For hospitals, a strategy to expand market share requires more than adding physicians to the ranks. Hospitals can strengthen their market share by borrowing efficiencies and strategies that have traditionally been mainstays in the retail industry. John R. Thomas, CEO of Irving, Texas-based MedSynergies, says it is time for providers to switch from the mindset of "What should we do?" to one of "What do our patients need?" when creating a strategy to boost their patient base.
Hospitals' traditional approach to expand market share was centered around the notion of "heads in beds," or how many patients were present in the physical hospital facility or on the hospital property. This included hospital discharge volume, emergency room visits per year, newborn deliveries and bed occupancy rates. The modern principle of population health — providing healthcare instead of sickcare — is quickly antiquating this type of approach.
Now, effective hospital market share strategies are centered around what Mr. Thomas calls "a retail-delivery system," which involves lower-cost settings for care delivery that are also more convenient. This model is built upon principles that are all too familiar in the retail industry, but somewhat new to healthcare. "It's more patient-friendly and accessible. The whole experience is different from the traditional hospital experience," says Mr. Thomas.
Here are five principles from the retail industry that can help hospitals build an effective market share strategy and expand their patient base.
1. Emphasize convenience. Providers should not underestimate what aspects of healthcare patients may find burdensome, especially when those patients are sick. Even a walk through the hospital's multi-level parking structure can be overwhelming. A huge component of a modern-day retail delivery system is convenience, which involves the provider's location, hours, service level and other initiatives to bring the patient to the center of the care process.
For health systems, to create and provide a convenient experience is a stray from the all-too familiar and unfortunate norm of healthcare delivery, which resembles something like this: You visit your primary care physician for a check-up. The primary care physician says you need a blood test, but that service is not available in his or her care setting. Thus, the PCP sends you to an affiliated lab for bloodwork, and that lab is located elsewhere. It requires another appointment, another request for time off of work and another means of transportation.
From there, depending on the blood test results, the chain of required appointments, providers and consequential burdens for the patient may only continue to grow. Mr. Thomas describes these utilization patterns as "one-one-one" — short, episodic and isolated from one another. Conversely, a retail delivery system promotes care delivery that is centered around the convenience of the patient rather than the provider. This might include same-day access for appointments and campuses that centralize services that often require repeat visits, such as labs or obstetrics.
2. Identify and meet distinct local market needs. Defining a market is not the end game for hospitals. After health systems have completed this step, they must factor "sub-markets" into their strategy to grow their patient base. "The market can't be the whole world," says Mr. Thomas. "You have to do analysis about what the submarkets are."
By identifying submarkets, systems can tailor their services and delivery models to match the population's distinct healthcare needs. Depending on an array of demographic variables, those needs can be quite different. "The needs of a Medicare population will be different than those of a non-Medicare population. The needs of a Medicaid population may be different from a Medicare or non-Medicare population," says Mr. Thomas. If these varying needs are not identified and addressed, systems may end up with several strategies that compete with one another, resulting in self-sabotage.
Variables that define a sub-market include drive times between providers, the age of the population, income levels and disease states, among other demographic factors. For example, say a hospital's market falls within a 25-minute drive time between the next hospital. Within that market is a submarket of people, 80 percent of whom are Medicare enrollees.
Based on this submarket, the health system's providers will encounter more cases of age-related disease. Internal medicine will likely be in greater demand than family practitioners. The system won't need pediatricians as much as gerontologists. There will also be more orthopedic issues related to hips and falls, and a physical fitness center for rehabilitation services may be needed. For this Medicare-heavy submarket, home healthcare may be a balanced solution for people who don't have the ability to drive, and the system may also have to factor bus route issues for patient transportation. The system will also need enhanced counseling at the pharmacy level to help elderly patients with medication adherence.
These are just a few of the considerations for providers to better meet the needs of one distinct submarket, and health systems should do this type of analysis and strategic planning for each submarket they identify. "It's about looking for what patients might need versus what services the system may want to deliver," says Mr. Thomas. "The mindset from this is a change from, 'What do we do?' to 'What do patients need?'"
3. Be proactive in patient outreach. Once a hospital or health system has defined its submarkets, it should begin patient outreach. This process is centered in proactive customer service, another mainstay in the retail industry. For patient outreach, hospitals use administrative patient data derived from optimized revenue cycle management information — thus, not requiring electronic medical records — to reach patients and help manage their continuum of care.
There's an element of preventive care in this process, as well, as patient navigators can help ensure patients have access to healthcare information in a timely manner. Let us return to the example of the Medicare submarket. In the patient outreach process, hospitals can use data to determine if Medicare patients have scheduled their annual wellness visits. The data can also inform providers about how many Medicare patients are also diabetic, and how many of them have not scheduled an office visit in more than 180 days.
Patient outreach allows providers to go beyond the identification of a submarket, such as one that is 80 percent Medicare patients, to better understand those patients' utilization rates, care patterns and historical health information. This in-depth understanding of the patient base can empower hospitals and health systems to better attune their "customer service" by providing services like care navigators, web-based appointment scheduling and transportation.
4. Adopt a customer opportunity perspective. Hospitals and health systems need to detach themselves from historical data. Rather than basing market share strategy on patient utilization rates in the past, Mr. Thomas recommends hospitals continually collect and refine data to incorporate new metrics to better understand patient patterns. He raised just a few questions hospitals should be asking as they build a market strategy: "How many patients did the system see last month? How many patient visits were made to the emergency department versus the physician group? What percentage of the market population does that represent?" says Mr. Thomas.
He also says that market share strategy is moving from encounter-based care to capturing patients providers may not necessarily encounter in traditional care settings. "How many patients have visited the hospital who haven't had wellness visits in 12 or more years? Those are the metrics providers need to start looking at, and they need to ask themselves, 'Who is missing?' It's not about the patients who are there, but who are missing," says Mr. Thomas.
For instance, when a woman delivers a baby at a hospital, the health system should refocus its strategy on how to form relationships with that mother, father and children — the complete family unit versus an individual patient. "We're taking something from the banking business here," says Mr. Thomas. "We're looking at market share from a patient perspective to a customer opportunity perspective. That doesn't mean utilization has to increase, by the way. You want the right utilization at the right time in the right setting under the right practice economics."
5. Disrupt the notion of "patient loyalty." The danger all health systems face is to assume that physicians and patients are not portable, says Mr. Thomas. In the past, the healthcare industry warmly embraced the idea of patient loyalty. The concept of people calling healthcare providers "my physician" or "my hospital" was beloved. But this notion of loyalty, as comforting as it may be, does not belong in a system's market share strategy. Mr. Thomas says hospitals and health systems should remain uncomfortable, and build their strategy in a way that assumes patients and physicians are inconsistent.
"The 'preferred hospital' or 'preferred doctor' has a velocity of churn that, historically, was not seen or understood," says Mr. Thomas. "A patient's choice of a health system can be driven by a bigger set of economics than ever before. Patients, physicians, cases — they could all leave. You might have the only hospital in town, but you should treat patients as if they may go to a competitor's physician tomorrow. Year-over-year loyalty should not be relied upon. Base no assumption on historical loyalty."
Conclusion
By incorporating these retail strategies, hospitals can better meet submarkets' unique needs, proactively direct and manage their care patterns and identify patients that may be potential customers, even though data shows they have been absent from their healthcare years. These retail principles also promote a convenient care experience, which will drive patient visits in a very organic way.
But most importantly, hospitals should not rest on their laurels or assume they will retain their position as a preferred provider in their market. "Hospitals and physicians today both have significant incentive to provide high quality care in the marketplace, and align themselves to make the patient the prime customer," says Mr. Thomas. "If they do not work together, there are massive differences, such as poor care coordination and patient dissatisfaction. Then, another healthcare provider comes in and says, 'How do we make this better?' The idea of [health systems] staying where they are — it's not an option."
Marketing Physicians to Grow Market Share
Health System Strategy: Remaining Relevant by Building Primary Care Delivery Beyond Physician Employment
Hospitals' traditional approach to expand market share was centered around the notion of "heads in beds," or how many patients were present in the physical hospital facility or on the hospital property. This included hospital discharge volume, emergency room visits per year, newborn deliveries and bed occupancy rates. The modern principle of population health — providing healthcare instead of sickcare — is quickly antiquating this type of approach.
Now, effective hospital market share strategies are centered around what Mr. Thomas calls "a retail-delivery system," which involves lower-cost settings for care delivery that are also more convenient. This model is built upon principles that are all too familiar in the retail industry, but somewhat new to healthcare. "It's more patient-friendly and accessible. The whole experience is different from the traditional hospital experience," says Mr. Thomas.
Here are five principles from the retail industry that can help hospitals build an effective market share strategy and expand their patient base.
1. Emphasize convenience. Providers should not underestimate what aspects of healthcare patients may find burdensome, especially when those patients are sick. Even a walk through the hospital's multi-level parking structure can be overwhelming. A huge component of a modern-day retail delivery system is convenience, which involves the provider's location, hours, service level and other initiatives to bring the patient to the center of the care process.
For health systems, to create and provide a convenient experience is a stray from the all-too familiar and unfortunate norm of healthcare delivery, which resembles something like this: You visit your primary care physician for a check-up. The primary care physician says you need a blood test, but that service is not available in his or her care setting. Thus, the PCP sends you to an affiliated lab for bloodwork, and that lab is located elsewhere. It requires another appointment, another request for time off of work and another means of transportation.
From there, depending on the blood test results, the chain of required appointments, providers and consequential burdens for the patient may only continue to grow. Mr. Thomas describes these utilization patterns as "one-one-one" — short, episodic and isolated from one another. Conversely, a retail delivery system promotes care delivery that is centered around the convenience of the patient rather than the provider. This might include same-day access for appointments and campuses that centralize services that often require repeat visits, such as labs or obstetrics.
2. Identify and meet distinct local market needs. Defining a market is not the end game for hospitals. After health systems have completed this step, they must factor "sub-markets" into their strategy to grow their patient base. "The market can't be the whole world," says Mr. Thomas. "You have to do analysis about what the submarkets are."
By identifying submarkets, systems can tailor their services and delivery models to match the population's distinct healthcare needs. Depending on an array of demographic variables, those needs can be quite different. "The needs of a Medicare population will be different than those of a non-Medicare population. The needs of a Medicaid population may be different from a Medicare or non-Medicare population," says Mr. Thomas. If these varying needs are not identified and addressed, systems may end up with several strategies that compete with one another, resulting in self-sabotage.
Variables that define a sub-market include drive times between providers, the age of the population, income levels and disease states, among other demographic factors. For example, say a hospital's market falls within a 25-minute drive time between the next hospital. Within that market is a submarket of people, 80 percent of whom are Medicare enrollees.
Based on this submarket, the health system's providers will encounter more cases of age-related disease. Internal medicine will likely be in greater demand than family practitioners. The system won't need pediatricians as much as gerontologists. There will also be more orthopedic issues related to hips and falls, and a physical fitness center for rehabilitation services may be needed. For this Medicare-heavy submarket, home healthcare may be a balanced solution for people who don't have the ability to drive, and the system may also have to factor bus route issues for patient transportation. The system will also need enhanced counseling at the pharmacy level to help elderly patients with medication adherence.
These are just a few of the considerations for providers to better meet the needs of one distinct submarket, and health systems should do this type of analysis and strategic planning for each submarket they identify. "It's about looking for what patients might need versus what services the system may want to deliver," says Mr. Thomas. "The mindset from this is a change from, 'What do we do?' to 'What do patients need?'"
3. Be proactive in patient outreach. Once a hospital or health system has defined its submarkets, it should begin patient outreach. This process is centered in proactive customer service, another mainstay in the retail industry. For patient outreach, hospitals use administrative patient data derived from optimized revenue cycle management information — thus, not requiring electronic medical records — to reach patients and help manage their continuum of care.
There's an element of preventive care in this process, as well, as patient navigators can help ensure patients have access to healthcare information in a timely manner. Let us return to the example of the Medicare submarket. In the patient outreach process, hospitals can use data to determine if Medicare patients have scheduled their annual wellness visits. The data can also inform providers about how many Medicare patients are also diabetic, and how many of them have not scheduled an office visit in more than 180 days.
Patient outreach allows providers to go beyond the identification of a submarket, such as one that is 80 percent Medicare patients, to better understand those patients' utilization rates, care patterns and historical health information. This in-depth understanding of the patient base can empower hospitals and health systems to better attune their "customer service" by providing services like care navigators, web-based appointment scheduling and transportation.
4. Adopt a customer opportunity perspective. Hospitals and health systems need to detach themselves from historical data. Rather than basing market share strategy on patient utilization rates in the past, Mr. Thomas recommends hospitals continually collect and refine data to incorporate new metrics to better understand patient patterns. He raised just a few questions hospitals should be asking as they build a market strategy: "How many patients did the system see last month? How many patient visits were made to the emergency department versus the physician group? What percentage of the market population does that represent?" says Mr. Thomas.
He also says that market share strategy is moving from encounter-based care to capturing patients providers may not necessarily encounter in traditional care settings. "How many patients have visited the hospital who haven't had wellness visits in 12 or more years? Those are the metrics providers need to start looking at, and they need to ask themselves, 'Who is missing?' It's not about the patients who are there, but who are missing," says Mr. Thomas.
For instance, when a woman delivers a baby at a hospital, the health system should refocus its strategy on how to form relationships with that mother, father and children — the complete family unit versus an individual patient. "We're taking something from the banking business here," says Mr. Thomas. "We're looking at market share from a patient perspective to a customer opportunity perspective. That doesn't mean utilization has to increase, by the way. You want the right utilization at the right time in the right setting under the right practice economics."
5. Disrupt the notion of "patient loyalty." The danger all health systems face is to assume that physicians and patients are not portable, says Mr. Thomas. In the past, the healthcare industry warmly embraced the idea of patient loyalty. The concept of people calling healthcare providers "my physician" or "my hospital" was beloved. But this notion of loyalty, as comforting as it may be, does not belong in a system's market share strategy. Mr. Thomas says hospitals and health systems should remain uncomfortable, and build their strategy in a way that assumes patients and physicians are inconsistent.
"The 'preferred hospital' or 'preferred doctor' has a velocity of churn that, historically, was not seen or understood," says Mr. Thomas. "A patient's choice of a health system can be driven by a bigger set of economics than ever before. Patients, physicians, cases — they could all leave. You might have the only hospital in town, but you should treat patients as if they may go to a competitor's physician tomorrow. Year-over-year loyalty should not be relied upon. Base no assumption on historical loyalty."
Conclusion
By incorporating these retail strategies, hospitals can better meet submarkets' unique needs, proactively direct and manage their care patterns and identify patients that may be potential customers, even though data shows they have been absent from their healthcare years. These retail principles also promote a convenient care experience, which will drive patient visits in a very organic way.
But most importantly, hospitals should not rest on their laurels or assume they will retain their position as a preferred provider in their market. "Hospitals and physicians today both have significant incentive to provide high quality care in the marketplace, and align themselves to make the patient the prime customer," says Mr. Thomas. "If they do not work together, there are massive differences, such as poor care coordination and patient dissatisfaction. Then, another healthcare provider comes in and says, 'How do we make this better?' The idea of [health systems] staying where they are — it's not an option."
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