The U.S. healthcare industry is experiencing profound shifts away from the traditional system. As costs escalate, patients are carrying a higher cost burden, employers are looking for ways to reduce the cost of insuring their employees, while providers and payers are grappling with how to best transition from fee-for-service to population health in an attempt to bend the overall cost curve.
These stakeholders are being equipped with more sophisticated data to better inform their decisions including a drive towards quality metrics, price transparency, and patient-centric / consumer driven care. As millions of Americans are paying for more of their own healthcare, yesterday’s patient is being transformed into today’s savvy healthcare consumer. With increasing pressure on providers and with their drive to become more patient-centric, the industry will increasingly value being in front of the right population mix.
Healthcare consumers are now beginning to seek quality, convenience and affordability in services that meet their family’s specific expectations. This makes sense—they’re spending more of their own money for medical care, so they’re beginning to adopt more of a shopper mentality when they purchase or receive healthcare services.
The Health Management Academy (HMA) recently reported that both price and location are major factors as “consumers recognize differences in provider cost and quality and are seeing an average increase in out-of-pocket spending that far outpaces inflation.”
It’s more important than ever that healthcare providers reimagine commercial real estate strategies to cater to a new, consumer-centric process. To best serve consumers, modern healthcare providers should be thinking like savvy retailers.
Healthcare Providers Start Thinking Like Retailers
Healthcare systems that wish to remain competitive must change the way they think about how their systems work and what they’re selling. They should look at new approaches to engaging their patients and offer greater transparency in quality of care and price.
As a result, many healthcare systems have begun thinking like sophisticated retailers strategizing for a bricks-and-mortar channel. They’re thinking about supply and demand, competition and revenue generation.
JLL commercial real estate professionals work side-by-side with healthcare providers across the nation, from large hospital systems to independent physician practices, to develop and implement location strategies for new, informed approaches to care delivery.
Now more than ever, it’s crucial to understand your market’s demographics and psychographic makeup so you can pinpoint and predict the right expansion markets, location profitability, modes of consumption, competition and changing trends.
In a recent poll, HMA asked patients about their definition of quality in healthcare. Out of several choices, people with children under 18 in their household chose “timely and efficient care” as the top factor—signaling location as vital a factor in their choice of providers.
That’s why savvy healthcare systems are opening outpatient sites in geographically convenient locations, while working to implement technologies that enhance physician-patient communication.
Beyond location, healthcare experts are also building new models that better engage patients through less traditional means, such as annual wellness visits, employer-sponsored wellness programs, smoking cessation programs, exercise and nutrition education, and more.
How to Develop an Intelligent Location Strategy
To develop a consumer-centric strategy, healthcare system decision-makers should consider several important factors.
First, because your delivery model drives your retail strategy, it’s important to look at the tactical pieces of your system in terms of your acuity goal. Think about your ambulatory network. Do you need many smaller urgent care facilities or would fewer standalone ERs throughout the market serve your patient base? Maybe you require one acute-care hospital, with the ability to leverage entities that can drive business to you.
It’s also important to define who you are as a “store,” as in, what service lines or medical modalities can drive the revenue your system is seeking? Once defined, you can determine strategically and tactically how to engage consumers through physical assets, technology and other brand differentiators.
Use Metrics Like a Retailer
To shape your health system’s strategy, you don’t have to guess at the all-important metrics. All the tools and analytics your team needs to understand existing markets, consumer profiles, partnership needs and real estate distribution are available. (Plus, a CRE professional can help guide more informed decision-making along the way.) Below are a few helpful tools to get started:
- Digital maps/locations tools to select metrics, filter data and access street views
- Patient and community profiles to aid in targeting the right populations and locations
- Analysis of current facility operations to uncover key determinants in building a predictive model for future locations
- Facilities maintenance systems that offer move and space management, modules for scenario and business unit programming, and asset management modules
- Facilities management systems that offer user-configurable dashboards with real-time web and mobile accessible reporting to promote informed decision-making about space utilization and capacity by site
- Portfolio analytics tools that view key analytics, number of locations, rental obligations, occupancy and mapping
Using such metrics empowers healthcare systems to target and tailor a retail strategy that enables use of all your system’s assets to reach and serve any segment you identify, and to deliver the services your patients want and need most.
Find out more about how thinking like a retailer can positively impact your healthcare delivery strategy by downloading JLL’s report, Healthcare Is the New Retail™: How to Think Through Your Consumer Strategy with a Retail Approach.
Paul is a Senior Vice President focused on helping leaders within hospitals and independent physician practices develop and implement strategies to achieve positive outcomes for their real estate. View Paul’s full bio to read up on his experience, or connect with him on LinkedIn.