How Healthcare can Learn from Chipotle’s “Cafeteria Plan”

Chipotle has used a novel delivery model and a strong focus on customer value to change much of what is known about customer service and success within the food service industry. This is even more impressive due to the relatively short time and the static industry in which these feats were accomplished. Because of Chipotle’s success, the rise of fast casual dining is now widely acknowledged, studied, and repeated. The journey from a single small location to becoming a definition of an industry change has demonstrated Chipotle’s impact on the food service industry.

Can lessons learned from Chipotle’s success have a meaningful impact on an industry like healthcare?

At its core, the fast casual success story revolves around identifying, defining, and delivering food with a focus on quality. Chipotle distinguished itself by identifying and defining what customers wanted. In turn, their understanding allowed the company to expand by developing ways of delivering value while scaling the business. Furthermore, defining what customers wanted helped Chipotle justify decisions on issues such as cost and service speed. Choices that seemed like missteps to other companies, such as line waiting, cooking in sight, high food costs, or simple (but customizable) menus became positive differentiators of the Chipotle eating experience. These factors have raised satisfaction among customers because customers feel that what they pay is commensurate with the experience they receive. Simply put, customers feel that “Yes, I am happy because I know, and like, what I am getting here.”

Some of healthcare’s problems today are remarkably similar to the issues Chipotle was able to overcome. Currently, healthcare faces the challenge of delivering care while addressing the needs of several players in a multiparty base (patients, providers, and payers). To do so requires alignment of opposing interests such as cost and access. However, due to pressing needs such as adapting to new government regulations, it has been difficult to focus on care delivery.

Nevertheless, the benefits Chipotle gained from taking the time to identify its focus are evident. Chipotle’s particular focus on food quality helped influence other choices such as location, staff, and décor; executives determined that these choices needed to be cost-effective, so as not to disrupt the balance that allowed thousands of Chipotles to open and succeed. If healthcare identifies a similar value to focus on, they can use it to help drive decisions in delivering care.

What similar central value might be a differentiator for service delivery in healthcare?

Some areas that deem attention are access to care, cost transparency, and quality of care. How does each of these address the needs of various parties?

  • Access to care is primarily enjoyed by a patient. Potentially, a provider or payer would find value through pricing or scheduling of access.
  • Cost transparency is an indirect benefit and is mostly realized by the patient. Many times, the provider or payer does not deem this as key to service, as they do not materially benefit from displaying how they are charging or spending.
  • Quality of care has been improved by ACOs, healthcare organizations of coordinating providers that seek to avoid unnecessary service duplication. By maintaining a high level of patient touch and accountability, medical errors are thus reduced. Patients obtain quality care and reduce costs, while providers and payers share in the savings they achieve.

If a focus on care quality addresses the needs of patients, providers, and payers, why hasn’t everything moved to the ACO model?

The ACO model, as well as any model that seeks to align multiple parties along a single focus such as quality of care, is not inherently self-stabilizing. All parties need to be aware of their expectations, raise concerns about imbalances among value that groups are receiving, and be willing to make necessary tradeoffs for value balance. Chipotle’s service model has helped demonstrated this to customers by clarifying the following:

  • If you want both the best service and best price, you have to be prepared to wait.
  • If you want the best price and speed of service, do not expect world-class service.
  • And if you want consistent quality on all fronts, be prepared to trade off waiting in line, customization, or the number of options and choices allowed.

The most important aspect of the service model that Chipotle developed is that tradeoffs are communicated to customers, and then painted in a positive light to indicate what customers get for making a given choice. Similarly, healthcare needs to learn how to make these tradeoffs apparent so that what seems like burdens or hardships (e.g. waiting, paying more, or lack of choice) turn into positive differentiators of the experience (e.g. waiting for higher quality, paying more for access to superior treatment, lack of choice because the few options available are excellent). This will help patients feel that the amount they pay is commensurate with the quality of healthcare they receive. Simply put, patients will feel that, “Yes, I am happy because I know, and like, what I am getting here.”

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