Healthcare Data Analytics Vendors: The Difference Between “Having Esri” & Actually Using GIS

Since its inception, Stratasan has been at the forefront of using mapping technology with the many forms of health data we use on a daily basis. Not surprisingly, our competitors have realized that consumers in the healthcare industry value maps as well. Many of the other data vendors in our industry have started using various Esri products since Stratasan arrived on the scene. These companies mention “having Esri” now, but if you look at their offerings and compare them to Stratasan’s you will quickly realize there is a BIG difference between “having Esri” and actually doing Healthcare GIS work using Esri.

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Stratasan’s Demographic Data: [The Many Reasons] Why We Use Esri

One of Stratasan’s most powerful assets is our demographic/psychographic data [Especially now that their Tapestry Segmentation was updated this year and is better than ever!]. Using this data in tandem with our state, federal, and proprietary datasets we create actionable healthcare market intelligence from the block group level to the national level. What you might not know is that this annual demographic/psychographic data comes from Esri, the market leader in both GIS software and data. Most of our customers know that we use Esri for our demographic and psychographic data, but not everyone knows why.

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Introducing: Hospital Market Share Dominance Maps

We are constantly searching for new, effective ways to present intelligence from data. In order to accomplish this, the Stratasan team uses tables, charts, graphs and maps instead of raw data tables alone. Pairing these visual tools with raw data increases the efficacy of our products and adds a necessary element of excitement to the black and white world of data for our customers. The most common requests we fulfill are those around market share. This report specifically benefits from converting the data into visuals. Our goal is to present market share data in a way that clearly displays a hospital’s (and their competitors’) presence in a market. We wanted it to be visually interesting while still providing a useful picture of a market area. So, Stratasan is pleased to introduce the Market Dominance Map.

Market Dominance Map

Map illustrating market share leader by ZIP; color gradient illustrates how strong their market share is within each ZIP.

The Market Dominance Map (above) shows hospital reach by color and the significance of that reach by color saturation. If a hospital has a majority market share in a ZIP code, that ZIP is filled with the hospital’s color according to the map legend. Depending on how high the hospital’s leading market share is, the color is shaded from dark (high market share) to light (lower market share). We refer to this visual representation of reach as “dominance” of a ZIP code.  The percentage number in each ZIP represents the leading hospital’s market share. As you can see in the example above, only the leading hospital per ZIP is represented. This is a quick and clear picture of the market’s major providers and what portions of the market these providers have cornered. “But what about our competition within ZIPs?”

Market Dominance, Highly Contested ZIPs

ZIPs with less than 10% market share separating the two leaders are cross-hatched

To increase the value of this project, including the top competitor is the obvious move. To maintain the clarity of the map, we put a limit on what constitutes “competition.” In each ZIP code, if the dominant hospital has market share less than ten percentage points higher than the next hospital; the second leading hospital’s color will cross-hatch through the ZIP.

Highly Contested ZIPs

Limiting map to only those ZIPs that are “highly contested”, defined as the top two market share leaders being within 10% of each other.

The final view for this project is to give the hospital strategic planning team a view of the ZIP codes in their service area where the market leader is in a “highly contested” market share race with another facility. The percentage listed in each ZIP code is the market share percentage of the second facility. Market share is an undeniable part of hospital strategy. For a clear, concise portrait of dominance in your market, contact us today.

The Art (and Science) of Defining Service Areas – Part 2

This post is a follow-up case study to illustrate the detail outlined in Part 1 found here.

Case Study – Memorial Hospital, Anytown, USA. 

In the last blog post, we covered how to define a service area.  In this post, we will cover a case study demonstrating the pros and cons of different service area definitions focusing on competitor identification.  Below is a case study based on a real hospital and real service areas blinded to protect the innocent.

Anytown is a city of 33,000 located in Mine County population 159,000, 20 miles north of a metropolitan city with population of 752,000.  Below is a table of market share by hospital by the different service area definitions discussed in-depth in the previous blog post.  Eighteen ZIP Codes represent 90 percent patient origin, 7 ZIP Codes represent 75 percent patient origin (all contiguous ZIP Codes meeting Stark service area definition) and 2 ZIP Codes represent 50 percent patient origin.   The 7 ZIP Code area is essentially the primary service area (PSA) and secondary service area (SSA) defined by PSA being 50 percent patient origin (the 2 ZIP Code area referenced above) and the SSA the next 25 percent of patient origin combined.

BlogPostMarketShare

The table above demonstrates how the competitors change based on the definition of service area.  Using the two larger service area definitions, the primary competitor is Neighbor Hospital.  However, when only looking at the two ZIP Codes that make up 50 percent of patient origin, Large Medical Center becomes the primary competitor.  If market share by service line is available, look at outmigration by service line to Large Medical Center.  The only services out-migrating may be tertiary services Memorial Hospital doesn’t provide.  In that case, our focus would shift to Nearby Town Medical Center as our primary competition if they are seeing patients in service lines where we offer the services.  In the 7 ZIP service area, Neighbor Hospital is our primary competitor, followed by Nearby Town Hospital.

Also, notice the how the market share percentages change as the service area changes.  Using the 18 ZIP Code definition, our hospital has a market share of 13.1%.  When using the 7 ZIP Code service area our market share is 27.7%.  Using the 2 ZIP Code definition, our market share is 56.9%.  I am arguing the primary service area of our hospital is the 2 ZIP Code definition.  Those are the people we primarily serve.

This exercise demonstrates the importance of a thoughtful, deliberate service area definition.  A well-defined service area assists with targeted marketing and physician business development.  It also assists in understanding who your true competitors are by service line.  The service area definition is both science and art involving the use of analytics and judgment.

Footnotes

1. http://www.mwe.com/info/news/hlu0404.pdf

The Art (and Science) of Defining Service Areas – Part 1

Part 1 – How to Define a Service Area

The first step in any planning or marketing project for a hospital/provider is to define a service area.  Before demographics or market share can be run, an appropriate service area must be applied.  Defining a service area is both art and science.

There are several ways to define a service area.  Which one is best?  The answer is: it depends.

Regional Strategy Approach

With the regional strategy approach the facility defines a service area as large as possible.  A facility may define its primary service area as 75 percent of its inpatients (and/or outpatients) and its secondary service area as the next 15 percent for a total of 90 percent patient origin.  This is the “no ZIP Code left behind” definition.  This service area definition will most likely incorporate a very large area and ZIP Codes where the hospital has very low market share.

Service Area defined by 75% and 90% of patient origin results in an over-expanded view

 

Two of the key areas where an overly large service areas cause issues are marketing and physician recruitment. Marketing departments with limited budget and staff struggle to make a meaningful impact over such a large geography.  The large area also causes a lack of focus by your physician liaison potentially leading to missed opportunities with great partner physicians close to your facility. However, if a facility is looking at a regional outreach strategy or growing a specialty service line, a larger service area may be appropriate.

Stark-Influenced Definition

The 2004 Stark regulations relative to physician recruitment define a hospital’s geographic service area as the lowest number of contiguous ZIP Codes from which the hospital draws 75 percent of its inpatients.  Some hospitals prefer to define their service area in this manner, essentially killing two birds with one stone – the service area for marketing/planning etc. matches the physician recruitment service area.  However, what is ideal for physician recruiting may not be ideal for service line marketing and development.  If 50 percent of Cardiology patients come from 2 ZIP Codes, but 10 ZIP Codes make up 75 percent of patients in contiguous ZIP codes, cardiology development loses geographic focus.

The Stark defined service area for a hospital is an easy solution, as you should already have these defined. Be careful when using tools out of convenience over selecting the right tool for the job.

Stratasan’s ZIP Code Recommendation

When using ZIP Codes, we prefer a more focused primary service area representing 50 percent patient origin with a secondary service area for the next 25 percent of patients.  If a tertiary service area is warranted, then the next 15 percent of patients is sufficient.  Sounds simple, right?  As football analyst Lee Corso says, “not so fast my friend.”  The percentages are science, now for the art.

Reducing your definition to 50% and 75% tightens your ability to know your patient base

 

When selecting ZIP Codes for a Primary Service Area (PSA) and Secondary Service Area (SSA) as defined above, gather five pieces of information: patient origin by ZIP Code, market share of top 75 percent of patient origin ZIP Codes (if available), population by ZIP Code, and the physical location of the ZIP Code on a map.

Select ZIP Codes for the PSA representing approximately 50% of patient origin (blue area), where the facility has high market share, and that make sense geographically.  Select ZIP Codes for the SSA that represent approximately the next 25 percent of patient origin, where the facility has decent market share, and that make sense geographically.

What does “make sense geographically” mean?  It means eliminating ZIP Codes on an “island” away from the rest of service area or adding “bullet holes” back in to fill in gaps inside the newly defined service area.

Removing the ZIP (37210) in the northeast on an “island” allows for even further tightening of your Service Area

 

An example of this is the removal of ZIP 37210 in the map above. The floating ZIP Code is usually a highly populated ZIP Code in a nearby larger city where your facility receives some patients placing the ZIP code in the top 75% of patient origin.  However, your market share of that ZIP Code may be very low, 2% for example.  You may want to omit this ZIP Code in favor of ZIP Codes closer to the facility where the facility has higher market share.  An example is 65432 above.  It is a very large ZIP Code in a metropolitan area south of our facility.  There are facilities that designate dream ZIP Codes in their service, meaning those they dream of serving.  This is fine as long as you don’t actually include these in your real service area, defined as those people you currently serve.

Moving Away from ZIP Codes

But that is not the end of the story. When patient data is available, a custom polygon shape file built from your patient address level geo-coded data can serve as the best solution for all parties involved.

Building a custom Market Service Area based on your patient data tells the most accurate story

 

The service area above is based on an algorithm between the hospital location and the actual addresses of their current patients. ZIP Codes are built to deliver mail. They have no real influence on where a patient decides to receive healthcare services (when they have a choice).

Large populations are included in your service area by using standard geographic boundaries like ZIP Codes

 

Overlaying this new approach with the tighter ZIP Code approach helps you visualize the difference.

Tighter Area + Market Share + Population

Using a tighter service area is a great first step into improving your service area definitions. But many times this is not the end of your journey. Adding a quick study of market share and population by ZIP Code keeps a facility from “majoring in the minors.” What we mean by this is focusing too many efforts on the wrong ZIP Codes.

 

For example, our fictitious Brentwood Medical Center facility gets a mere 3.8% market share of ZIP Code 67891.  The other ZIP Codes in the primary service area warrant more attention because we already have better traction but have opportunity to grow.  One could even argue that if a facility only gets 4% of a market, then it’s NOT your service area.  You may WANT it to be your service area, but it isn’t.  In ZIP 87654, our facility gets 27% market share.  However, there are only 2,400 people in the ZIP Code.  I would recommend focusing on another ZIP Code with more population first.  In fact, I am arguing for focusing on two ZIP Codes highlighted in yellow first, then the remaining list in the PSA, other than 67891.

Arriving at Your Destination Definition

Based on all five pieces information, selecting your primary and secondary service areas (whether ZIP Code-based or Market Service Area) is much more precise.

Select ZIP Codes for the PSA that represent approximately 50% of patient origin, where the facility has high market share, and that make sense geographically.  Select ZIP Codes for the SSA that represent approximately the next 25 percent of patient origin, where the facility has decent market share, and that make sense geographically.

What does “make sense geographically” mean?  It means eliminating ZIP Codes on an “island” away from the rest of service area or adding “bullet holes” back in to fill in gaps inside the newly defined service area.

A floating ZIP Code is usually a highly populated ZIP Code in a nearby larger city where your facility receives some patients placing the ZIP code in the top 75% of patient origin.  However, your market share of that ZIP Code may be very low, 2% for example.  You may want to omit this ZIP Code in favor of ZIP Codes closer to the facility where the facility has higher market share.  An example is 65432 above.  It is a very large ZIP Code in a metropolitan area south of our facility.  There are facilities that designate dream ZIP Codes in their service, meaning those they dream of serving.  This is fine as long as you don’t actually include these in your real service area, defined as those people you currently serve.

The benefits of a well-defined service area are: better use of constrained resources, more focused resources in marketing and physician liaison budgets and personnel, focused development of service lines, and better defined competitors.

Hurricane Sandy Affected Hospitals

There is no doubt that Hurricane Sandy had a disastrous effect on the eastern seaboard, especially the low lying areas of New York City.

The damage from the storm surge and high powered sustained winds has been broadcasted to the world throughout the day, and we noticed that we could not find a list of affected New York City area hospitals and their current statuses anywhere.

Below we have made a map of the area hospitals that have been effected.  Hospitals have either been classified as Closed or Trauma only.  Hospitals in the area have not necessarily closed their Emergency Departments, but it is strongly recommended that you seek treatment at a non-affected hospital if at all possible.

Here are the addresses and statuses of those hospitals displayed in the map above.

Hospital Address City State ZIP Code Status
NYU Langone Medical Center 550 1st Ave New York NY 10016 Closed
Bellevue Hospital Center 462 1st Avenue New York NY 10016 Closed
Hoboken University Medical Center 308 Willow Avenue Hoboken NJ 07030 Trauma
VA New York Harbor Hospital 423 East 23rd Street New York NY 10010 Closed
New York Downtown Hospital 170 William Street New York NY 10038 Trauma
Staten Island University Hospital 375 Seguine Avenue Staten Island NY 10309 Trauma
Southside Hospital 301 East Main Street Bay Shore NY 11706 Trauma
Jersey City Medical Center 355 Grand Street Jersey City NJ 07302 Closed
Coney Island Hospital 2601 Ocean Parkway Brooklyn NY 11235 Trauma

If you have any information or news to report regarding hospitals opening or closing in response to Sandy, please email us at info@stratasan.com

UPDATE 10/31/12 2:00 EST: Bellevue Hospital has evacuated its 500 remaining patients

Healthcare Effect – Hurricane Sandy

Hurricane Sandy is projected to hit the New Jersey Coast and maintain hurricane force winds north to Maine.  Due to the late October timing of this storm, it is expected to bring heavy snows inland from Tennessee to Maine.

This area of the country is the most populated area of the United States and cities are preparing for the worst.  The storm’s projected path contains more than 68,000,000 people and 30,000,000 homes.  A little under 17 million are children under 18 years of age.  In total, the area represents 228,393 square miles in our study analysis according to the Census and ESRI.

A small bit of good news is there are 982 hospitals and an estimated 250,000 physicians in the affected areas.  Hospitals, Physicians, and Emergency Responders have all been put on alert and are ready to respond.  Based on our experiences with Hurricane Katrina and Irene, tetanus shots will be needed for responders and people living in affected areas.

Healthcare Services Prepared for Hurricane Sandy

If you are living in a low lying area or near the coast, plan an evacuation route as water rises.  Many areas will be without water and electricity as Hurricane Sandy makes landfall.

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