This isn’t my idea. It was the subject of a great article I recently read written by an emergency department physician. She had just returned from a visit to her local Trader Joe’s (TJ’s). While there she had noted the happy, friendly employees, the local flavor of the store, the satisfied customers, and the good value of the products being sold. She asked why healthcare could not adopt some of the approaches that have made TJ’s such a thriving company. She made a very persuasive case.
As the doctor noted, the employees at Trader Joe’s are happy and helpful. It makes the shopping experience much more enjoyable for the customers. Happy employees make happy customers and happy customers keep returning to their local TJ’s. Why are TJ’s employees so happy? According to the author, there are a couple of reasons that would transfer well to healthcare.
TJ’s employees are carefully chosen and well-compensated. They make more than workers at similar positions in the industry. They are given good benefits and opportunities for advancement. TJ’s is routinely rated as one of the best places to work. The result is low turnover, less than 10% per year. The low turnover is one of the reasons TJ’s can afford to pay this way. It does not have to waste a lot of money training new hires to replace valuable employees who have moved on. By contrast, the turnover in the average hospital was 18% in 2024. The average acute care hospital spent $4.75 million as a result of turnover among bedside nurses alone. That is a lot of money that could be better spent on actual patient care. High quality patient care delivered by a staff with good morale that appeared to really care about patients would be a vast improvement over what we routinely have today.
TJ’s is also beloved because it is a good neighbor. It displays local art on its walls. It donates expired items to local food banks. It prides itself on being a national chain of neighborhood stores. As the author points out, hospitals can be good neighbors too. They can adopt programs that address the causes of many of the diseases they treat and reduce instances of poor health in the community.
TJ’s also displays great operational rigor that allows it to sell far more per square foot than more traditional grocery stores. Its stores are densely stocked with mostly private label items that combine low cost with high quality. Hospitals can also do a lot to streamline their operations and reduce middleman costs. Some hospitals are expanding their telehealth and other services that are provided outside the hospital building and reserving it for the patients who need acute care from happy front-line employees. Hospitals can also develop their own private label products and thereby reduce middleman and supplier costs.
TJ’s shuns bureaucracy. The healthcare system does not. Administrative costs at most hospitals are high. From 1990 to 2012, the healthcare workforce grew by 75%, but 95% of that growth was among purely administrative staff. The author questions whether we need 10 administrators for every physician.
In short, TJ’s has many lessons it can teach the healthcare industry. Is the industry ready to listen?
The post Why Can’t Healthcare Systems Be More Like Trader Joe’s? appeared first on Sandweg & Ager PC.