What would having the best reputation in the business do for your business? In answering this question, most leaders would respond, “Everything!”

The same applies to hospitals. Reputation is one of the most important drivers of a hospital’s or health system’s success.

Benefits of a strong reputation are almost endless: A leading reputation drives patient preference, physician referral and physician affiliation. Reputation strengthens physician alignment with hospital and system goals. Reputation drives financial strength and increases negotiating power with payers and contractors. And a leading reputation strengthens the hospital or system’s capacity for innovation.

For starters, a precise understanding of your hospital’s reputation is a significant tool for governance and decision-making.

A strategic tool

Reputation and strategic thinking go hand in hand. In fact, thinking about reputation can foster strategy.

The agenda of most hospital and system boards is full, and it often is growing at an alarming pace. What’s more, the questions and decisions facing the board are becoming more complex and are increasingly outside the realm of traditional board member expertise. Those decisions more often than not involve significant capital expenditures for new technologies.

Boards need to find a better way both to deliberate on the overall agenda and to strengthen their understanding of topics from an investment-and-return perspective. Adding a measurable understanding of the impact each agenda item could have on the hospital’s reputation can bring significant and new guidance to the board’s decision-making process.

Reputation can therefore be viewed as a strategic tool for board deliberation. The key question, however, is how to define and measure that reputation.

Articulating beliefs

The most instructive definition of reputation is an understanding of what constituents believe to be true about an institution. This articulation of believed truths is what social psychologists often refer to as a “belief structure.”

In the context of health care, belief structure is the term used to describe the set of beliefs — held by a patient — that most powerfully influence the patient’s decisions for selecting a hospital or provider of medical care.

A belief structure is typically composed of two distinct types of beliefs: categorical and evidence based. Categorical beliefs are assertions, such as, “Community Hospital is the best in heart care.” Evidence-based beliefs represent factual observations supporting the categorical assertions, such as, “Community Hospital has been rated by an independent source as the leading heart center for the past 20 years.”

Consider the example of a middle-age man who has recently been diagnosed with early stage heart failure. Ask him where he’d most likely go to receive medical care, and (if he’s like most), he’ll express preference for the top-rated heart center in the region (for this example, let’s call it Community Heart Center).

Asked why he feels preference for Community Heart Center, and the patient will provide a litany of beliefs, perhaps including that Community Heart Center:

  • Has been consistently rated as the top heart center in the region for the past 20 years.
  • Is also rated as the leading center for treatment of congestive heart failure in the region.
  • Is the leading director and participant in clinical trials for treatment of a unique condition.
  • Is considered to offer a state-of-the-art heart transplant and artificial-assist-device program (something heart failure patients may have to consider one day).

These beliefs are a crucial part of the total belief structure supporting patient preference for Community Heart Center.

A belief structure is unique to each organization and is understood in the context of each organization’s competitive market. As such, a belief structure can be measured across a range of hospital care types, for a range of individual conditions and among a range of specific hospital competitors.

Developing the belief structure for an individual hospital is most appropriately achieved through a formal market research procedure. At its best, the process involves a quantitative study — yielding statistically predictive data. Depending on the size of the institution, however, even a far less–sophisticated data-gathering technique can bring valuable insight.

Board members can begin to consider the belief structure behind their hospital’s reputation by exploring their own views and encouraging management to collect data directly from hospital patients.

Better decision-making

A belief structure can be used as a new tool for decision-making in the boardroom. Once in place, a belief structure establishes a series of measures indicating how much each of the individual beliefs about the organization contributes to its overall reputation.

For example, the board of Community Hospital may learn from patients that the most powerful driver of its reputation is its rating as a leading heart center (a categorical belief) with a state-of-the-art heart transplant and artificial-assist-device program (representing the strongest individual, evidence-based belief).

Those measures of the current belief structure provide hospital management with a good understanding of what drives the organization’s reputation.

The belief structure can also measure the potential value of any new investment or action under consideration by the hospital or system. For example, the board of Community Hospital could ask, “What if our hospital were to offer a state-of-the-art intraoperative neuromonitoring system in neurosurgery, putting it on the leading edge of surgical cancer work?”

Depending on the results of its data collection, the board would be able to identify the relative influence that the addition of expertise in surgical cancer could bring to the hospital’s reputation. Alongside the influence of existing beliefs, such as leadership in heart transplant capabilities, the board would thus understand, from an investment-and-return perspective, the contribution that the neuromonitoring system would bring toward enhancing the hospital’s reputation.

Strategic savvy

A torrent of new technologies are vying for capital dollars on many board agendas. Those agendas can become overwhelming without some way to manage the complexity of the decisions your board is asked to make.

Understanding a belief structure helps the board predict the impact of each agenda item on patient preference. The board can therefore focus its thinking more strategically toward those items serving the hospital’s overall reputation.

The articulation of a belief structure, based on an understanding of reputation, provides the board with a new and enhanced way to deliberate on the complex and challenging questions facing the hospital or health system today.

Michael J. Wilberding (mike.wilberding@traversebaygroup.com) is a principal with the Traverse Bay Strategy Group in Eastpointe, Mich.

Questioning patients on reputation

Patient interviews can be key when trying to measure a hospital’s reputation. An interview with a patient is intended to capture what the interviewee believes to be true about the hospital or health system. Questions should be open-ended and move from the general to the specific. A typical set of questions for patients of “Community Hospital” might include the following:

  • “Please tell us what you believe to be the greatest strengths of Community Hospital.”

The questioner would then probe the basis for each stated belief. For example:

  • “You said that heart care is one of the greatest strengths of Community Hospital. What reasons cause you to believe the hospital is excellent in heart care? Please be specific.”
  • “You also said that you believe one of Community Hospital’s greatest strengths is in orthopedic surgery. Please tell us why you believe that to be true. Again, please be specific.”

Data collection can be expanded to gather an understanding of the competitive standing of the hospital — by simply asking the same range of questions but with an added focus on competition:

  • “You indicated that you believe orthopedic surgery is an important strength of Community Hospital. How would you compare Community Hospital with [an alternative hospital] in orthopedic surgery?”

Interviewees then can be asked to rate how influential each of their beliefs is with respect to their sense of preference for Community Hospital, again in comparison with their view of competing hospitals.

With the data collected in this way, it’s a simple task to identify and rank the most-common categorical themes, as well as the most-commonly noted strengths and specific capabilities that stand as factual evidence supporting those themes. — Michael J. Wilberding

Encouraging board discussion

As you consider the belief structure behind your hospital’s reputation, ask yourselves:

  • What are the most important strengths of the services offered by your hospital or health care system?
  • When you think of your hospital or system, what are you most proud of?
  • In what important ways does your hospital or system most outperform the competition?
  • What specific and distinctive services does your hospital or system lead in today? What specific facts can we cite to support that view?
  • What specific and distinctive services could the hospital or system lead in in the future? What specific facts can we cite to support that view? — Michael J. Wilberding