Additional Strategic Patient Profiling and Implications!
We have now covered these patient demographics and described the need to track and monitor changes that can impact cash flow: Ability to pay, Health Condition, Age, Gender, Nationality, Race and Religion. Next we will focus on Occupation and Income levels.
How patients make a living is vital since it influences the type of illnesses, health risks that can impact them. For instance you are practicing in the West Virginia and Pennsylvania coal regions your patients may suffer from lung cancer and have a high probability for major accidents. Even with all of the government regulations coal mining is still a very negative in terms of health.
Every profession has its potential health issues. Even if your patient group comprises of highly affluent, educated and health conscious professionals they are not immune from health problems. These individuals are subject to intensive pressure and are often impacted by drugs addiction, alcoholism or mental and psychological issues.
The message is that you must know the type of occupations your patients have now and might have in the future. This involves being aware of the employment condition and potential.
The US government has “declared a war on coal” and wants to stop its use in electrical generation. The result may be a huge reduction in the need for coal and the subsequent decline in coal mining companies and jobs. So in ten years the regions may not be coal mining oriented and may decline rapidly as other regions of the country have when the jobs disappear.
The same is happening with the high paying financial services jobs. The New York metropolitan area, including: New Jersey, Long Island and Connecticut have been highly dependent on Wall Street. Those employed in this sector have prospered and many healthcare providers have a significant number of patients from this sector. But this too is changing and jobs are disappearing rapidly. This in turn has reduced affluence and also the healthcare benefits that have help stimulate the healthcare market.
The message is that occupation impacts the type of healthcare, the ability to be paid and the cash flow of the healthcare providers. It is important to understand the type of employment in an area and anticipate changes. In some cases, the industry may be declining and there are large numbers of potentially unemployed. In other situations the nature of the employer may change. Companies merge or go out of business and are replaced with low pay and don’t provide health benefits. This will influence the ability to pay and they type of pricing strategies required.
The ability to pay and be selective is related the income levels and wealth of the patients. The higher the income and wealth of the patients influence their ability to be selective. There are many healthcare institutions that attract the very wealthy. For instance the Mayo Clinic, the Cleveland Clinic both have international reputations that attract the wealthy through out the world. Other institutions focus on the poor and needy and have become socially and publically funded. The same is true of the individual and group healthcare practices. Some are located in the highly affluence areas like Park Avenue in New York, Rodeo Drive in Los Angeles and so on and cater to the “rich and famous”. In today’s world there are increasing number of “rich and famous” from other countries and these are often targeted by some providers.
The key is to have some idea of the overall distribution of the income and wealth of patients so that you can determine how vulnerable and dependent your practice is to changing economics. This doesn’t require precise numbers but just ranges of income levels. If these are increasing, this is a positive and if they are deceasing it is a negative.
Income ties with other factors we have discussed. Occupation is one of these factors. If an area is changing because of industries or companies moving it will impact both the income and wealth of the population. Look at Detroit, which was once the capital of the American automobile industry and is now a highly depressed and declining area.
This requires that the healthcare industry and its providers track and understand the income changes and prepare for them.
When you have completed your assessment plot additional profile charts like this one. Plot CURRENT percent of cash flow from each category and the use an arrow to indicate changes you believe might impact these percentages.
PERCENTAGE 5 10 15 20 25 30 35 40 50 60 70 80 90 100
PERCENTAGE 5 10 15 20 25 30 35 40 50 60 70 80 90100
LOW MIDDLE CLASS
MIDDLE CLASS X—>
TOP 10% <——- X
TOP 1% < —–X