Background
Our client was an independent, 250+ bed hospital, located 20 minutes from a large metropolitan area in the Midwest. The hospital was experiencing intense pressure from three tertiary competitors located in the nearby metro area. Each was pursuing an ambulatory strategy that placed physicians, outpatient services, and ancillaries in our client’s primary service area. These actions were stressing our client financially, as the new competition drew a disproportionate share of commercially-insured patients out of the market.
Solution
HSG facilitated a strategic planning process that examined the client’s entire service area, zip code by zip code, to determine the impact by service line by zip to the client’s market share. The market share study was then overlaid with physician supply data, as well as ancillary services locations. Finally, referral management within the organization (as data allowed) was reviewed to look at referral patterns and the ability of the client to keep referrals in-network.
From this analysis, an ambulatory plan was developed that focused on the following strategies:
- Recruitment into and expansion of the hospital’s employed primary care supply
- Reorganization and expansion of the employed physician group’s management infrastructure to support a broader ambulatory strategy
- Definition of a “moat” strategy for location of primary care offices and outpatient centers around the client’s service area to stem outmigration
- Direct engagement of employers/location of physician resources on-site with employers, to preemptively access the commercial market
Results
The client is implementing the ambulatory services strategic plan over a three-year timeframe. New primary care recruits have been added to the physician group, and the management infrastructure reorganization is complete. Real estate strategy for the location of future ambulatory sites is underway.