Healthcare Chain Micro-Market Expansion & Location Strategy

Context

• Client: Multi‑city specialty healthcare chain

• Geography: India

• Objective: Prioritize micro‑markets and sites using demand, competition, and referral networks; deliver a sequenced 24‑month rollout.

Scope of work (delivered)

1. Catchment demand:

   • Census/Income: Analyze demographic data to determine the population of women of childbearing age, as well as income levels and socioeconomic status, to understand the potential patient base and their ability to afford private healthcare services.

   • Payer Mix: Identify the dominant payment methods in the market, including private insurance, corporate tie-ups/employer panels, government schemes (if applicable), and out-of-pocket payments. This helps to gauge revenue streams and potential for growth.

   • Competitive intensity: Facility/Doctor density: Map all major hospitals and birthing centers in the city, including multi-specialty hospitals with maternity departments and standalone birthing hospitals. Identify the number of beds dedicated to maternity and the number of practicing obstetricians and gynecologists in each facility.

   • Births by Hospital: Mapping the total number of births recorded annually for each key hospital in the city to precisely quantify the existing market share and demand distribution. This allowed us to directly assess the competition and identify areas with high birth volumes that present opportunities for a new facility.

   • Drainage Population: Analyzing the drainage population to quantify the demand for maternity services within a specific geographical area, helping to identify sub-pockets of high demand.

   • Disease Burden: Evaluate the prevalence of high-risk pregnancies and other complications in the city's population. This is crucial for assessing the need for specialized services like NICU and PICU.

   • Ratings: Collect and analyze patient reviews and ratings from online platforms, as well as through primary interviews, to understand the reputation and perceived quality of care for each hospital.

   • Price points: Conducted a detailed pricing analysis for various birthing services, including normal delivery, C-sections, and different room categories. This helps to benchmark the client's potential pricing strategy against the competition.

2. Referral networks:

   • Physician/KOL mapping: Identify key opinion leaders (KOLs) and influential doctors (Gynaecologists, Obstetricians, Pediatricians) in the city. Understand their referral patterns and professional affiliations.

   • Diagnostic/lab linkages: Map the relationships between hospitals and diagnostic centers/labs. This helps in understanding the existing ecosystem and potential for future partnerships.

   • Employer panels: Identify corporate tie-ups and health insurance panels that are prominent in the city's birthing market.

3. Site scorecards:

   • Footfall drivers: Analyze factors that drive patient traffic to specific hospitals, such as location, reputation, doctor affiliations, and specialized services.

   • Visibility, access, and economics: Assess the physical location of potential new sites, considering visibility from main roads, ease of access, and real estate costs.

   • Landlord pipeline: Research and identify potential properties and landlords for future expansion, evaluating their willingness to partner and the financial terms of a lease.

4. Financials:

   • Unit P&L with ramp curve: Develop a detailed profit and loss (P&L) model for a new birthing center. This will include a ramp-up curve to project revenue and expenses over the first few years of operation.

   • Sensitivity: Conduct a sensitivity analysis to understand how changes in key variables (e.g., patient volume, pricing, C-section rates) would impact the P&L.

   • Capital plan: Outline the capital expenditure required for setting up a new facility, including medical equipment (e.g., incubators, ventilators), infrastructure, and working capital.

5. Phased rollout:

   • Cluster sequence: Based on the city-wise analysis, recommend the optimal sequence for opening new birthing centers. This could be based on high-demand areas, areas with low competition, or proximity to key referral networks.

   • Capacity plan: Determine the ideal bed and facility capacity for each new center based on projected demand.

   • Activation calendar: Create a timeline for the entire rollout, from site selection and construction to marketing and launch.

Method & sources

• Desk:

  • Census/health datasets: Utilize publicly available data from government health surveys (e.g., National Family Health Survey) and census data to understand birth rates, institutional delivery rates, and maternal/infant health indicators.

  • Insurer/TPA data: Scrutinize data from insurers and Third-Party Administrators (TPAs) to understand payment trends and hospital utilization rates.

  • Real-estate listings: Research commercial and hospital real estate listings to assess property availability and costs in target micro-markets.

  • Secondary reports: Analyze market research reports on the birthing and maternal & child care market to gain a macro-level understanding of trends and forecasts.

• Primary:

  • Physician/patient interviews: Conduct in-depth, one-on-one interviews with a cross-section of stakeholders.

    • Doctors (Gynaecologists, Obstetricians, Pediatricians): Interview them to understand their hospital affiliations, referral patterns, and perspectives on the market.

    • Nurses/Midwives: Interview nursing staff to gather insights on patient flow, occupancy rates, total births, quality of care, and patient experience.

    • Hospital Administrators: Talk to hospital administrators to understand their business model, pricing strategy, and competitive positioning.

    • Patients: Interview recent and expecting mothers to understand their decision-making process, hospital preferences, and pain points.

  • On-site visits to key hospitals: Personally visit major hospitals and birthing centers to:

    • Map the physical infrastructure, including the number of delivery beds, operation theaters, and room categories.

    • Assess specialized facilities like NICU (Neonatal Intensive Care Unit) and PICU (Pediatric Intensive Care Unit), noting their level of care (e.g., Level I, II, III) and capacity.

    • Observe the overall ambiance, cleanliness, and patient flow.

• Models:

  • Scorecards: Develop a scorecard to evaluate potential locations and competitor hospitals based on a set of weighted criteria (e.g., patient demand, competition, accessibility, cost).

  • Heatmaps: Create heatmaps of the city showing key data layers, such as population density, income levels, and the location of competing hospitals and potential new sites.

  • Unit economics: Build a financial model to project the profitability of each new birthing center, including a detailed breakdown of revenue streams (e.g., vaginal delivery, C-section, NICU/PICU care, out-patient services) and cost drivers (e.g., staff salaries, consumables, rent, utilities). This will also incorporate ramp-up scenarios to reflect initial patient acquisition challenges.

 Deliverables

1. A city-wide map detailing key hospitals, their bed capacity for delivery, and neonatal facilities (NICU/PICU).

2. Analysis of market demand, competitive landscape, and pricing, based on primary interviews with doctors, nurses, and hospital administration.

3. An opportunity assessment highlighting potential micro-markets for expansion, considering demand, competition, and access.

4. A site scorecard model and a financial unit P&L with a ramp-up curve and sensitivity analysis for new ventures.

5. A phased rollout plan with cluster sequencing and a capacity calendar for future birthing centers.

 Illustrations