By Gene Koch

Understanding Healthcare Market Share Changes in a Value-Based, Patient-Centered Landscape

Understanding Healthcare Market Share Changes in a Value-Based, Patient-Centered Landscape

The old model of hospital/healthcare market share that focused on high-margin, high-volume procedures (notably inpatient) used to be the best way to evaluate a healthcare facility’s competitive position. However, this model is quickly becoming less relevant as a new healthcare model – largely fueled by the Affordable Care Act – is taking hold. The new model focuses on transforming the healthcare system from an inpatient sick care model to an outpatient model centered around community-based healthcare that values:

  • Quality of care over volume of care.
  • Operational efficiencies to deliver the highest quality care at the best cost.
  • Placing the healthcare consumer/patient at the center of care and delivery.

Before we dive into how these changes affect market share and how data can be leveraged for strategic planning to increase and improve market share, let’s look at some compelling data from the American Hospital Association’s 2015 environmental scan that will continue to impact market share changes:

  • 78 million baby boomers are expected to live longer, and, for many, with chronic conditions that will continue to put pressure on the healthcare system.
  • The percentage of workers with high-deductible plans increased from four percent in 2006 to 20 percent in 2013 – and is projected to continue rising.
  • A decline in the number of uninsured individuals as a result of health care reform will reduce bad debt for healthcare institutions, but out-of-pocket increases for the consumer will likely keep volume weak.
  • Payers are adapting to affordability imperatives by actively excluding some hospitals whose costs are higher and collaborating with those institutions willing and able to accept lower reimbursement rates.
  • The economic feasibility of independent medical practices will continue to evaporate, with an estimated 75 percent of physicians likely to become hospitalists by the end of this decade.
  • Seventy percent of organizations that reported a transition toward value-based contracts by payers also saw an increase in healthcare consumerism, with patients seeking greater price transparency, challenging orders for services and negotiating payments.

Furthermore, we know that a decline in inpatient care – driven by technological advances in medicine, economic considerations and the ACA – is pushing both horizontal consolidation (hospitals merging with other hospitals) and vertical consolidation (hospitals consolidating with other healthcare provider entities) across all U.S. health regions, according to a Journal of the American Medical Association article.

Healthcare Data and Market Share Changes

The most important part of a healthcare organization’s operational strategy is its ability to keep up with the ever-changing healthcare landscape by being aware of all elements that impact its market. This is where data – both internal data and external data such as healthcare claims data – can be of great value. Let’s take a look at three key areas where hospitals typically seek to gain market share and how the right data will support better strategic decisions with the results being increased market share.

Healthcare Data & Patients
Patient loyalty is critical in the new healthcare model. The ability to measure your healthcare consumers’ experiences across their entire healthcare network is more important than measuring solely on a single point of care. Data can show you where consumers are choosing to go for their care by zip code as well, so that changes and trends can be pinpointed for all data points in a data set.

Healthcare Data & Physicians
The new model of healthcare is focused on creating a healthcare system that is integrated and works with its physician partners to meet the needs of patients across the continuum of care. Data can help you monitor, measure and assess the strength of your facility’s physician network, including both primary care doctors (key components of the new accountable healthcare models) and specialists.

Healthcare Data & Payers
External data such as claims data can help you to determine the payer mix among your competitors. It is also possible to determine which healthcare system or hospital is getting the best reimbursement for procedures among payers in the market. In order to obtain this level of detail, you’ll want to ensure that the is robust enough and covers at least 65-85 percent of the market.

Gene Koch serves as INTELLIMED’s Chief Operating Officer and is a member of the INTELLIMED leadership team. In his free time, he loves to play golf, travel for pleasure and mentor students in several MBA business classes.