MHA 506 Week 2 Market Segmentation in Health Care Example

Five Kinds of Knee Patients, Two Kinds of Referrers and One Employer: Segmenting the Market for an Outpatient Joint Replacement Program by Need Rather Than Age Alone

[Student Name]

University of Phoenix

MHA/506: Ethical Marketing: The New Health Care Economics

Week 2 Assignment

[Instructor Name]

[Date]

The health system, its market figures and segments are composites written for a model paper; national data and research come from the sources listed.

The first marketing draft for the system's new same-day joint program proposed advertising to everyone over 55 in the metropolitan area. The system's director of strategy and marketing set it aside. The first paper had shown that patients choose through surgeons, family and trust, and that different patients want different things. A plan aimed at everyone would reach no one well. This paper segments the market.

The Size of the Opportunity

Arthritis is common. Pooling national interview surveys from 2019 through 2021, Fallon et al. (2023) put the number of adults told by a clinician that they have arthritis at about 53.2 million, a little over a fifth of the adult population, with higher rates among women and veterans. Volumes keep climbing as the population ages; Shichman et al. (2023) projected that knee replacements alone among Medicare patients could top 1.2 million a year by 2040. Locally, the planning team counts roughly 4,100 hip and knee operations a year across all providers, a figure it expects to rise by about 4% a year as the local population ages and more working adults seek surgery earlier.

Bases for Segmentation

Markets can be divided by demographics such as age and income, geography, clinical characteristics such as diagnosis and health status and behavior such as how people seek care and what they value. Demographics are easy to measure but often poor predictors of what people need. The director combined all four, starting from needs.

Segment One: Working Adults Aged 50 to 64

About 30% of the market's joint replacements are in commercially insured adults under 65. Their main need is returning to work quickly, often to jobs that require standing or lifting. They want same-day surgery, clear time-off estimates, evening or weekend therapy and help with disability and leave paperwork from their employers. They research online and are more price sensitive because of deductibles. Estimated annual volume in the market: about 1,200.

Segment Two: Active Retirees

Healthy adults over 65 who want to return to golf, travel or walking. They value outcomes, same-day discharge and a surgeon's reputation, and they talk with friends who have had the surgery. Estimated annual volume: about 1,300.

Segment Three: Older Adults With Chronic Conditions

Patients with heart disease, diabetes or obesity who may not qualify for outpatient surgery and need hospital-level care and sometimes post-acute rehabilitation. They value safety and coordination with their other physicians. Estimated volume: about 900.

Segment Four: Adults Living Alone

About a quarter of older patients live alone. Their main concern is who will help them at home. They need home health coordination, transportation and a named contact after surgery. Many cut across segments two and three.

Segment Five: Family Caregivers

Adult children and spouses who research options, drive to appointments and provide care at home. They need clear information about recovery and their role, and often make the first call.

Business Segment: Primary Care Physicians

Primary care physicians refer patients with worsening arthritis. They want timely orthopedic appointments, clear communication after surgery and confidence that patients will be returned to their care.

Business Segment: Orthopedic Surgeons

Surgeons choose where to operate. They want efficient operating room time, reliable equipment and staff and a say in protocols. Several operate at a competing physician-owned surgery center, so the program must earn their cases through service rather than expect them.

Business Segment: A Self-Insured Employer

The region's largest employer, a manufacturer with 6,000 workers and a self-insured health plan, is interested in a fixed-price arrangement for joint replacement with guaranteed outcomes and quick return to work.

What Satisfaction Research Adds

Segments differ in expectations, and expectations matter. In a study of 1,703 primary knee replacements, about one patient in five was not satisfied with the outcome, and the strongest predictor of dissatisfaction was expectations not being met, which raised the risk more than tenfold, ahead of low function scores, preoperative pain at rest and complications requiring readmission (Bourne et al., 2010). The most effective marketing message for a knee replacement may be an honest description of recovery.

Segments the Program Should Not Chase

Segmentation also shows where not to go. Patients whose heart or lung disease is severe, whose diabetes is unstable or whose body mass index is very high are often not safe candidates for same-day surgery, whatever they prefer. Marketing that attracted them to the outpatient program would either harm them or lead to canceled cases and frustration. The program's messages therefore describe who is a good candidate and emphasize that surgeons decide the right setting with each patient.

Geography Within the Market

Segments also differ by place. The fastest-growing suburbs to the north have younger, commercially insured families and few orthopedic surgeons; the older neighborhoods near the main hospital have more Medicare patients and more people living alone. The surgery center's location, near the northern suburbs, suits segments one and two; the hospital-based program suits segment three.

How Segments Decide

Each segment reaches decisions differently. Working adults often begin with an online search and then ask their primary care physician; active retirees ask friends and their surgeon; older adults with chronic conditions follow their physicians' advice; caregivers research on behalf of parents, often at night. Knowing the path tells the program where to be present: in physician offices, in community groups for retirees and in online content written for caregivers.

Messages by Segment

Working adults will receive realistic return-to-work timelines by job type. Active retirees will hear honest outcome data and typical recovery milestones, including that full recovery can take months. Older adults with chronic conditions will learn about the hospital-based option and coordination with their physicians. Adults living alone and caregivers will receive a guide to home support. Primary care physicians will receive access guarantees and outcome reports. Surgeons will see operating room efficiency data. The employer will receive a bundled price proposal with outcome guarantees and a return-to-work target for its employees.

Priority Segments

The director prioritized working adults, active retirees and the self-insured employer for the outpatient program because they fit same-day surgery and are growing, while ensuring older adults with chronic conditions are directed to the hospital-based program. Primary care physicians are the most important business segment because they influence all patient segments and are often the first clinician a patient with worsening arthritis consults.

Measuring Segment Results

The program will track volume, referral source, patient-reported outcomes and satisfaction by segment, so the team can see whether each is being served well.

Conclusion

Advertising to everyone over 55 would have ignored how differently patients need and choose joint replacement. Segments built from needs and behavior, sized with national and local data and extended to referring physicians and an employer, give the program clear audiences. Research showing that unmet expectations drive dissatisfaction makes honest, segment-specific information both the ethical and the effective choice.

References

Bourne, R. B., Chesworth, B. M., Davis, A. M., Mahomed, N. N., & Charron, K. D. J. (2010). Patient satisfaction after total knee arthroplasty: Who is satisfied and who is not? Clinical Orthopaedics and Related Research, 468(1), 57-63. https://doi.org/10.1007/s11999-009-1119-9

Fallon, E. A., Boring, M. A., Foster, A. L., Stowe, E. W., Lites, T. D., Odom, E. L., & Seth, P. (2023). Prevalence of diagnosed arthritis: United States, 2019-2021. MMWR. Morbidity and Mortality Weekly Report, 72(41), 1101-1107. https://doi.org/10.15585/mmwr.mm7241a1

Shichman, I., Roof, M., Askew, N., Nherera, L., Rozell, J. C., Seyler, T. M., & Schwarzkopf, R. (2023). Projections and epidemiology of primary hip and knee arthroplasty in Medicare patients to 2040-2060. JBJS Open Access, 8(1), e22.00112. https://doi.org/10.2106/JBJS.OA.22.00112