‘Snowbirds’ and ‘med-à-terres’: The market behaviors shaping systems’ growth decisions

 Health systems are expanding into Florida and other Sun Belt markets, chasing population growth and the patients who have relocated there. At the same time, a growing share of wealthy retirees are anchoring themselves to health systems by purchasing second homes near their longtime physicians in major cities.

The trend, which The Wall Street Journal recently dubbed the “med-à-terre,” has surfaced in markets including New York City and Rochester, Minn., where patients maintain ties to institutions like Mayo Clinic even after relocating. Unlike a traditional “pied-à-terre,” a home kept near a city for business or leisure, the med-à-terre is organized around access to specialized care.

For health system leaders, these parallel trends add another layer to how organizations think about growth, patient loyalty and market expansion.

“The folks that we work with that are assessing these types of moves absolutely are doing those calculations,” Dan Clarin, managing director at Chicago-based Kaufman Hall, told Becker’s.

While the med-à-terre trend illustrates the lengths affluent patients will go to preserve access to their longtime physicians, Mr. Clarin said local systems in high-growth markets should not assume incoming patients are permanently or exclusively tied to their out-of-state institutions. 

“For the organizations that are local to Arizona, Texas, Florida, the Carolinas, where some of this migration is happening, there still is the opportunity to capture the patient and the care if you have the right solution — if you have the right specialists, if you can demonstrate high-quality care,” he said. He added that local systems should consider whether to build those capabilities themselves or pursue partnerships with academic medical centers that can lend specialty depth.

Meanwhile, organizations entering markets such as Florida are typically pursuing two objectives simultaneously: attracting snowbirds, retirees and other new residents while maintaining relationships with existing patients who split time across multiple geographies. 

“The organizations that we see are absolutely assessing the market opportunity and the ability to convert patients from wherever they’re getting their care currently,” he told Becker’s. “In a lot of cases, they’re also considering these moves in the first place because they’re already seeing that some of their existing patients have homes or maybe are coming from these new markets.”

Mr. Clarin noted that some health systems are beginning to think about destination loyalty in more measurable terms. Rather than viewing patient attachment to a health system as anecdotal, some organizations are using claims data to better understand how much of a patient’s overall care they capture.

“It’s been a bit taboo, I think, to talk about it in healthcare as being share of wallet,” Mr. Clarin said. “That’s a common term that is used in retail or consumer goods industries, but sometimes we use the term ‘share of care.'” He said the concept helps executives quantify patient loyalty by measuring what percentage of an individual’s overall care remains within their system.

Recent expansion activity reflects health systems’ continued interest in growth markets. Somerville, Mass.-based Mass General Brigham has expanded through a joint venture with Tampa (Fla.) General Hospital, while Chicago-based Northwestern Medicine has partnered with Clearwater, Fla.-based BayCare Health System and Naples, Fla.-based NCH Healthcare System. Nashville, Tenn.-based HCA Healthcare and Altamonte Springs, Fla.-based AdventHealth also continue to expand their Florida footprints.

Some systems are also pursuing expansion through partnerships rather than standalone facilities. Susan Fahmy, vice president of clinical M&A and strategic alliances at Mass General Brigham, previously told Becker’s that the organization chose a joint venture with Tampa General rather than “planting its own flag” in Florida because it viewed the partnership model as a way to expand access while avoiding additional fragmentation. 

The trend also raises capital-allocation questions for nonprofit systems. Investments aimed at attracting commercially insured patients in new markets must be balanced against investments in community-based services closer to home.

“There’s always tension with mission-driven organizations about how to allocate resources between building destination services for patients with good insurance companies to pay for care and serving community needs, which is also really important,” Mr. Clarin said. “If we’re investing resources outside of our core market in the hope of attracting a certain profile of patients, that has to be part of a portfolio of investments, and not the only strategy for a mission organization.”

https://www.beckershospitalreview.com/strategy/snowbirds-and-med-a-terres-the-market-behaviors-shaping-systems-growth-decisions/