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                 All successful businesses and organizations must start with understanding who their current customers are and which segments contribute to the most to their positive cash flows. This requires “profiling” of the current customer base and then a projection of how these demographics may change.

            In the last two notes, I discussed “how they pay” and “health conditions” as two key demographics that must be evaluated to determine how they impact cash flow, which I have asserted is the key measure of the “health of any organization or individual”. These charts illustrate the type of results you can achieve from these evaluations and forecasts.

How they pay

PERCENTAGE    5      10  15     20      25     30      35       40     50     60    70    80     90     100

OWN FUNDS                                      X—-à

PRIVATE INSURANCE                                                      

COMPANY INSURANCE                                                                              ßX

MEDICARE                                       ß-X

MEDICAID

OBAMACARE

OTHER

Health Conditions

PERCENTAGE       5      10      15     20        25     30      35       40   50     60      70    80     90     100

EXCELLENT

VERY GOOD                                 <—–X

GOOD

AVERAGE                                                            X

BELOW AVERAGE

POOR                                X_–à

VERY POOR

CRITICAL

            Healthcare is highly dependent on age and so this is the next demographic that I wish to discuss. Many healthcare practices and organizations specialize on age groups. Pediatricians focus on infants and early childhood, geriatric specialists on the aging. In some communities there are major changes occurring in each of these categories and the healthcare professionals must clearly understand what is changing and how these changes can impact their cash flows.

            Let’s examine some of the macro-environmental factors that impact cash flows:

            Infant and childcare: People are marrying later in life or not marrying at all. In some areas, the number of births is declining and because of the increased age of parents, many infants have different health condition and require different type of treatment. Mothers are increasing required to work and many not be able to provide the personal care that was traditional. Many children are not raised in childcare organizations.

            Young Adults are having problems finding jobs and have large debts and have no health insurance and a traditional belief that they are “invincible” and don’t require healthcare or are spending these funds on “diets and health clubs” instead of traditional healthcare.

            Aging Population. There is a dynamic group in the number of elderly. People are living longer. Medicare has become the single source provider for the vast majority of the elderly. We discussed earlier that the Medicare program has been lowering fees for the providers and reducing the coverage for many illnesses. It has become highly complex and many providers are either dropping the Medicare coverage or considering doing so. The cost of elderly care facilities is very expensive and not affordable.

            The message is that healthcare providers and organizations will require a thorough understanding of what is happening in their communities and specialties. First is track what is happening with the changing age demographics. Many communities are losing their youth populations since there are NO or FEW jobs for them. Companies are moving out of the area or are reducing employment or reducing or eliminating their healthcare benefits. Cost of living or taxes are so high that the middle class families can’t afford to live in the areas or are being forced to have both the parents work and have even more than one job. Healthcare institutions may be closing or being replaced with “part time” programs.

            These are just a few of the factors that can impact healthcare cash flows and must be understood, evaluated and forecasted. Next we will discuss GENDER demographics.

 

 

 

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Categories: Business Strategy

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