Diagnosing the Proper Direction - Using Science to Drive your Location Strategy

Physicians are expert at making critical decisions in a timely and accurate manner. The diagnosis of a problem, followed by the prescribed remedy to that problem, occurs in a fascinating blur of instinctive efficiency when viewed through the eyes of the patient.  Physicians lean on years of training and experience, combined with their ability to take data about the patient’s condition as inputs into their decision-making processes.  In other words, their reliance on science and observation is paramount to their profession.

Now take this analogy and apply it to the business of healthcare.

Healthcare providers have historically relied on a combination of gut instinct and perceived knowledge of the market when formulating their site selection direction.  Emerging trends in the industry (integration/acquisition of physician practices, increased competition, continued consolidation of providers into larger health systems), along with a growing proliferation of data, are relegating that combination to a status akin to that of the typewriter and the fax machine. 

To begin making more informed decisions regarding physician and facility placement, you will need answers to the following questions:

  • Who are your patients (by desired service line or facility type)?

  • Where are these patients (and prospective patients that “look” just like them) located?

  • What variables should be included in your risk-mitigation model?

Profiling Your Patients

Learning more about both existing and prospective patient households should go well beyond a reliance on Census-driven information.  Firms specializing in data compilation (including the major credit bureaus in the U.S.) offer an ever-expanding library containing hundreds of data elements unique to each American household – demographic, financial and behavioral characteristics and attributes. 

Further, segmentation systems serve to provide groupings or cohorts of “like” households, with tens of thousands of mineable psychographic characteristics about each segment.  While two households might share similar demographic characteristics, the behaviors exhibited by those households could mean the difference between their likelihood to visit an Internist when a case of the sniffles pops up versus making an appointment online with an Urgent Care clinic.

Delineating Trade Areas

Once desired patient groupings have been profiled, an important next step is to understand the geographies from which these patients are traveling to utilize your services.  Avoid using outdated means of defining these trade areas – radial rings, zip codes and/or other political boundaries are not an accurate measure of a patient’s convenience factor.  Drive-time definitions are vital when assessing how far someone is willing to travel to visit a physician or location within your network.

Drive times will vary based on the facility type and/or service provided.  Just as IKEA or Bass Pro Shops tend to see sizeable drive-times for their stores, so too will sub-specialists (and the services they provide) that are not as commonplace as the neighborhood Minute Clinic or family practitioner.  Remember too that the residential makeup of a market only tells part of the story – daytime population must be accounted for when measuring convenience and proximity to a population of potential patients. 

Incorporating Variables of Importance

How are you quantifying competitive impacts?  What potential co-tenants are important to consider locating near?  How are you accounting for the quality of a roadway (or the traffic counts on that thoroughfare)?  What are payer mix characteristics for a specific area?  While possessing the understanding of what your best patient households look like is important, it is not the only variable to consider.

Once variables have been selected, weighting of these variables must occur.  When quantifying the potential success of placing a Primary Care practice at a given location, the competitive landscape of Family Practitioners and Internists will be factored in.  However, competition should not be responsible for driving 80% of the answer.  A balanced approach to weighting the variable inputs will result in a more logical output less prone to potential skews.

Applying Your Analysis

You have studied your existing patients, defined appropriate trade areas and determined what additional data should factor into your decision-making.  The model that has been constructed can now be used to prioritize markets, evaluate sites and forecast potential.  Data is now guiding your site selection, taking the guesswork out of the equation while allowing you to focus on the most important elements of your business – the quality of care you will provide and the experience that your patients enjoy in your optimally-located facilities. 

Journey Awareness Persona Strategy/Facilities Healthcare