The Price of Impartiality
I’ll be the first to admit that KLAS has an odd business model. I am asked often by providers about the nature of our research, particularly when they learn that most of what we can offer will come to them in exchange for candid feedback and with no monetary cost. While we ask providers for their time and their stories, that is typically all we need to “open the vault.” The reason we are so willing to do so is because KLAS relies on providers’ candid feedback as the engine that keeps us running.
Without providers’ honest, open insights, KLAS wouldn’t get the reality checks needed to shed transparency on the industry. We expect providers to give us truth, and then we give back to them almost everything that KLAS has so that they can make informed decisions. This then begs the question, “How do you keep the lights on?”
Giving Data to Those Who Need It Most
Some may ask why we don’t charge providers, but in our mission to improve healthcare, providers are the ones who need that data the most! We don’t want to create barriers to them accessing the insights they need. Our goal is to give providers as much as we possibly can. So KLAS instead charges software companies for subscriptions to the data KLAS gathers.
When a vendor purchases a subscription, they get access to our database. They can see the commentary that comes in from our interviews of their own customers and their competitors’ customers as well. The vendor just gets access into the data; their scores don’t change.
Once, after a new vendor had come to KLAS and subscribed, they approached me at the end of the year said, “Adam, our scores didn’t change at all this last year.” I asked them, “Well, what did you do to change your scores? What did you do to help your customers?” They responded, “We subscribed, and we were pretty sure our scores would go up.”
Some vendors have learned elsewhere that if you pay, things start to look rosier for you. For these vendors, the KLAS lesson can be a painful one to learn. There is always some emotion involved with being told about one’s weaknesses, but we cannot be swayed from our core belief that if we don’t get the truth out to the market, we do a disservice to the hospitals, clinics, and even the vendors themselves. Truth will out.
Putting Your Feedback to Use
In reality, the data that KLAS provides can give these vendors all they need to improve, and there is no stacking of the deck in anyone’s favor. How do vendors use the data to improve? We find that the companies who look at the comments from customers and call us to ask, “What else can we learn? Tell us more!” find success in the long run. We already know that not every vendor will reach out. There are some who call me and protest the fact that they’re not number one.
I would be lying if I said that there is no pressure. KLAS gets enormous amounts of pressure from many vendors to change what we report about them. We always look to our advisory board and ask, “What would this board of providers say about this question that has been raised?”
One Vendor Experience
I remember one Sunday night when I got a cell phone call at home from the leader of a multi-million-dollar organization who wanted to talk. They asked if could we delay publishing one of our reports “just for a few short months.”
It was an interesting suggestion, to say the least. They explained, “We actually believe that what you’re saying isn’t wrong, but it’s going to confuse the market, and if you publish it, it’s going to cause more damage than good! So, why don’t you just hold off for a few months on the publishing of the report?”
I initially couldn’t figure out why they wanted us to postpone anything, but then it occurred to me that there were likely several buyers just about to decide on their products. If we published on time, it could impact those decisions. As I sat on the phone with this talented and persuasive CEO, I thought about our advisory board. What would these providers say? I said, “I will run this by our board. We will have them read the report, and if they say we should delay it, then we’ll delay it.”
I knew in my heart that they would look at it and insist that if it was true, we should publish it. They did exactly that. They said, “Adam, shame on you if you don’t publish this report right away.”
KLAS went ahead with the report. Looking back on the fallout from that experience, I would estimate that KLAS missed out on nearly $1 million that year due to vendors who canceled contracts and subscriptions. But I knew how I would have felt if a provider had approached me later and said, “Adam, we bought this product, and it has problems. You knew, and you didn’t tell me.” To me, maintaining our integrity is worth losing profit any day. Because of KLAS’ commitment to impartiality, I can look in the mirror and say that we have been truthful, done the right things, and helped our providers.