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Strategic Countdown: Recognizing the New Reality in Ambulatory Strategy

Leading health systems now derive a majority of their enterprise revenue from ambulatory care. This new reality demands a rigorous, systematic approach to develop an optimal ambulatory strategy. The traditional, piecemeal approach will not suffice going forward. Today’s strategy needs to connect ambulatory sites across the System of CARE and dovetail overarching organizational goals.

Effective ambulatory planning requires a thorough understanding of geographic service areas and market characteristics; analysis of robust ambulatory data; and a synthesis of key insights into actionable strategies. Sg2 recommends the following 7 steps (and related Sg2 Analytics for implementation) to customize an effective path forward.

1. Confirm ambulatory geographic service areas. Gaining accurate insight into your health system’s true ambulatory footprint and volumes has become increasingly important, and inpatient data and catchment areas no longer suffice. Health systems with access to claims data can drill down to understand patient origin and volumes at both their and their competitors’ sites.
Key Sg2 Analytic: Ambulatory Market Strategist

2. Document service area demographics. Key variables to consider include current population, the projected 5-year population growth rate, median household income and average per capita expenditures on health care.
Key Sg2 Analytic: Market Demographics

3. Inventory and map organization and competitor assets. Develop a comprehensive perspective on your assets and those of your key competitors. Tap into your own insights to approximate the landscape and then supplement and validate this perspective with actual ambulatory data. After your initial assessment, mine the most comprehensive, highest-quality data available to determine where patients in your market are seeking care.
Key Sg2 Analytic: Ambulatory Market Strategist

4. Determine ambulatory volumes by zip and service line. Drilling down into volumes by service line and zip code will help you identify clinical areas of opportunity across the service area and potential areas of vulnerability.
Key Sg2 Analytic: Ambulatory Market Strategist

5. Compare service line market share and demand with market opportunity. Use a combination of ambulatory data, market forecasts and internal benchmarking to document current market share, project 5-year growth and estimate available revenue opportunity. This can help you understand the relative size and value of opportunities and avoid mismatched investment of resources.
Key Sg2 Analytic: Impact of Change®

6. Synthesize data and key insights to rank markets. Once the detailed assessment and competitor analyses are complete, the next step is to distill key insights into market rankings. Rank factors such as current and future demand, demographics, financials and qualitative feedback from stakeholder surveys. Then average individual factor scores to come up with an overall market attractiveness ranking (from 0 to 5) by zip code or service area.
Key Sg2 Analytics: Ambulatory Market Strategist, Impact of Change, Market Demographics, Lifestyle Segmentation, Workforce Supply and Demand, Insurance Coverage Estimates

7. Use market rankings to inform strategic priorities. For markets with higher rankings, consider strategic options such as building on strength to optimize sites or services, establishing a new presence or expanding reach within these markets. Lower-ranked markets can be monitored for change or explored later after higher-priority initiatives are more mature.

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As of February 11, 2016, Vizient, Inc. has completed its purchase of MedAssets Sg2 and spend and clinical resource management segments from Pamplona Capital Management, LLC. MedAssets revenue cycle business will continue to operate as a wholly-owned subsidiary of Pamplona Capital Management LLP.

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