As the concept of healthcare systems evolved in the U.S., a distinct business model emerged. Often called the “hub and spoke” approach, this business model focused on using outpatient clinics to drive patients to hospital facilities. Outpatient clinics were the gateway to more complex – and profitable – care.
But two forces are reshaping healthcare systems and leading to a new kind of hub and spoke model.
Force #1: The Push Towards Population Health Initiatives
Under new payment models, healthcare providers are being paid to keep people well, rather than merely treating illness. The implications for health systems are clear. To focus on wellness, you need to:
- See patients regularly (be part of their lives and routines)
- Focus on low cost, preventative measures rather than costly treatments for illness
Force #2: The Rise of a Consumer Mentality Among Patients
Much has been written about the “retailization” of healthcare, which is driven by a new consumer mentality among patients. Today’s patients want to have options. They want to be treated on their schedule. They want to be able to access healthcare in convenient locations, rather than traveling across town to a hospital campus.
A New Hub and Spoke Model
These two forces are leading to a new hub and spoke model for healthcare systems. In this new business model, ambulatory care and outpatient clinics are more important than ever before as they become the primary delivery vehicle for care. Hospitals still deliver complex care as needed, but the goal is to reduce the need for these services through better prevention and follow-up care delivered in an outpatient setting.
The implication for healthcare strategists and facility planners is clear. Rather than prioritizing large, expensive hospital facilities, healthcare systems need to invest in multiple smaller facilities.
Placing these clinics appropriately is the key to success in this new business model. Remember, the goal is convenience and being top of mind as a source of preventative care. Your facilities should be in locations that are easy for current and potential patients to access. Your facilities should also offer the service mix that best aligns with the healthcare needs of the trade area.
This may seem like a daunting task, but it is possible. Selecting the right locations and service line mix requires insights into market variables such as the following:
- The healthcare needs (demand) of the local population
- Demographic and lifestyle traits (psychographics) of consumers
- Locations of existing healthcare providers in a (supply)
- Likely insurance payer mix of consumers in the trade area
Does your healthcare system have the market insights it needs to shift your strategy to the new hub and spoke business model? If not, explore our healthcare analytics services to learn how Buxton can help.
