Better Market Research Leads to Better Hospital Growth Decision-Making

As we sat in his office with the door closed, the CEO grimaced at the choice he needed to make on behalf of his entire organization. They had gradually and quietly acquired the land parcels necessary for this expansion for years, and yet, they were no further along in the gathering of intelligence that would help them make sound choices about the type and size facilities they needed to maximize their long-term investment.

As the lines of worry deepened on his brow, I suggested that the source of his data might well be found within the hospital’s core constituencies. Our decision-making might be able to be postponed just a short time so that more substantive measures of the future of his organization’s growth could help determine the scope of their entire investment. The weight had begun to lift from his shoulders. Our new business relationship was off to an auspicious, potentially course-correcting start.

Predicting the future hospital campus is vexing the minds of healthcare system c-deck decision-makers these days, especially in light of escalating costs and competition for the right mix of increasingly scarce specialists to provide sought-after procedures. But the data many decision-makers use to make these decisions for their respective long-range planning falls short of a well-articulated strategy to accommodate market trends and the future of medicine.

For years, these decision-makers have relied on a simple principle: build where rooftop numbers are expanding. Then they use demographics to fortify a deeper understanding of the community makeup found under these rooftops. Most executives still believe that this understanding is enough. Some take an extra step to ask doctors if they’d make a move to their facility if the circumstances were right.

Yet, many in the c-deck continue to be perplexed by the kinds of expansion which will meet their future revenue cycles. Examples of different kinds of expansion abound in urban settings. These greatly varying visions are supported by gut intuition and past experience as determinants of growth, without regard for any market analysis. Clearly, these aren’t enough. Instances where shiny new hospital facilities sit nearly vacant are commonplace, while nearby unsightly competitors are flush. Strong competitive forces and sweeping changes to healthcare delivery will dramatically reshape how hospitals are utilized and therefore built. Today’s savvy leaders need better intelligence to fortify and buttress decisions about their growth.

 

What do you believe are better sources of intelligence for C-Suite decision-makers to leverage for better decision-making? Where would they find such intelligence? What weight would they give it, in combination with the rest of what they rely upon (gut and past experience)? I'll provide these and other responses in a few days once we've fielded comments. [This article, originally penned by me in Feb 2008, is reprinted with permission from Az Medical Office, published nationally by Square Foot Magazine.]

----- Michael