Healthcare CEOs Using New Proxies for Market Share

The metrics healthcare executives use to track their organizations' market share are shifting.

This article appears in the July/August 2018 edition of HealthLeaders magazine. It is a sidebar to the article "Market Share Still Matters: 3 Ways to Win."

Inpatient share is relatively easy to measure, but with more services moving outside the hospital, it's a less reliable indicator of market share.

Here are some of the new measures CEOs are using to help illustrate the health of their organization:

• Patient access: This is measured in part by ambulatory services growth, physician practices, and other service locations such as laboratory and sports medicine.
   
• Physician claims data: Outpatient surgery volume and growth as well as traditional office visits are important, but so is engagement through other means, such as telemedicine.
   
• Regional presence and narrow network necessity: Health systems are busy trying to build a cohesive network of services to make them a must-have for insurers' narrow networks. That means an array of services conveniently located to the large majority of insurers' patients.

Physician recruitment has always been one of the biggest strategies to move market share, says Keith Alexander, the former systemwide senior vice president and regional president at Houston's Memorial Hermann Health System, who is now an independent consultant.

While at Memorial Hermann, Alexander managed both the ambulatory division and four hospitals at the health system and used a variety of tools to measure market share, but outside of the inpatient arena, getting reliable data is a huge challenge, he says. And the proxies that used to be good measures of market share, like discharges, are now less valuable tools.

"There are a number of proxies, and some companies try to aggregate physician claims data and ER visits to get an idea of market share," he says. "But all the stuff that's moving outpatient is a challenge."

Related: Market Share Still Matters: 3 Ways to Win

Sports medicine, outpatient surgery, urgent care, and laboratory services remain great opportunities to grow market share, but health systems must become more sophisticated in measuring their impact on the ecosystem. Disruptors, Alexander says, are companies that can bring all those modalities, along with health and wellness, together.

"Look at what Optum, CVS, Aetna, Humana, and now Apple and Amazon are doing," he says. "We're talking billions of dollars of investments, and none of them are buying hospital beds. They're buying physician practices, urgent care, surgery centers, and they're building digital health."

Smart health systems should be imitating these steps to create virtual integrated delivery systems centered around convenience, access, price transparency, efficiency, quick throughput, and easy online scheduling.