In Retail Medicine, Opportunity for Market Share Growth
The Traditional Hospital Model is Evolving
Lynch says MLH's new retail setting is part of the organization's efforts to transition to a new care delivery model where the hospital campus is no longer the central focus.
"We are moving away from the inpatient mindset and hospital hub to being more of a provider of healthcare as opposed to a sick care provider," he adds. "To say we are not interested in feeding our main campus would not be true, but at the same time, we know inpatient volume will be smaller in the future, and more people will be expecting to get their care in an outpatient environment."
MLH invested roughly $4.5 million to renovate the new space. Although the health center may wind up being a loss leader for the organization, it's an important part of MLH's strategy to grow volume in its ambulatory settings, Lynch says.
"I don't know that we've sat down and said that we want the center to make money on its own," he says. "I don't know if that is reasonable because I don't know if we have enough high margin services there. In my opinion it is all about access. If people end up in our primary care network, we believe there is a much better chance that they will use us for other services. It is part of our overall strategy to expand our market share. Once they use us for primary care, we believe we can keep them in the system."
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