Market Expansion: Hospitals Reaching for "Well-Insured" Patients

As hospitals focus on the newest technologies, niche specialty services and attractive amenities to draw in physicians and patients, they are also expanding into targeted, geographic markets with "well-insured" people, according to a study from the Center for Studying Health System Change.

The study, which looked at 12 metropolitan communities in 2010, specifically found that several hospital systems are targeting affluent geographic areas beyond their markets because that is where the growing, well-insured populations are.

In all 12 markets studies, hospitals pursued the following types of geographic expansions: buying/building full-service hospitals or freestanding emergency departments, buying physician practices and establishing emergency medical transport systems. These expansion strategies were expected to boost referral bases and capture more commercially-insured inpatient admissions.

"Whether these new hospital competitive strategies will raise costs, improve care or both is hotly debated — payors and competitors contend such strategies will lead to higher costs, while hospitals assert the expansions will increase efficiency, increase access and improve the quality of patient care," said Emily Carrier, MD, HSC senior researcher and coauthor of the study.

More Articles on Hospital Strategic Planning:

Required Capital Ratio Part 2: How Finances Are Affecting the Boston Merger Market

Rideout Memorial Hospital in California Breaks Ground on $225M Expansion

Pursuing Hospital Mastery: Q&A With Experienced Hospital CEO Mark Dixon

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