Physicians who work in urgent care situations become experts at making vital decisions quickly. They see a problem and, to the patient, they seem to instinctively respond.  We as healthcare providers know that the doctor calls upon years of training and experience rather than relying solely on a “gut feeling” about the injury or illness to make a diagnosis and develop a treatment plan.

This analogy holds true with most business decisions related to starting an urgent or immediate care facility. Basing decisions on gut feelings or personal “knowledge of the market” alone is dangerous. It’s best to make choices based upon knowledge and proven skill. This holds especially true in one of the first and possibly the most significant decisions you will make - where to locate your facility.

Recent estimates suggest that the volume of U.S. urgent care clinics has gone from a steady decline to a growth rate of about two clinics a week. (Fierce Healthcare, Daily News for Healthcare Executives, 10/8/07) So, in an increasingly competitive marketplace, the location of your facility can make or break your success. Large amounts of money are riding on the decision you make about your location. Obviously, you want to avoid building a facility in what seems to be a promising spot, only to have it perform poorly.

To make the best site selection decisions, healthcare facility decision-makers should think like retail executives. For years now, the leading retailers have utilized sophisticated customer analytics to determine where to locate new stores. Clearly, Subway, Starbucks and Pizza Hut are not just placing stores in or near every new strip mall.  They are carefully analyzing each trade area within each market to be certain that the right potential customers live in close proximity to their potential location.

Quite simply, customer analytics is the use of today’s advanced research techniques and digital technology to answer questions about consumers and their preferences. In the healthcare industry, the consumers are your patients. The same techniques used in the retail industry to make strategic decisions based upon customer analytics can be applied to the healthcare industry.

Many healthcare decision-makers have tuned into the importance of facility placement. As Paula Crowley, CEO of Anchor Health Properties in Wilmington, Del., stated, “Healthcare projects often were put in the back of an office park or on a healthcare campus in an area that was hard to find.  However, we think about location like a retailer, and we think of the project as a branch store. We want it to be as accessible and as convenient as possible.”

To determine the optimal location for your new facility, you may be able to research and analyze some of the critical variables yourself, but for most busy doctors, contracting with a proven resource in the field of patient analytics and healthcare site selection will be both more cost effective and yield a much more accurate result.  One of the most important questions answered by patient analytics is, “Where should I locate my new urgent care center or retail medical clinic?” It’s a truism in retail that “location, location, location” is everything. On the surface, the same holds true for locating a healthcare facility; your center needs to be in a high-profile location that is easily accessible. “It is not only important to find a proper community, but it is also important to find the correct street address for your urgent care center. A freestanding building on a busy thoroughfare is critical.” (David Stern, MD, Searchwarp.Com – Writers’ Community, Practice Velocity, 7/10/06)

But ensuring favorable logistics for your facility isn’t enough. Your center has to be convenient and accessible to the people who are most likely to be your patients. That’s where patient analytics comes in.

Until very recently, it was difficult to obtain extremely detailed information about all types of customers, including healthcare patients. It was even more difficult to interpret the data in a useful and profitable way. Today’s powerful digital tools and technologies make it feasible to dig deep into the minds and preferences of consumers and develop incredibly detailed profiles of individual patients. By extrapolating and interpreting this data, healthcare executives and physician entrepreneurs are able to obtain the answers to a wide range of critical questions about their businesses. These answers include where to locate a new site, how to allocate marketing budgets and how to determine which services to offer.

To make the best site location decision, you need three important pieces of information:

• Who your best patients are. You must be able to define your core group of patients, who can be considered your “best” patients.
• How many individuals who are most like your best patients live or work in the trade area where you are considering locating your facility.
• The boundaries of your trade area. You must know how far your prospective patients are willing to drive to obtain the service you offer and the drive times to your selected location.

Identifying Patients
How can you identify your best patients?

The process of identifying these patients begins with a detailed profiling of the healthcare entity’s existing patients. When there are no existing patients, as in the case of an entrepreneurial physician starting a new urgent care facility, the profiling is based on patients of similar type facilities in comparable trade areas.

In addition to medical records, patients are analyzed utilizing thousands of psychographic characteristics and consumer lifestyle behaviors. The psychographic behaviors analyzed range from retail buying habits and media habits to leisure activities, restaurants frequented and healthcare utilization. Core patients are further analyzed based on MDC and ICD-9 coding and can then be divided into categories based upon these detailed psychographic profiles.
Although the terms “demographics” and “psychographics” are commonly used interchangeably, they are actually different. Demographic data identifies people by broad categories such as gender, race, age, income and educational level. This information tells us very little about who the patient actually is and what his lifestyle preferences are. Two patients can have the exact same demographic profile but have different habits and interests. Put simply, demographics identifies people; psychographics identifies customers/patients.

It’s a bit unnerving to think about all of the data available to conduct this type of analysis. Today, most people in America leave a “data trail” wherever they go. Whenever someone uses a credit card, subscribes to a magazine, writes a check, fills out a survey, registers to vote, or changes the channel on cable TV, the information is collected, stored and sold. By analyzing the data, it’s possible to know an individual’s specific buying habits and lifestyle behaviors, including their healthcare preferences and needs.

The patient profile is analyzed against thousands of external databases that provide healthcare-related information. These databases include specific information about a household’s healthcare purchase decisions, including the likelihood to see a doctor, frequency of doctor visits, medications taken, types of insurance policies held, types of healthcare purchases made on the Internet (medications, vitamins, health information, etc.), as well as the types of media that household members respond to.

Potential Trade Areas
Once the best patients are fully profiled and identified, an examination can be made of any trade area in America to find other people who share the same psychographic attributes – people who are very likely to respond to the services offered by your healthcare facility. When many of these potential customers are aggregated in a single area, it indicates a fertile location for the facility.

Within the trade area, all competitors must be tagged, and in the case of organizations that are expanding within the market, all existing facilities must be tagged as well. In the United States today, there are between 12,000 and 17,000 urgent care facilities, according to the Urgent Care Association of America. You’ll want to know if your market is already saturated with providers similar to you.

Trade Area Boundaries
Determining an accurate definition of each facility’s service or trade area is imperative, too. An evaluation, based upon research, must be made to determine how far your patients are willing to drive for your services. Patients’ travel analysis is based on drive-time rather than distance in miles, as most people today are far more concerned with how long it takes to get to a destination than how many miles they must travel to get there.  This analysis generally is based on the time that about 75% of a doctor’s patients travel for his or her service. Drive time is specialty specific, and it varies from doctor to doctor and from area to area (rural vs. suburban vs. urban).

For example, an urgent care patient in a suburban area may be willing to drive only 9 or 10 minutes. Whereas a primary care patient might drive 15 minutes.  Those same patients might have to drive 20 minutes or more in a rural area.

Ideally, a drive-time trade area will be charted on a map to provide a visual depiction of drive times to the location. For instance, if it is determined that your patients will drive 12 minutes for your services, your trade area boundaries will reflect the actual driving conditions from every direction. For example, to the north of your proposed location, your trade area boundary may stretch 12 miles because of good highways, while to the south, the trade area could only reach 5 miles because of poor road conditions and/or congested traffic.

The Result: Optimal Site
When you combine core patient analysis with trade area and competitor analysis, a predictive patient acquisition model can be developed to pinpoint where the best locations are for a particular type of healthcare facility in a given market. With the knowledge gained by understanding who their patients are and how long they will travel to purchase services, healthcare providers are able to locate their facilities within a specified travel or driving distance of a significant number of their best potential patients.

Don’t leave your site selection choice to gut feeling or chance. With careful and thorough analysis and professional guidance, you can make an informed objective decision that will positively impact the success of your venture.

Dr. Ken Rabinoff-Goldman is Vice President of Buxton - HealthCareID, responsible for business planning, market development and sales focusing on superior site selection, targeted marketing and other strategic planning tools for the healthcare industry. Having served patients at his private practice in Albany, N.Y., for 22 years, Ken contributes greatly to Buxton’s executive medical experience by helping understand the needs of clients in the healthcare field.

Reproduced with permission of Immediate Care Business, January/February 2008.
For electronic usage only. Not to be printed in any format.
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