Overcome Market Share Myths and Kickstart Growth
It is true that patients will go to the hospital closest to them IF all other factors are equal. But the reality is — all other factors are typically not equal. This is why hospitals must focus on distance, along with several other factors, when they work toward driving growth.
Here’s what we’ve found to be true when it comes to driving hospital volume:
- Distance from hospital and market share are highly correlated
- Higher Case Mix Index and higher patient satisfaction result in higher market share
- Patient satisfaction is driven by a combination of services offered, scheduling availability, and quality of care
- If physicians referring to a hospital have little to no capacity for new patients, then growing market share is impossible
- Perception matters. Regardless of the reality, the way people perceive a hospital can sway their decision of whether or not to go there.
Knowing that distance is only one factor contributing to market share opens the door to a bigger discussion around how to drive growth.
As you plot out a strategy for growth, how can your hospital start measuring and tracking opportunities?
- Choose a mapping software and start tracking patient outmigration, physician loyalties, and service area opportunities. While distance is not the only factor to influence hospital volume, location and site placement does play a role. With the right technology in place, you can ensure your site selections are optimally positioned for increased revenue and market share.
- Knowing that patient satisfaction is driven by several factors, start reviewing historical data at the block group level for insight into previous year trends and fluctuations that can guide growth planning and arm you with the intelligence for informed and effective market growth.
- To address physician capacity concerns, consider completing Stratasan’s Community Physician and Provider Demand Analysis. This service outlines the inventory of providers—both physicians and advanced practice providers in a market—calculates a demographically adjusted demand model based on a weighted average of several models, and adjusts for potential provider retirements.
- Regularly track your growth plan execution to highlight the positive progress your team is making and encourage them to stay focused throughout the year.
For success, it’s critical to have a big vision for growth that is supported by your entire organization.
Here are some ways to get your team moving in the right direction:
- Create a strategic growth plan. Establish a roadmap of specific actions to transform your organization’s current situation into the desired future situation.
- Get to know your customer base. Through Tapestry Segmentation, you can understand your customers and their lifestyle choices in ways that will influence your growth strategies. Where do your customers spend their money and their free time? This information will give you insight that can help identify your patient types, optimal sites for hospitals, physician offices, FSERS, and urgent care locations. Stratasan’s team of mapping experts can guide proper use of the Tapestry Segmentation dataset ensuring you see higher response rates, focus on the most profitable growth opportunities, and invest your resources in the best possible ways.
- Establish organization-wide alignment around your growth plan. When you have system-wide alignment around your annual growth plans and a strategy in place for how to meet a set of trackable and measurable goals, your health system will be able to rally around those goals and work together towards success.
While distance is a strong indicator of market share, you can't rely on distance alone and neglect other considerations. Market share is a driven by several key factors —distance to patients, quality, Case Mix Index, patient satisfaction, public perception, and physician capacity.
Knowing that there are many factors at play, it’s important to take the next step and devise a plan that will kickstart volume and pave the way for your hospital to start reaching growth goals. In addition to the suggestions mentioned above, it may be time to engage with an outside partner with the experience and expertise to guide you through the growth process.
Request a discovery call with Sean Conway today and find out how Stratasan can support your annual growth goals and guide your team through a successful strategic planning process.
Article by Lee Ann Lambdin, SVP Healthcare Strategy for Stratasan