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What healthcare can learn from Netflix: An executive Q&A with Steve Jackson, President of NRC Health and Jeffrey Rakover, Senior Research Associate at Institute for Healthcare Improvement

This article was also published on Becker’s Hospital Review website.


Two conflicting demands press health system leaders today.

On the one hand, healthcare consumers want an experience that feels intimate and personal, one designed especially for them. On the other, faced with limited time and resources, health systems must also continuously find new ways to serve large volumes of patients, and at scale.

At first glance, these demands may seem irreconcilable. One of them pushes toward endlessly variegated care delivery; the other toward an ‘assembly line’ style of medicine.

How to square the circle? Through mass customization.

In this Q&A, NRC Health President Steve Jackson explains what mass customization is, and how it can help health systems realistically satisfy patients’ need for an individualized care experience.

1. What is mass customization, exactly?

It may be easier to start with what mass customization is not.

Mass customization should not be confused with ‘personalization,’ which is designing one-off products or experiences to suit a specific individual. That’s not a realistic aspiration for health systems (or most industries, for that matter).

Instead, mass customization aims to create experiences that feel individualized and personal, while observing the constrictions of serving people en masse. It’s a tricky balance to strike, especially in healthcare. But leaders searching for an exemplar of the practice ought to turn outside the industry, to Netflix.

Netflix uses mass customization to offer each of its millions of subscribers a unique home screen experience. Genre arrangements, recommendations, and even the poster-art for certain features will vary based on the subscriber’s viewing history and their demographic data. It’s an experience that feels wholly unique — much like the experience healthcare leaders should strive to offer their patients.

2. Streaming services are one thing. How can mass customization work in healthcare?

Of course, customizing a digital home screen is a far cry from customizing a care experience. Undergirding them both, however, is the same fundamental capacity — segmentation.

Netflix does not laboriously create a new home screen for every one of its users. As others have reported, it divides its subscriber base into thousands of segments, called ‘taste communities,’ that then each receive a customized version of the Netflix product. Crucially, these segments are meaningful enough that each viewer’s Netflix queue feels both personal and on-target.

Joanne Lynn, writing in Milbank Quarterly, recommends precisely this approach for healthcare organizations: “to stratify the customer population into groups that are sufficiently homogenous to enable arranging a set of commonly needed supports and services to meet their expected needs.”

Hospitals, in short, should create ‘taste communities’ of their own, and design services to satisfy them.

3. Health systems already segment patients. Will those segments suffice for mass customization?

Unfortunately, the short answer is no. Most existing patient segmentation revolves around clinical workflows, or population health management. While these segments are enormously important for hospitals to achieve high-quality outcomes, they’re not sufficient for creating care experiences that resonate with patients as individuals.

If they want to achieve mass customization, organizations will have to expand their conception of patient groups — exploring segmentation that incorporates patients’ identities, not just their clinical presentations. Psychographic models are essential for creating patient segments that are meaningful enough to inform health systems’ experiential design.

4. What kinds of psychographic segments should health systems be concerned with?

After years of validated research, and abstracting across a number of psychographic models developed via intensive population analysis, The Institute for Healthcare Improvement has developed five psychographic categories that reliably predict what patients want from their care:

Knowledgeable care seekers are proactive, conscientious patients who experience few barriers in navigating the health system.

Casual and cost-conscious consumers avoid unnecessary care, and may delay treatments if they’re too expensive.

Constrained and chronic patients feel overwhelmed by their health problems and will likely need extra support.

Traditional and reliable consumers trust their providers and will usually heed their advice.

Independent and naturalist patients seek alternative modalities of treatment, and view traditional hospital care with some skepticism.

Understanding these categories will prove enormously useful to health systems as they consider how to design their service delivery.

However, leaders should exercise some caution. These categories denote patients’ personalities. They don’t track neatly to existing demographic divisions.

More millennials are likely to fit in the ‘traditional and reliable’ category than you might expect; neither gender has a monopoly on the ’independent naturalist’ category. This means that, if health systems are looking to find psychographic segmentation, broad-based demographic data won’t be of much use. They will have to engage their patients in a meaningful dialogue about what they want from their care.

5. What should hospitals adjust, in order to suit these psychographic profiles?

In its mass customization efforts, Netflix’s algorithms do the heavy lifting. Health systems don’t have it so easy. Even if organizations uncover meaningful patient segments, distributing customized care experiences, across dozens of service lines, to tens of thousands of patients, demands extraordinary feats of coordination.

The IHI, though, has discovered that, among all the possible ways to alter a care experience, 5 variables matter above all else to patients’ experiences:

1) Patient needs.
2) Provider type.
3) Location.
4) Communication style.
5) Supplementary services.

Adjusting care experiences along these axes, in most cases, is more than sufficient to create encounters that feel both personal and meaningful.

As an example of how such adjustments work, take the case of a pregnant independent naturalist. They need (1) maternal care, and may prefer to see a (2) doula or midwife (3) at home. They would also likely want (4) frequent, personalized communications from their practitioner, and might be interested in (5) alternative therapies, like acupressure massage or water-birthing.

6. Where should health systems start?

Creating highly-specific care experiences is both demanding and complex. The good news, though, is that mass customization is not an all-or-nothing proposition.

Any step, however small, toward individualizing care is one that patients will appreciate. And often, the best first step to take is to pursue a genuine human understanding of patients. Mass customization starts when organizations learn who their patients are — that, above all else, is how they will learn how to serve them better.