Feasibility Demand and Service Planning for Ambulatory Care Center
Client/Profile
A growing, 200-bed independent mid-Atlantic community hospital located in an expanding suburban market
Challenge/Situation
To determine the optimal size and service complement for a new ambulatory care facility to be located in an area where the hospital’s market position was vulnerable. Develop demand and financial assumptions for a start-up ambulatory operation.
Process
Veralon used a multi-faceted approach to help our client plan and evaluate the feasibility of developing the ambulatory care facility. Based on interviews with key physicians and an evaluation of medical staff support for the project, we identified specific services to be evaluated for inclusion. We also determined that one of the locations contemplated by the hospital was preferable.
Because there is no publicly available, credible utilization data for services such as mammography and bone density scans, Veralon developed customized demand methodologies. These were based on hospital outpatient utilization and market share, and on our own proprietary claims-based use rates.
We refined the project concept and structure, specifying the diagnostic services and physician office space requirements for a 15,000+ square foot building that was available in the target area. Finally, Veralon developed financial projections, including capital costs, revenues and operating expenses. We also assessed the potential impact of the new facility on hospital utilization volumes, in both internally competing and complementary services.
Results
We recommended that the hospital proceed to develop the center, building-out part of the space only as a shell, to allow for future expansion. The ambulatory care facility is now operational and deemed a success. The project has exceeded its goals for protecting market share, and expansion into the shell space is ahead of schedule.