Over the past five years, one of the fastest-growing trends in health care has been the rise of large provider groups: care organizations that employ tens or hundreds of providers, often have multiple geographic locations, typically do not offer inpatient services, and usually have a financial sponsor.
I’ve been closely watching how these shifting provider trends impact patient choice and booking share. To provide context, millions of patients visit Zocdoc each month to find and book appointments with tens of thousands of providers across every state, segment, and specialty. That means every day, patients are telling us with their clicks what and who they want.
Recently we have noticed a dramatic shift in the share of bookings between large provider groups and health systems. In 2018, appointments were split about evenly between these two segments. However, in 2023 we’ve seen that booking mix shift dramatically, to approximately 20% percent health systems and 80% large provider groups.
It’d be easy to say patients just prefer providers who are affiliated with large provider groups. But given these classifications are not obvious on Zocdoc, they would not influence a user’s booking decisions.
So this made us ask: What is driving this rapid shift, and how can other segments stay competitive in today’s market? We have identified three lessons from large provider groups’ ascent that any care organization can implement.
Lesson 1: Focus on the right numbers
Large provider groups think of themselves as businesses first and foremost. They accept that health care organizations operate with costs and revenue, and they reject the notion that profits conflict with professional responsibilities.
When our team visited the corporate headquarters of one large provider group, we saw a whiteboard of monthly new patient acquisition targets prominently displayed in the middle of the office. It’s not only possible but beneficial to think about how much each new patient contributes to a provider organization’s bottom line.
Large provider groups are fluent in the metrics that matter most to their margins: LTV (lifetime value) and CAC (customer acquisition cost). They understand the value of a new patient and spend accordingly to acquire them. For these groups it’s a straightforward process: they determine the CAC per marketing lever, set this against LTV, and act accordingly. Care organizations that overlook these metrics might pour money into vanity top-of-funnel tactics like billboards without understanding how to evaluate the return.
Large provider groups use CAC/LTV and other metrics to frame every investment decision regarding patient acquisition. Other provider organizations can focus on these data points to better allocate their marketing budgets, understand return on investment and drive their businesses forward.
Lesson 2: Always be available
For any high fixed-cost business, the main way to grow margins is by increasing volume. But too often, provider organizations attempt to grow margins through incremental projects, such as contract negotiations and billing automation. These are important features for a practice; however, they have a diminished impact if a practice is not attracting new patients or has gaping holes in its schedules.
Large provider groups know that the way to grow their margins is by focusing on getting more new patients in the door. One way they do this is by providing more near-term availability.
The typical Zocdoc booking is for an appointment that takes place within 24 to 72 hours. That’s a tight window for a practice to acquire a patient, but it’s one in which large provider groups are giving themselves more opportunities than health systems. Our data shows that large provider groups offer more same-day, next-day and three-day appointments than health systems. This approach responds to patient demand, where preferences for fast bookings prevail.
btaining new patients is critical for any provider organization to grow and thrive, and this can be maximized by offering what patients most want: fast access to care. Large provider groups have prioritized near-term availability, and focus on actual, retrospective utilization of time slots versus forward-looking metrics like “third next available appointment.” In doing so, they have seen their booking share grow by leaps and bounds.
Lesson 3: Be everywhere patients are shopping for care.
An incorrect assumption many care organizations make is that patients will stay in their app or always book through their website. That is akin to airlines presuming that passengers will only ever book through their own direct app or website, and thus never marketing their flights or open seats anywhere else.
The reality is that patients are consumers, and they are shopping for care across channels that are convenient and ubiquitous. Provider organizations must realize that patients cannot be owned. As such, they need to expand their reach beyond their owned channels and be visible everywhere patients are seeking care. Large provider groups tend to be savvy marketers, and they seek out deep channels of motivated, engaged patients who are ready to book.
Lesson 4: Time is money.
For mix shifts at this velocity, every day is another missed booking and another percentage of provider market share lost. This time-cost principle motivates large provider groups to act with urgency in all decisions, especially those that affect patient acquisition.
To that end, our data show that large provider groups make the decision to join Zocdoc in one-sixth the time of a hospital or health system. More time deliberating means more loss of market share.
Each segment has a critical role to play within America’s health care system. We should all be rooting for private practices and health systems to thrive. But large provider groups have gained 30% more market share in just four years, a trend that shows no signs of slowing. This dramatic shift signals the need for other segments to swiftly adapt if they want to compete for new patients. It’s time they acknowledge where their valuable bookings are going and act quickly to adopt these practices.
Oliver Kharraz, M.D., is founder and CEO of Zocdoc
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