Rethinking Physician Network Development

By: David F. Zirkle, PhD

Medical staff planning has traditionally focused on the number of physicians required to serve the healthcare needs of a defined population or geographic region.  For example, physician-to-population ratios, such as GMENAC, were designed to estimate how many physicians are needed to support a given population.  However, as healthcare continues to consolidate and interest in population health management increases, attention to the geographical placement and location of physicians is also gaining traction as organizations plan for the future.

This article discusses four refinements that can provide a better indication of the true physician need in a geographic area and support decisions about network development.

Geographic Refinement:  Often when supply-and-demand studies cover large geographic regions, such as primary and secondary service areas, no need for additional physicians is detected from the analysis.  However, if the service area is divided into smaller geographic units, then physician surpluses or shortages may begin to appear in some of the sub-markets.  These findings clearly impact medical staff planning and decisions regarding where to place physicians within the larger service area.

One common approach to defining sub-markets, particularly for large-service areas with multiple hospitals, is based on patient origin analysis (i.e. where patients tend to go for healthcare).  When data is available, zip codes with similar patient origin patterns can be aggregated to form distinct sub-market regions.

Market Size:  As discussed, population size is the key driver impacting physician need within a geographic region.  However, we know that healthcare utilization can vary widely across regions due to a number of local factors.  One adjustment is to use secondary data sources to identify unique local characteristics that might influence utilization or the need for additional clinical services.

For example, if the prevalence and/or incidence of cardiac disease is much higher in some areas compared to others, the high-utilization regions could be prime targets when considering where to place physicians.  Similar adjustments can be made for other conditions that impact demand for particular specialties (i.e. diabetes, cancer, hypertension, etc.).

Consumer Input:  Consumer perceptions of the local healthcare market, including access to care, utilization patterns and overall opinions of providers within the region, can affect where patients decide to seek care.  We have developed a consumer research model that incorporates a number of factors that can support physician location and placement decisions.  These include:

• Explore perceptions regarding unmet community needs, including access barriers such as closed practices, lengthy appointment wait times, insurance restrictions, etc.
• Quantify past usage of healthcare services, including overall perceptions, satisfaction and likelihood of future use.
• Identify services consumers are likely to seek outside of the community and reasons for outmigration.
• Quantify consumer interest and receptivity to new healthcare services in the marketplace.

Market Potential:  This includes a number of factors that are used to rank and prioritize geographic markets based on growth potential.  A variety of data sources can be incorporated into the assessment e.g. demographics, competition, market size and trends, payor mix, physician supply, survey input, etc.

An example of the approach is illustrated below.  Each factor is assigned to a category based on the available data sources (i.e. high, medium, low; good, fair, poor, etc.).  Then each region and service is quantified by assigning the categories to an interval scale (1, 2, 3…) and summed to provide an overall market potential score.  Different weightings can be applied to the individual factors based on the relative importance of each in determining market potential.  Finally, markets and services with high growth potential can be targeted for expansion and potential location sites for additional physicians.

If you would like to know more about our approach to medical staff development planning send us an email at info@barlowmccarthy.com.