Creating a Path to Long-Term Sustainability Despite Profound Market Contraction
CHALLENGE
A regional health system that has thrived for decades faced market shifts that threatened its long-term survival. With the collapse of a key industry in the region, unemployment skyrocketed, and population declined by nearly 7% in a matter of months reversing population growth trends of the preceding five decades. Within their service area competitors were beginning to chip away at market share, particularly for highly profitable elective procedural encounters. At the same time, the health system’s referral base was beginning to dramatically shrink as providers left the market and others, affiliated with local competitors or themselves, became competitors. An award-winning bed tower constructed less than 10 years earlier resulted in older areas of the hospital campus sitting vacant, eating up previous capital. The client needed a plan to stem the losses and position itself for long-term sustainability.
20+ stakeholder interviews
Customized demand forecasting
Competitor analysis
Market share shift analysis
Programmatic viability studies
Clinical functionality analysis
Patient consumer segmentation
Patient consumer focus groups
Physician workforce demand modeling
Horizon scanning
Key room and space need determination
Facilitated co-creation sessions
APPROACH
A comprehensive approach was taken to understand the current state and all of the variables that needed to be considered as a part of the planning process. Deep analysis into the health system’s brand perceptions amongst local consumers was overlaid with an exploration of consumer behaviors in the market. Analogous research aided in identifying experience characteristics important to consumers in the market as well as tolerance of travel distances to access various services.
RESULTS
The master planning process successfully identified a number of opportunities to improve access and convenience for consumers in the region. Available space on the main hospital campus will be utilized to add ambulatory procedural services while some inpatient units will be modified and converted to support observation and extended recovery care at a lower operation cost.
Strategic firewalls were identified around the market to protect market share and create a launching pad for growth. Included as a part of the strategic firewalls is an ambulatory care center located in proximity to a competitor. The ambulatory care center will offer primary care, specialty care and diagnostic services with expansion capabilities to support the addition of urgent care and ambulatory procedural services.
3
new sites of service recommended
20%
shift in market share targeted