The Value of Locating Your Practice Within the Right Community
1. The Value of Locating Your Practice Within the Right Community The Business Side of Medicine 2011 Daniel James Scott, MS, MBA Sustainable Entrepreneurship & Innovation Alliance USF St. Petersburg – College of Business
13. Not everyone will buy my brand of healthcare. (part market, part competition)
14. No location can fix a poor offering. marketing . advertising . Nothing can fix a poor offering. ----- ------------------------------ ---------- ------------- ---------------
31. The Value of Locating Your Practice Within the Right Community The Business Side of Medicine 2011 Daniel James Scott, MS, MBA Sustainable Entrepreneurship & Innovation Alliance USF St. Petersburg – College of Business
Editor's Notes
THIS IS A MARKETING DISCUSSION!That being said… what is the #1 factor when considering a location?
Trick question!We, as humans, have an innate ability to accomplish what we set our minds to…And this will even happen naturally, unless we correct.Story about me!
Practice: What can you be world-class at?Market: Who do you care deeply about?Money: What drives your economic engine?Goal: To make specific, explicit, measureable decisions.
Goals to Value: Shows how these goals fabricate themselves in community value.KEY = EQUITY! (Your job is ownership!)So… the #1 factor when choosing a location should be…
What is community?
Fabricated in people, place, ties, interactionCommunity is built on shared experience, creating trusting relationships
If this is the perceived industry promise…
…this would be the default customer need.However, this is really only part of the story.
This process could be construed as good or bad, depending on my vantage point, but not the point.Important to note that this all happened in just under one week (except for the continuing allergy shots).Which addresses a key issue…
Do you want to play a game? Because this is the only rule.Healthy is subjective… healthy could be feeling better, or informed, or simply comfortable.Now is convenience of location, but also scheduling, lobby wait times, in-room wait times, etc.Either way, this is the agreement that your patients sign on to… how often do you fulfill your part?I know, “I’m exempt because I’m a specialist” – not at all, just a broader geographic region to cover (in theory)No excuse for a bad location (especially a second location)
Coming back to community…It is only “quality” when someone else provides it (think about it).Average 0.93% Advertising BudgetDon’t look at it this way……Look at it as $15,000 per firm (selling quality)Non-hospital advertising expenditures: ~$4.5B US, ~$250MM FL(the answer is your version of “health, now”)
“needs” – now?“uses” – if that were true…“buys” – well, almost everyone who uses buys… yet…May I suggest…
Nobody’s market is everyone.My brand… my value = my version of “health, now”
None are completely true.Again… my value = my version of “health, now”Now on to “for whom”...
Regarding location.
Everybody requires healthcare.Just like everyone drinks water.There is a global shortage of both.Except “global” does not equal “everywhere.”
Can anyone spot the doctor shortage?Thereis obviously a real problem in Tanzania. The book Med Inc.: How Consolidation Is Shaping Tomorrow's Healthcare System claims “America has twice as may physicians as it needs.”AndDr. Elliott Fisher, with the Center of Evaluative Clinical Sciences at Dartmouth Medical School, has been quoted as saying “If we sent 30% of the doctors in this country to Africa, we might raise the level of health on both continents.”However, some of the entrepreneurial among you will not see a global problem, you’ll see pockets of opportunity on this map.Others of you, the crazy ones who like things like clean, running water, are wondering about pockets of opportunity here in the states. Fair enough.Either way, we need focus.
My apologies to just switching to primary care for a second, it is just to make a point.But even this is not the whole story, is it?
http://www.statehealthfacts.org, http://www.census.govThe industry experts at IBISWorld points out that “the number of primary care physicians has been growing at a faster rate than the US population.”As a matter of fact, even Bill Yates on KevinMD.com admits, “The recent trend in physician supply in the U.S. shows significant growth over the general population rate.”Add in competitive pressures from other sources, you have plenty of healthcare… but just not everywhere.I know, some of you are rolling your eyes, but consider “When you look at other nations with comprehensive policies with regard to universal access to health, the ratio of generalists to (sub)specialists is about 50/50. But the U.S. physician profile is only 31% primary care and 69% (sub)specialty care.” (Russell Robertson, M.D., Chair of the Council on Graduate Medical Education & Lori Heim, M.D., President of the American Academy of Family Physicians)Yes, reform could change this by increasing demand, but that just creates more pie for everyone, especially in underserved areas.
“Nationwide, individuals living in smaller market areas have fewer physicians per 100,000 than those living in more populated markets.”IBISWorld
Physician offices are the second largest retail contingent in the US.Some of you may be saying “how dare he call healthcare retail.”Well, it is… look it up.“Retailing consists of the sale of goods or merchandise from a very fixed location for direct consumption by the purchaser.”
This quick analysis is called “fair share of market”… it is alsocalled “stacking the deck.”Formula? Market/CompetitionAllows us to determine if we need to eat someone else’s slice of the pie, of if there is enough to cut our own slice.
The most important offering of a medical practice is CONVENIENCEConsider IBISWorld’s assessment: “Healthcare practices who thrive and prosper will be noteworthy for their heightened focus on competitive marketplace positioning and for superior cost containment.”What’s the best way to get clients?Referrals only “go so far”, humans are convenience-driven (community engagement is driven by trust)
This data can help us pinpoint locations (up to 5, but keep it a small number) so we can run our “fair share of market” formula
Data is not a guaranteeExisting location? Even more dataFair Share = Market / Competition
Regarding location.Day-care story.
You will spend 8 to 10x more on your employees than your location.Consider the scale here….Plus, it is arguably easier to turn over your employees than your location.
This is investing in your business, not trying to save a few bucks.There is no need to underinvest… that is the fastest way to sink your practice.
Regarding location.
Thanks to Wayne Brass, Nancy Howe, Mario Iezzoni, Bill Jackson, Jim Parrish, Frances M. Rankin, Alejandro Rodriguez, Eileen Rodriguez, Nathan Schwagler, & Sandra Scott.
