3 Signs It’s Time to Revisit Your Service Area Definition

3 Signs It’s Time to Revisit Your Service Area Definition

Key Considerations for Proactive Healthcare Planners

By Gavin Chance

A well-defined service area assists with targeted marketing and physician business development efforts. It can also help identify who your true competitors are by service line. 

Market transitions and population shifts can alter your service area. These changes can sometimes be subtle, but still come with noteworthy effects. It’s important to pay attention to the signs that indicate change and be ready to reassess your service area definitions when appropriate. In this post, we’ll discuss three important signs to watch for.

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But first, let’s briefly clarify one important detail: how should you define your service area?

By definition, a service area is “who an organization serves.” Not who you want to serve, but the geography you actually, currently serve. There is no one-size-fits-all way to define a service area. In fact, there are several ways to do it. Which one is best? The answer is, it depends. Defining a service area is equal parts art and science. Click here to learn how to define your service area and be on the lookout for an upcoming post on the common mistakes to avoid when defining your service area. 

 

Indicators that You May Need to Redefine Your Service Area

1. Changes in Market Competition

A facility opening or closing in your market should be a tip-off that changes could be on the way. It’s time to review relevant patterns and patient movements to see how your market share could be impacted. 

The closing of a local competitor presents the opportunity to gain new patients. As you consider your growth potential, start with market data—a clear demonstration of how much opportunity exists within the market—along with current trends for those patients, such as the following:

  • How much of the market was engaged with the facility that closed? 
  • What services were primarily offered by this facility and can you fill the gap?

Meanwhile, the addition of competition will present other concerns. Gathering market data will help you to identify trends about your service area and specific procedures and treatments being used within your market. You can then be sure you are offering the right services to meet the needs of your market, and then aggressively get the word out about your offerings.

 

2. An Increase or Decrease in Patient Visits

Large shifts in your patient visit volume is another good indicator that changes are happening within your market and it could mean it’s time to amend to your service area. 

An increase in your secondary service area may indicate a shift in demand. Ultimately, this secondary area could develop into an additional primary service area, especially with the right marketing efforts and service offerings. 

A decline in visits could mean patient needs and preferences have changed. This could lead to a reduction in service area size; but before that happens, take time to revisit your market data and look for variances, such as the following: 

  • Has the service area population size changed or are they traveling outside your service area for specific procedures? 
  • Has a competitor come into the picture who is enticing your patients to make a provider change? If so, analyze what they are doing and what’s working. 
  • How can you adjust your strategy, based on what you uncover, to regain your market standing?

 

3. Developments Within Your Market

When construction occurs within your market, such as a new road or housing development, patient access to your facility could be impacted—either increasing accessibility to your facility or making it more difficult. Your patient population could also shift—and likely grow—with market development. These are both good markers of change and will likely mean a service area redefinition. 

The addition of restaurants, shopping outlets, or new housing can increase traffic flow by your medical facility, placing it on the same route as other day-to-day activities. The convenience of having your medical office in the vicinity of other activities could be a major plus for driving patient growth—never underestimate the power of convenience! 

And just like in the old Goldilocks fairy tale, too much or too little of anything is never just right. When relating this to developments within your market, keep in mind that changes in the volume of foot or vehicle traffic surrounding the area of your facility could significantly impact the volume of patients coming to your facility. A change that leads to too little traffic, and you simply may no longer have the influx of people needed to support your clinic. Conversely, a change that drives too much traffic, and your patients could have a hard time getting into the parking lot. Striking that “just right” balance of volume is key and construction within your market could impact your patient flow significantly enough that your service area definition could be impacted as well.

 

The Takeaway

Regular check-ins on your service area will allow you to be proactive and maintain a healthy business. If you miss these markers of change, it could lead to the need for reactive (and potentially hasty) measures to remedy a decline in patient activity. Make sure you are properly defining your service area, and then be on the lookout for common mistakes when defining your service area, something we’ll cover in more detail in an upcoming post. 

For more information on how Stratasan can help you stay on top of your service area definition, contact us and schedule a discovery call today.

Article by Gavin Chance, GIS Manager at Stratasan

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