Your Untapped Addressable
Market Model
Download the PDFYou are missing opportunities to increase patient volume.
For many specialty practices, their addressable market is far bigger than initially calculated. This is a direct reflection of how this is calculated, relying on patients diagnosed rather than those with ailments who haven’t yet approached their primary provider.
By not taking into account this untapped opportunity, specialty practices are often missing out on revenue that could be going directly to the bottom line.
Most PPMs believe prevalence represents their full addressable market. When you look across your practices and see comparable patient numbers throughout, why would you think otherwise?
Unfortunately, this is a costly miscalculation (Fig. 1).
Doing the Missed Revenue Math
Waiting for patients to be referred, or running the typical practice marketing strategy results in seeing patients that are far along their path...they have avoided what they believe to be the normal treatment for years.
This is where the untapped market comes in. Out of 100 patients in outreach, about 60 of them are simply living with their condition, and aren’t seeking treatment. (Fig. 2)
Example:
A middle-aged man with minor knee pain isn’t going to talk to a surgeon, because he knows he doesn’t need surgery. But he’s also not going to talk to his primary care physician. After all, how will his PCP help, aside from providing an unwanted prescription for a painkiller?
Candidates for treatment but are undiagnosed due to not knowing alternatives exist
Consider the Following Example
Say you have 60 patients with minor knee pain, where 25% of those patients would convert to get procedures:
Now consider that:
How many more months do you want to continue losing that revenue?
Try this with Your Practice
Now consider that:
How many more months do you want to continue losing that revenue?
“But the practice already feels busy.”
You might already have plenty of patients, so it’s tempting to write this off as unnecessary.
Aside from losing an opportunity to increase your EBITDA multiple, you have less control over the procedures, treatments, and therapies you perform. In other words, you’re accepting what’s coming to you, rather than making a decision to bring in specific types of patients that would be better for business.
What this means for PPMs
You can combat the impact of wage inflation and reduction in insurance reimbursements. Purposely accelerate your revenue.
Why It’s Going Unnoticed
Healthcare professionals often fall into the same mental trap as economists, where traditional economic theory assumes human are not human, but fully “rational” actors. Consider Bernoulli’s Utility Theory, written in the 1700s, which was adopted and endorsed with little challenge. The idea is that we base our decisions on the utility of something, as it relates to personal wealth or access.
Even though this theory would have been easy to debunk, people didn’t. Instead they just fell to theory blindness, taking the theory’s accuracy for granted.
A similar issue occurs in healthcare, making many of us blind to the patients that don’t seek treatment: Utility Theory does not account for any framing or comparison. Researchers like Daniel Kahneman have demonstrated that individual preferences are inconsistent when given the same choices, depending on how the choices are presented.
For instance, the man with knee pain might assume it’s an unavoidable or unfixable part of aging, or he might be skeptical of the medical field. Either way, he would avoid a procedure even if it would provide him significant utility. He won’t come on his own, but with the use of tactics based in neuroscience his behavior could change.
The Impact of Bias
Healthcare assumes if someone is dealing with pain they would seek treatment. Wrong.
This does not account for things like bias, or someone’s personal beliefs about treatment options:
- How does the ailment feel? Did they fade into it?
- What do they believe about potential cost (money, time, pain, etc)?
- What do they believe about themselves (age)?
- How was the information presented to them?
“If this is such a big opportunity, why isn’t everyone else doing it?”
It comes in part from a misunderstanding of patient psychology — in other words, we make quick assumptions about why they’re not coming in.
Patients consistently get lost in primary care, or they get lost in their own mind regarding what’s available to them. PPMs, meanwhile, are aware of these patients but aren’t seeing them as an opportunity. Persuading all of these patients to come in is probably more trouble than it’s worth, right?
But understanding these people is the reason TrackableMed works. We use neuroscience-backed approaches to drive behavior change in patients, so they’re the ones asking their doctors for certain procedures. This in turn helps determine what kind of procedures a practice performs.
This way, we let private practices take their patient composition into their own hands, getting more control over who shows up each day
