There are many reasons for doing a market area analysis. The interest in defining a pre-existing hospital’s market area is to determine whether an ongoing operation represents a main source of essential services to Medicare beneficiaries or other at risk groups and to assess an institution’s ongoing viability. The process begins by measuring its product―acute care services, and then determining its geographic service area. There is any number of ways of doing it, from studying an area’s demographics, analyzing a hospital’s discharges, employing a third party designation or developing a location / customer associated parameter.
Demographics are defined as the statistical characteristics of a population, such as age, income, race, family size, mobility, etc.―customer profile details. They’re helpful to business in identifying specific customer characteristics, tracking and projecting trends, and assisting in operational planning and future growth.
Hospital market parameters in various research studies appear to be viewed in one of four perspectives. The Dartmouth Atlas Project approached it within a ‘patient flow’ structure. It took its Medicare data, analyzing discharges, assigning zip codes to specific hospitals that captured a patient majority.
Valley and Englewood appear focused on either the variable or fixed radius model. The ‘fixed radius’ sets a circle defined by a specified mile related radius, with the hospital being the origin. The ‘variable radius’ is more a polygon, determined by a patient majority via distance or time traveled from zip codes.
The last market parameter is defined by ‘geopolitical boundaries,’ which is set by various government agencies. For example, the Office of Management and Budget establishes the ‘Metropolitan Statistical Areas’ (MSA) or ‘Core Based Statistical Area’ (CBSA) for various government programs, like Medicare rates. They tend to be large and not practical in defining single hospital markets.
Each of the various market parameters has its plus and minuses. As one reviewed the individual maps in the prior blogs, reflected on the total populations that surrounded each hospital, one may have recognized that Valley and Englewood’s fixed radius market model draws in other considerations. (See below) They have overlaps within their markets. The overlaps raise competitive challenges that require a management’s attentive consideration. If ignored, they would usually be done so at the expense of an entity’s financial future. In the case of Englewood, the financial oops is proposed to be at the expense of people living on the perimeter or outside its traffic congested market radii in New Jersey.
The overlapping market sections are competitive areas that raise the questions about Englewood Hospital’s decision process. It almost begs a comparison to Pascack Valley Hospital’s (PVH) ineffective leadership. How did Englewood Hospital justify their initial expansion investment to the DOH? How did they intend to compete for patients with two quality facilities a stones throw away? What was their contingency plan?
The chart below shows the shared populations. (Note: the counts represent two arcs overlapping and should be kept in perspective when trying to assess each hospital’s market potential.)
|
Valley Hospital w/ Holy Name Hospital |
Englewood Hospital w/ Valley Hospital |
Valley Hospital w/ Hackensack Hospital |
Hackensack Hospital w/ Holy Name Hospital |
Englewood Hospital w/ Hackensack Hospital |
Englewood Hospital w/ Holy Name Hospital |
|
19,536
|
11,869 |
55,813 |
337,598 |
236,854 |
298,128 |
Englewood’s actual location and Valley’s lack of competition, puts the residents that used PVH at risk. The State’s Report, in and of itself, is not a justifiable reason to say no to a reopened hospital in Westwood. The possibility of a denial becomes offensive when you add the fact that the proposed facility would be smaller and contribute to the tax base.
To be continued. . .
Is the n/e corner the new zombie zone.
Comment by Eric728 — October 6, 2009 @ 9:01 PM
Facts and politics, the living realm of oil and water. I thought the governor was supposed to be a financial whiz with roots in Wall Street. What wizardry is he applying to our property taxes and our hospital?
Comment by randoff123 — October 6, 2009 @ 11:14 PM
CAN’T UNDERSTAND WHY ANYBODY, EVEN A POLITICIAN, COULDN’T SEE IT’D BE ABSURD TO SAY NO TO THIS HOSPITAL
Comment by CarolAnn — October 7, 2009 @ 5:20 PM
Englewood is competing head to head in 90% of its imaginary market. How could anybody say Pascack should stay closed?
Comment by Dirk — October 7, 2009 @ 7:59 AM
You pointed out earlier that Holy Name was successful but with less beds then Englewood. It seems a more prudent decision for the DOH to ask weaker hospitals to cut back their own capacity. It sure as hell isn’t a good idea to stop taxpayers from having options in their health care.
Comment by Wafi — October 7, 2009 @ 9:41 AM
Holy Name must be a really good hospital if it can make money crammed in between two hospitals.
Its not right if Westwood has someone willing to put a hospital back at no expense to the property taxers. Its actually down rite stupid. Not fair to the people.
Comment by Danny — October 7, 2009 @ 5:26 PM
Didn’t see this coming. They want Pascack Valley kept closed to subsidize a hospital in a ménage à trios’ between home base and first? Valley Hospital is out in left field almost by itself? And we the people out in right field are told to go #%$K ourselves!!!!
Comment by Belcher — October 7, 2009 @ 10:28 AM
Looks like pay n play money must be in the mix if we don’t get this hospital.
Comment by Campy — October 7, 2009 @ 3:12 PM
Where are we headed. Whats the town doing while we wait?
Comment by Dogedog — October 7, 2009 @ 8:36 PM
I heard about this on my way in from work a day ago. It surprised me that I hadn’t heard of it before. After reading several articless I went back to the beginning and read then to now. A lot of effort. It angers me that we don’t have the hospital back. It angers me that our local politicians haven’t been more proactive. We hear sounds at rallies and read words in papers but they don’t say anything material to actually bringing the hospital back. Valley doesn’t need us. Englewood doesn’t deserve us. What is it going to take to get someone to listen?
Comment by Tron — October 8, 2009 @ 11:51 PM
I read in the Record last Tuesday I think, that there are 2 sets of candidates for Council in Westwood. Who do you think is going to be the best candidates for getting this hospital back?
Comment by C. Harper — October 11, 2009 @ 12:30 PM
What have your current ones done? Seems like the new ones could only be an improvement.
Comment by mandy — October 13, 2009 @ 3:39 PM