The Healthcare Village: Making Good Health More Convenient

With 78 million baby boomers marching towards retirement, the U.S. population is older and less healthy as cases of obesity, diabetes and other chronic diseases increase, says Donna F. Jarmusz, Alter+Care Senior Vice President, in a recent interview for the Inspire blog.  These same consumers dislike inconvenient, institutional healthcare delivery systems, are demanding and have high expectations.  We have a drive-through mindset and enjoy everyday consumer experiences– buying a cup of coffee, drive-up banking, picking up dry cleaning.  We hardly think about them because they’re all convenient and accessible.
Consumers are looking for a similar consumer focus in their healthcare services.  They are also looking to healthcare providers for preventative health resources to achieve healthier lifestyles.

As an industry, healthcare is facing numerous service delivery and economic challenges.  Physicians are experiencing increased stress due to declining reimbursements, challenges in managing their own businesses, higher operating costs, longer hours, increases in professional liability insurance premiums, and the challenge of living a balanced lifestyle.

Hospitals need more effective competitive strategies including new geographic, clinical and partnership strategies and more-sophisticated outpatient delivery systems. Competition for markets will be won or lost based on strategically located, well-designed facilities.

Then there’s the little matter of the credit crisis.  Most hospitals have more capital needs than capital resources.  So to expand their outpatient services, many healthcare providers are now utilizing outside capital sources such as Alter+Care. We utilize our capital to plan, develop, own and manage the facilities or the real estate required to house these outpatient services. This allows providers the opportunity to use their capital to provide services versus owning real estate.

Inside the Healthcare Village

The healthcare village is a destination, branded just like a lifestyle center, to provide a high quality, accessible, convenient, “one-stop” integrated customer experience.

The Healthcare Village addresses:

  • Increasing and retaining geographic and clinical services and demographic markets
  • Providing a proactive approach to introduce and expand wellness and preventive care as well as disease management programs
  • Providing high quality “seamless” customer experiences with timely access to “one-stop” healthcare services
  • Creating a retail mindset – high revenue per square foot operations
  • Utilizing Alter+Care capital to eliminate investment in “bricks and mortar”
  • Conserving hospital capital and available debt capacity to fund core services
  • Establishing physician-hospital economic alignment opportunities
  • Producing higher revenues & cross-referrals for all services
  • Creating a brand, image and reputation making it difficult for the competition to duplicate or challenge

Where Do You Start?

The first step in creating a Healthcare Village is to put in place a powerful anchor that can draw new and existing patients and support the other services. A wellness center generates high traffic and heightened visibility for all services.  A typical wellness center generates 500-800 visits per day. These members create additional healthcare referrals and retail sales based on the “one-stop healthcare experience”. Hospitals can realize indirect gross revenues from wellness center members and their families for inpatient and outpatient visits. Most healthcare providers will experience an increase in inpatient gross revenue in the 5-6% range and 11-15% in outpatient gross revenues.  The positive wellness center experiences translate into additional referrals and revenues for physicians and healthcare providers.

Another anchor service line is the ambulatory surgery center which offer elective, scheduled and profitable services.  These high ambulatory surgery volumes tend to be high revenue volumes. Surgeries will climb as the population ages creating additional demand for services.  Retail healthcare can generate sales between $600-1000 per square foot, if properly developed and managed.

So what other services would be collocated at a healthcare village? A comprehensive facility may include:

  • Physician offices: primary care & specialists
  • Imaging & diagnostics
  • Cardiology, Orthopedic, Oncology, Neurology Centers
  • Sports medicine & sports performance
  • Laboratory
  • Ambulatory surgery
  • Specialty clinics, healthcare retail, walk-in care
  • Wellness Center with fitness, physical, occupational & cardiac rehabilitation, medical spa & complementary medicine

The Doctor is In

One of the challenges facing hospitals is how to become more economically aligned with their physicians.  Physician-hospital revenue-sharing partnerships and joint ventures are becoming more and more popular since healthcare providers and physicians are experiencing declining reimbursements and revenues. More clearly defined safe harbors and greater certainty in the Office of the Inspector General’s (OIG) position regarding joint ventures has created a resurgence of interest in these partnerships.  Physician-hospital revenue sharing partnerships could be developed with the all of the above healthcare village services.

The conveniently located and accessible physical and cardiac rehabilitation services provide additional referrals for wellness center memberships, physicians and other services. Physician encouragement promotes a direct motivation for patient participation.

The Patient Experience

Working together to provide a more pleasant consumer experience, healthcare providers and physicians create a higher quality healthcare experience for their community.
Familiarity, accessibility and the convenience of the location of the healthcare village combined with seamless high quality customer experiences create successful financial partnerships for hospitals and physicians.

Healthcare providers can brand their hospital with the healthcare conscious aging consumer and build a positive image as the preferred provider of care. Physicians have an opportunity to increase their revenue and efficiency in the delivery of care in concert with other healthcare services.

Consumers have the convenience of a one stop healthcare and wellness destination in their own community.  Continued development of healthcare villages in various markets would give hospitals and physicians a distinct strategic advantage in their communities as a component of their long-term strategic initiatives.

To view the Healthcare Village website, click here.

Use the player below to listen to Donna’s entire interview:

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