Market assessment and forecasting, what does this tell me, and how do I use the data?
The healthcare industry is filled with uncertainty and opportunity, and strategic trends are to be assessed and used in financial forecasting. With growth remaining strong for the next decade, businesses that position and market themselves effectively will benefit. Providers that lack a current marketing plan may find themselves struggling to obtain desirable customers. A current, effective market assessment and forecasting plan are essential if your business intends to improve opportunities while decreasing risks.
The pace of change impacting providers is rapid. But a market assessment and forecasting data can help your team understand how these changes will directly affect business strategies. Key drivers of change prompted at the federal and state government levels, from consumers and insurance providers, have been identified as including (1) costs of care, (2) access to care, (3) quality of care, and (4) improvements in technology.
Costs of care
- Value-based care: Healthcare costs are rising faster than the nation’s Gross Domestic Product growth. The market is responding in ways that will impact consumer choice and spending patterns. Value-based care payment models are forcing providers to assume higher financial risks over longer periods of time. Providers are more responsible for their patient populations’ long-term health outcomes. Customer relations are shifting away from single episodes of care. Managing long-term positive relations will be key.
- Population health: Providing high-quality care in the lowest-cost care setting is a trend that will continue. Providers must develop the networks and skills needed to address social issues affecting care. By reducing the costs of caring for the sickest, most costly patients, providers can lower financial risks.
- Customer preference: Out-of-pocket cost burdens are rising for most Americans. Deductible payments and co-pay costs are increasing at rates above inflation. These shifts are creating demands from customers for cost and quality information. Customers are using this information to “shop” for the highest quality care available to them at the lowest cost.
Access to care
- Telemedicine/virtual care: Telemedicine and virtual care services have increased in number due to the pandemic. The U.S. Department of Health and Human Services notes that interest in telehealth and virtual visits from both providers and customers is likely to remain high. Consequently, an estimated 21% of patient interactions will be virtual following the pandemic.
- Community-based/pharmacy-based clinics: Social determinants of health focus on health improvement opportunities in environments where consumers live, work and interact regularly. This will then lead to further investment in local community clinics and pharmacy-integrated clinics.
- Quality measures: Commercial insurance plans and the CMS continue to develop new measures for quality comparison purposes. As a result, these measures will continue to increase in visibility and transparency.
- Wellness over sick care: Quality data is used by insurance companies and customers when choosing partnerships with service providers. This is a trend that is here to stay for the foreseeable future. With quality measures growing in number and scope, incentives to bolster services addressing the various social aspects of care in the customers’ local community also increase. Businesses must be able to prevent negative health outcomes over longer periods of time. Healthcare providers need to move towards models that focus on wellness promotion over sick care.
Improvements in technology
- Data management: Expansions in data analytics options and artificial intelligence continue. Growth in cloud-computing programs and health data integration programs are driving new trends in data management and associated costs. Managing data security risks is more challenging as data sharing increases.
- Personalized, digital medicine: Health technology can now be found in wearable consumer devices and implanted medical devices. Genetic testing is leading to more personalized medical management.
Benefits of market assessment and forecasting data
A recurring theme in healthcare forecasting involves consumer-driven choice. Informed consumers are driving the marketplace. Collecting market and forecasting data is essential for your healthcare business.
- Improving your understanding of patients/customers/potential customers.
- Managing the message/improving the reputation of your business.
- Establishing an edge over competitors.
- Gaining the ability to adjust services according to customer needs and desires.
Market assessment and forecasting analysis tips
A healthcare organization benefits from market assessment and forecasting data if properly analyzed. Tips for conducting an analysis are as follows:
- Secure relevant customer stats like wealth, age range, target population size, family support structure, and needs.
- Understand the service demand of your target population. How many need your services at a given moment in time? How will this change?
- Keep the economy in mind. How will economic projections affect your customer base?
- Monitor customer location. Where do your customers live, work and play? How will you market to them?
- Know the saturation level. What is the saturation level for similar services for your target population group? How will this change?
- Review service costs. How much does your target population pay for similar services?
- Identify your true competitors. What services do they offer? What is their pricing structure? How is their reputation? How does your organization distinguish itself from theirs?
Healthcare spending worldwide is estimated to reach $10 trillion by 2022. In the U.S. market, the Centers for Medicare and Medicaid Services (CMS) expects a 5.7% yearly increase in national healthcare spending for the years 2020 through 2027.
Private insurance spending is expected to increase at a rate of 5.1% each year during the same time period. Out-of-pocket healthcare spending is expected to increase 5% each year for the years 2020 through 2027 too. Spending on hospital care, medications, and physician services will also increase by 5-6% yearly through 2027.
Market Assessment and Forecasting – what does this tell me?
Healthcare businesses need to manage an increasingly complex number of changes in the healthcare marketplace. Gathering high-quality market assessment and forecasting data, analyzing it properly, and applying it all to your business can be a challenge. However, such assessments are not only critical to future service planning and success but also positions your business for long-term health.