Community Need Assessments: 24 Years Later

Just because the impetus to complete Community Need Assessments is 24 years old, does not mean that your methodology and data sources should be. Corporate counsel across the country believe the Assessments should be accurate, current, scientific as possible and consistently applied.

1. Separate compliance and strategy.

2. Define the service area based on regulatory guidance.

3. Determine demand based on the age and gender make-up of the patient population.

4. Inventory supply using primary research.

5. Accept that the market changes often, limiting the shelf life of the Assessments.

We encourage Hospitals to embrace the fact that Community Need Assessments are compliance tools by their very nature. Why shouldn’t you include Interviews with the Assessments? Because opinions do not out-weigh an actuarial approach to determining demonstrated community need. In fact, opinions should not be considered at all.

Consultants only have themselves to blame for this confusion. Some firms, in an attempt to “split the middle,” promote Assessments that are both compliant and strategically relevant. In our experience, this approach dilutes both the degree of compliance and at best is strategically misleading.

One of the key that Community Need Assessments are not worthy proxies for strategy is because the service area for the Assessments must be defined in a very particular, compliant way.

We recommend that Hospitals define their CMS Service Area on an annual basis using the Hospital’s most recent patient origin data. These service areas reflect the fewest number of contiguous ZIP codes that make up at least 75% (90% for rural areas) of the Hospital’s inpatient discharges. As a result, the geography is typically much smaller than the service area used for strategy.

Beginning in the early 1980s, GMENAC produced a set of physician-to-population ratios which some still use to this day. Beyond being wildly aged, the problem with physician-to-population ratios is that they imply that all patients seek physician care the same, regardless of age and gender. This is simply not true, as anyone who has tried to secure physician care for both their children and elderly parents know.

Beginning in 2005, 3Dhealth partnered with Milliman to produce actuarial use rates that are both age and gender specific. Our baseline Physician Demand Model projects demand for both physician and non-physician provider services for a traditionally managed patient population. The utilization data is age and gender specific across 47 provider specialties, 2 genders and 6 age cohorts – resulting in 564 actuarial rates vs. single use rates. The model is also capable of adjusting the projected demand for physician services across the continuum from loosely to well-managed care.

It is safe to say that over the last 20 years we have looked at every potential source for inventorying the supply of physicians in a given market. At their best, we have found outside sources to be around 80% accurate. At their worst, they can ruin as Assessment.

As a result, we now have 7 full time Research Associates that inventory and test the supply of physicians across the country. With our approach and methodology, we are able to get physician supply databases 98%+ accurate on a daily basis.

We are often asked how long to rely on a particular Community Need Assessment. The short answer is not as long as you used to. While ultimately up to counsel, it is tough to argue that you can rely on an Assessment for three years. As a result, we have developed an approach that we believe is 100% compliant, while not being overly burdensome.

1. Complete a comprehensive Assessment across all specialties on an annual basis, or

2. Complete a comprehensive Assessment in Year 1 and Single Specialty Assessments in Years 2 and 3, or

3. Complete Single Specialty Assessments on a per recruit basis.

For more information, please contact Shane Foreman at [email protected] or Ron Flower at [email protected].