Skip to main content

Geography Should Inform Your Market Share Strategy

Analysis  |  By Philip Betbeze  
   August 02, 2018

How healthcare organizations approach a community with rapid population growth will differ markedly from the way they approach areas that have matured.

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."

Half the country is growing in population while the other half is contracting, says David Burik, managing director and payer/provider consulting division leader with Navigant. So, market share strategies are different depending on location.

"If you're in Rustville, USA, versus Nashville, for example, in one the tide is ebbing while in the other it's flowing. It's hard to outperform the community you serve," he says. "To grow in a mature place, it's about consolidation and integration; to grow in the other place, it's about getting to the new subdivisions first."

Beyond that, though, health systems should look to cannibalize themselves, says Burik, because if they don't, others quickly will.

"You need to adjust your pricing structure and take a look at your cost structure," he says. "Also, there are hospitals and health systems who think they can match Amazon, but a lot more are trying to figure out how to get referrals from there."

Related: Market Share Still Matters: 3 Ways to Win

A recent example of cannibalization comes from retail medicine. Health systems didn't invent it, but many created partnerships with drugstores such as CVS and Walgreens that have been mutually beneficial, Burik says. Walgreens would have owned and operated its clinics independently, but now it leases or partners with local health systems.

Thanks to this collaboration, Walgreens gets prescriptions while the hospital gets a new low-cost access point. He envisions similar partnerships with companies like Amazon, possibly with referrals of some sort, although how they might look and behave in each market is uncertain at best.

Philip Betbeze is the senior leadership editor at HealthLeaders.

Get the latest on healthcare leadership in your inbox.