cf_Chapter_4.pptx
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Chapter 4
The Nature of Healthcare Markets
Health Administration Press
Chapter 4 objectives
Introduce the concept of “market” as it relates to healthcare
Review methods of delineating markets
Describe the market profiling process
Describe shifts in levels of marketing
Introduce the notion of “effective” market
Describe the changing nature of healthcare markets
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
The concept of “market”
“Market” means different things to different organizations
Usually means the geographic area served by a healthcare organization
For-profits typically serve a “market area”
Not-for-profits typically serve a “service area”
Health Administration Press
Methods of delineating markets
Based on geography
Based on population segments
Based on consumer demand
Based on opportunities
Markets without walls
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Criteria for market delineation
Distribution of patients
Driving time/distance
Anticipated demand
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Geography as destiny (exhibit 4.2)
Interaction between geography and health status and health behavior
Role of geography in determining health status
Health status as a “product” of the community (and not vice versa)
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Geographic units
Political/administrative units
Statistical units
Functional units
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Geographic units (continued)
Political/administrative units
Nation
State
County
City
Congressional district
State legislative district
School district
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Geographic units (continued)
Statistical units
Region
Metropolitan statistical area
Census tract
Census block group
Census block
Zip code tabulation area
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Geographic units (continued)
Functional units
Zip codes
Areas of dominant influence
Natural regions
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Methods of delineating markets (continued)
Existing patient distribution
Prospective markets
Nongeographic boundaries
Proxy data
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
The market profiling process
Market size
Market composition
Health status
Health services demand
Availability of resources
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Shifts in levels of marketing
Mass marketing
Target marketing
Micromarketing
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Shifts in levels of marketing (continued)
Mass marketing
Emphasizes organization rather than specific services
Promotes all things to all audiences
Broad-based promotional techniques
Decreasing effectiveness in current healthcare environment
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Shifts in levels of marketing (continued)
Target marketing
Aimed at selected segments of the total market
Typically emphasizes specific services rather than overall organization
Customizes approach depending on the target
Increasingly used in healthcare
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Shifts in levels of marketing (continued)
Micromarketing
Targeted to the level of the individual or household
Involves highly customized promotions
Emphasizes specific promotions to a very select audience
Limited usefulness in healthcare
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Health Administration Press
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
Delineating the “effective” market
Perceived need/demand
Consumer acceptance
Payer mix
Competition
Health Administration Press
Copyright 2020 Foundation of the American College of Healthcare Executives. Not for sale.
The changing nature of healthcare markets
Increasing instability and unpredictability
Demographic trends
Changing consumer attitudes/preferences
Evolving competitive situation
Health Administration Press
