New Market Expansion: A Case Study

Filed under White Papers & Case Studies

The Challenge
A large for-profit home healthcare organization came to Healthcare Market Resources through a consultant to help determine which of three markets they should enter for Medicare home health services. The southern-based client wanted to expand its operations into a new state, and all three potential markets were located within a one-hour drive from the state border.

HealthMR’s Expertise
The client purchased the Home Health Market Profile Report sets for all three markets. Initially, HealthMR assisted in determining which counties should be included in each report set by analyzing the primary service counties for the major home health providers in the markets – a service offered at no charge to all clients.

The Home Health Market Profile Reports provided the client with the following important information:

  • In the largest market, a single hospital-based program had a more than 45% market share, plus four for-profit chains accounted for a combined market share of nearly 49%.
  • In the second and third largest markets, major captive agencies had market shares of 41% and 54%, respectively.
  • In the second largest market, the for-profit competition was smaller and more locally-based.
  • In the second largest market, a careful examination of the visit levels per discipline per episode revealed less therapy visits than would have been expected. Inquiries uncovered a therapist shortage in this market.

The Outcome
Although the client was originally predisposed to choosing the largest of the three markets, the data provided by HealthMR helped them determine that the second largest market provided the best opportunity for successful expansion. The client realized they could differentiate themselves in the new market – which was closest to their existing branches – by utilizing their abundant pool of therapists to provide better therapist availability. As a result, the client had their therapy staff at the branch closest to the new market licensed in that state and developed a system of sharing therapists across state lines. Furthermore, as part of the final presentation to the client, the consultant also purchased HealthMR’s Hospice Market Profile report set for the chosen market and projected entry into the hospice business after two years.