How much more? According to the Harvard Business Review, “Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.” Even if your numbers are on the low end of that range—and that seems unlikely for healthcare providers—that’s an awful lot of money to spend making up for lost patients, especially when there are things you can do to keep your current ones. 

We already covered several strategies for reducing patient churn. Today, let’s discuss patient loyalty programs (a.k.a. patient rewards programs). Here’s what you need to know to implement one in your PT, OT, or SLP practice:

Loyalty programs are becoming increasingly popular in health care.

While loyalty programs once only seemed appropriate for grocery stores, coffee shops, hotel chains, and airlines, they’re now showing up in health care (and have been for a few years). After all, as the author of this Modern Healthcare article points out, “frequently switching clinicians can result in fragmented and poorly coordinated care, yet addressing the issue has not been easy. Loyalty programs might be one way to think outside of the box. And the concept is slowly generating interest among healthcare leaders.” 

According to the Advisory Board post, an article published in The Journal of the American Medical Association back in 2016 recommended healthcare organizations take advantage of these programs. The article’s authors posited “that hospitals can adapt the approach to fit the health care market, offering perks such as parking vouchers or discounted cafeteria food.” 

While private practice rehab therapists may not have access to a cafeteria, there are certainly other bonuses you can offer—for example, a complimentary aqua therapy or gait training session or tickets to your next virtual strength training workshop. 

They’re good for patients and providers.

It should come as no surprise that loyalty programs can strengthen the patient-provider relationship and encourage patients to achieve their care goals. But according to the Advisory Board, these types of programs may also encourage healthcare providers to “partner with gyms, pharmacies, or other healthcare organizations to provide loyalty rewards—incentivizing patients to focus on their health, which can lower the cost of care.” In other words, they can enhance partnerships and promote a collaborative care model, ultimately delivering more value to patients.

It’s important to reward the right behaviors.

Some providers and administrators have voiced concerns that implementing loyalty programs in healthcare organizations and provider offices could cause “patients to seek unnecessary care just to rack up rewards”—which, the JAMA authors say, can be avoided when providers base rewards on “the duration of the relationship, rather than how many times the patient visits.” 

You can also avoid this issue altogether by incentivizing something other than longevity—for example, meeting functional goals, completing supplementary education about their path to recovery, or referring your practice to a friend (like two of real-life PT clinic examples cited below). The latter option is particularly interesting, because you’d be hard-pressed to find a patient who is willing to refer your practice to a friend after being less-than-thrilled with your services—no matter how good the reward. And that brings us to our next point.

It’s equally important to provide value.

According to Jason Wolf—president of the Beryl Institute, a global community dedicated to improving the patient experience—in the above-cited Modern Healthcare article, organizations must ensure they’re providing value to their patients before implementing a rewards program: “Dropping a rewards program into an organization that is not focused on improving outcomes or making care affordable will not make a difference,” he said. A reward program is an “extra layer,” not a standalone solution. 

In other words, if you're not already providing exceptional care and service to your patients, then you’ll want to start there. After all, a gift card isn’t going to keep a patient around if that patient had a subpar experience. And it certainly won’t be enough to encourage anyone to publicly (or even privately) sing your praises. 

Examples of Physical Therapy Patient Loyalty Programs

Now, rehab therapists are all about providing high-value care that produces exceptional outcomes. So, you already have a great foundation to experiment with a loyalty program for your patients. While the possibilities are nearly endless, to help get you started, here’s a short list of things for which rehab therapist could reward their patients: 

• Going to all scheduled sessions and completing their plans of care
• Showing up to all appointments on time
• Completing their home-exercise programs
• Reading or consuming specific content related to their condition
• Bringing a friend or caregiver to their appointment for support (once any COVID-related capacity restrictions have been lifted)
• Attending complimentary educational seminars

Curious what behaviors other PT organizations are rewarding? Stay Fit Physical Therapy & Core Wellness awards patients points for their wellness purchases (1 point for every $1). Others prefer to reward referrals: Physical Therapy & Beyond provies patients—and their referred friends—their choice of a free 10-minute chair massage or t-shirt. Doctors of Physical Therapy provide referring patients with up to $300 worth of gift cards. 

Speaking of referral rewards, WebPT Reach can (among other things) help you identify existing patients who are the most likely to send more patients your way—you know, the ones who are truly thrilled with your care—via automated Net Promoter Score® (NPS®) tracking. That way, your referral reward program will be an absolute breeze to implement—and monitor.

There are loyalty program pitfalls—especially with Medicare patients.

According to Wolf, loyalty programs are “an innovative but conceptually tricky proposition,” particularly with regard to patient marketing regulations—like those presented by the Federal Anti-Kickback Statute and the Medicare Inducement Law. Here’s what you need to know about each:

The Federal Anti-Kickback Statute

Under the Federal Anti-Kickback Statute (AKS), it’s a criminal offense to “knowingly and willfully offer, pay, solicit, or receive any remuneration to induce or reward referrals of items or services reimbursable by a Federal health care program.” Any violation of this statute is a felony that could result in serving jail time and/or paying steep fines.

The Inducement Law

The Inducement Law prohibits providers from “offer[ing] or transfer[ing] to a Medicare or Medicaid beneficiary any remuneration that the person knows or should know is likely to influence the beneficiary’s selection of a particular provider, practitioner, or supplier of Medicare or Medicaid payable items or services.” 

In short, this means that providers are prohibited from inducing (which you can think of as bribing)  Medicare or Medicaid beneficiaries. Failure to comply could lead to civil fines and/or being unable to participate in federal healthcare programs. Now, the Office of the Inspector General has stated that nominal incentives (i.e., those valued at no more than $10 per item or $50 total annually) aren’t prohibited under the Inducement Law.

The Bottom Line

Unless you’re a compliance expert or healthcare attorney, we’d recommend seeking professional counsel to ensure that whatever reward or loyalty program you develop is structured in a way that satisfies all applicable compliance and legal requirements. That recommendation stands whether or not you’re working with Medicare patients, but especially if you are.

What do you think? Would you consider implementing a patient loyalty program in your practice? If so, consider this: the Advisory Board urges all providers to focus first “on efforts that increase access, minimize critical service flashpoints, and deliver a consistent, exceptional experience to the patient.”