Over the last decade, the healthcare industry has experienced a rapid shift toward a more retail-friendly, consumer-focused model.
According to Accenture, the number of walk-in retail clinics is predicted to double in 2015. This follows on the heels of an already rapid expansion in retail healthcare over the past decade in the United States.
While consumer decision making can vary widely when it comes to purchasing healthcare services, data from research organizations such as Rand Health are finding that the overwhelming trend in consumer behavior toward greater use of retail clinics falls into three categories: convenience, access, and price transparency. Put simply, patients are seeking the healthcare services that are offered in a convenient location, with easy access, along with competitive and transparent pricing.
While the most rapid growth in retail healthcare has been in the treatment of simple acute conditions and preventive care, there is growing evidence that the services offered in retail locations will continue to push the boundaries into more complex specialties such as orthopedics and sports medicine. As this trend continues, it is important that organizations, especially in metropolitan areas, position themselves to compete successfully in the retail healthcare market. The following five success factors have been identified as critical to the success of a facility location strategy:
1. Organizational Mission/Vision: Ultimately, an effective retail strategy should be driven by a healthcare delivery vision that ties retail expansion into its overarching organizational structure. Retail locations can often serve as main campus "deflators" and less expensive alternatives to main campus construction. Retail locations can also serve as an opportunity to expand market penetration in an existing or emerging location.
2. Service Strategy: Having a clear vision for the services that are going to be offered in a new retail location will ultimately drive the target population and therefore influence the ideal geographic location of the facility. Services such as urgent care, primary care, orthopedics, and sports medicine all lend themselves to a unique patient population. The scope of services such as ambulatory surgery, pharmacy, and imaging also influence ideal location characteristics.
3. Target Population: Depending on the services being offered in a particular retail healthcare facility, the target population will likely be vastly different. Urgent care locations lend themselves to more affluent, younger populations in metropolitan areas. Walk-in sports medicine concepts tend to locate in highly active, sports-oriented populations near large schools or sports complexes. Once the target population has been defined, the next step is to perform a detailed demographic evaluation to better hone in on the ideal geographical location for a new retail facility.
4. Competition: The service strategy of the facility can drive, or be driven by, the competition in a given location. Too often, organizations execute facility location strategies that are reactive in nature, responding to a competitor by duplicating a retail service in the same area. A reactive strategy can tie up limited capital resources in a saturated market, thereby delaying or possibly preventing expansion into new markets with more favorable opportunity.
5. Service Influencers: In the convenience-driven healthcare delivery model, it is important to consider the relationship a retail location will have to other services, providers, and referrers within and outside of the delivery system model. Having the vision of the geographical delivery model will help orient a preferred location for the new retail location.
Nicholas Smith has significant experience in a variety of areas within the Wipfli healthcare practice. His major areas of focus include market and service line planning, physician demand planning as well as all aspects of facility master planning. Over the years, Nicholas has served many clients including health systems, academic medical centers, critical access hospitals as well as physician groups and ambulatory surgery centers.
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