Yesterday we took a brief look at the most basic of market measures – market size and trends in market size (see Trends In Market Size – The Most Basic Of Market Metrics all members). But those metrics are just the very tip of those available the deeper into each market you look. When executive teams drill down into their data, there are three levels to keep in mind.
Service-Specific With Consumer Segment
Macro Market – Yesterday I laid out eleven markets most health and human service providers should focus on. For this example, I looked at the mental health market – the Substance Abuse and Mental Health Services Administration (SAMHSA) estimates that national spending on mental health treatment totaled $147 billion in 2009, marking a 359% increase over mental health spending from 1986 ($32 billion), and a 32% increase over spending in 2004 ($111 billion). Here is a look at the spending trends by payer type:
|Distribution Of Mental Health Spending By Payer, 1986-2009 (millions)|
|Other State & Local||8,751||13,817||16,096||19,069||22,234||154%|
Service-Specific – The increase in spending on mental health treatment between 1986 and 2009 was driven primarily by an increase in utilization and the cost of prescription drugs, although the rate of increase decreased between 2007 and 2009. In 2009, outpatient care accounted for 32% of total mental health spending, followed by prescription drugs (28%), inpatient care (17%), residential care (15%), and insurance administration (7%). Here is a look at the spending trends by provider type:
|Mental Health Spending By Provider Type, 1992-2009 (millions)|
Service-Specific With Consumer Segment – The next level down into the data is a look at service specific numbers, within a state or consumer type. Here is a look at Pennsylvania, SMHA-controlled mental health expenditures (see Revenues and Expenditures Reports from 2010)
|Pennsylvania SMHA-Controlled Mental Health Expenditures (in millions), 2009-2010|
|State Psychiatric Hospital-Inpatient||$494.9||$395.5||-20.1%|
|Community Mental Health||$2,902.0||$3,159.3||8.9%|
This is the kind of basic market research that every executive needs to have access to, and as executive teams become more proficient at analyzing the vast amounts of data that will become available, this “information literacy” will become the newest differentiator of competitive advantage.