Business Review: Ways to Reinvent Service Delivery

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98 harvard business review December 2012

IllustratIon: harry campbell

and Amy L. Tucker

Ways to Reinvent Service Delivery

How to create more value for your customers and you by Kamalini Ramdas, Elizabeth Teisberg, “It felt lIke an elephant was sIttIng on my chest,” the patient explained. The doctor nodded understandingly. But the doctor was not the only one nodding her head. “You can put me down for that one as well,” quipped another patient. This is Club Red, a shared-medical-appointment concept, introduced at the University of Virginia Health System, which represents a radical innovation in the delivery of preventive cardiac health care. Traditionally, cardiology patients at UVA are allotted a half hour with the doctor. At Club Red, they are given a choice between that one-on-one appointment and a 90-minute shared appointment, in which the cardiologist sees each patient in a group setting with as many as 11 others.

December 2012 harvard business review 99

Four ways to reinvent service delivery

Members of Club Red don’t sit in a waiting area; they gather in a meeting room, where they fill out any needed forms and may chat informally while each patient sees the doctor privately for a brief physical exam. In the shared appointment, the doctor then provides individual counsel, goes over prescriptions, orders tests, and discusses progress, challenges, and future treatment plans for each patient. The Club Red consultation, while confidential among participants, is not private. That’s a big deal in health care, an industry where personal service and privacy have long been sacrosanct. The shared appointment clearly improves productivity: In 90 minutes a doctor can see 10 to 12 patients rather than three to five. Patients seem to prefer it as well: Satisfaction is at about 98%. Patients experience shorter waits for appointments and may even drop in to see the doctor in a group setting. They learn by quietly listening to the doctor counsel others and to patients’ questions and reactions. As a result, they become more knowledgeable about symptoms, lifestyle changes, medications they may need in the future, and how others deal with challenges. Patients rarely speak to one another in shared medical appointments and will often encounter different patients at each Club Red meeting. They can, however, opt in to more interaction with fellow attendees through recommended classes and exercise groups. Counterintuitively, Club Red members develop a stronger connection with the doctor, largely because they observe his or her expertise and empathy in dealing with many patients. The health benefits are tangible: Obese patients in Club Red achieve higher weight loss than those in traditional one-on-one consults. Unlike innovations in product manufacturing, those that radically redefine the delivery of a service are relatively rare. Service redefinition requires deep insight into how to meet clients’ needs. And because it is not generally driven by disruptive technologies, which often force people to confront basic assumptions, organizations struggle to overcome the mentality of “that’s not how we do it” and “our clients don’t expect that.” But as Club Red and other service providers are finding—as manufacturers did with lean production methods—these innovations can create tremendous value for them and for their customers. The challenge is to give managers a systematic way to question basic assumptions about how a service is defined and delivered and to see the opportunity to achieve dramatically better results. 100 Harvard Business Review december 2012


We spent four years tracking innovations in health care and finance, two sectors that have substantially redefined service delivery. In some cases we observed the transformation or worked with the team implementing it; in others we studied the result and discussed the transformation with its leaders. From our experience, observations, and data, we...
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