Convenient Care on Every Corner. How will Hospitals Compete?

December 16, 2014
iVantage Health

By Kyle Skiera, Product Manager, Strategy & Planning Solutions, iVantage Health Analytics

When I joined iVantage a few years ago, discussions with strategic planners about market share always focused on other hospitals. But today, that conversation is more complex. Urgent care clinics and “doc in the box” facilities are sprouting up in strip malls and inside retail pharmacies nationwide. And as a result, hospital planners are having to re-think their competitive landscape.

This wave of clinics are geared to deliver primary and/or urgent care at a lower cost than hospital emergency rooms and are also carefully planned to reap the benefits at their own pharmacy and retail sales counters. Savvy retail market planners are hard at work to make these clinics a success.

The folks at Walmart, for example, are targeting South Carolina, Georgia and Texas for their first primary care clinics – markets where there are high rates of chronic conditions and a deficiency in providers to treat them.

In response, we’ve seen a number of health plans and hospitals jump on the bandwagon by buying up or affiliating with urgent care providers. The insurance giant Humana paid nearly $800 million in 2010 to buy Concentra, the nation’s largest group of urgent care centers, with about 300 currently. Dignity Health, a San Francisco-based health system, acquired U.S. HealthWorks, a group that has 176 centers.

But that’s just a drop in the bucket when you consider CVS has more than 7,600 stores nationwide. And let’s not forget that Walmart is the largest retailer on the planet. Check out the image below to see how congested things are in Jacksonville, Florida.

Know your market and prepare

For hospitals, fending off these new competitors will take some critical actions:

  • Measure your performance and quality with meaningful analysis – Don’t rely on PR-driven report cards to understand where your strengths and weaknesses lie. Find analytics that inform and drive real improvement and differentiation.
  • Conduct a market assessment – With the potential for the number of competitors to grow from 2 or 3 to half a dozen or more pretty quickly, you need to know everything there is about your market – population demographics, lifestyle segmentation, utilization patterns and financial trends.
  • Cater to the needs of your patient population – Efficient, personalized patient experiences are likely to win the day. Retail-based clinics and urgent care centers will struggle to match the expertise and continuity of care many hospitals can offer. But these competitors are consumer savvy – and hospitals have to adopt the notion of building customer loyalty.

Jacksonville

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