Expanding Your Services
June 24, 2020
You wouldn’t blindly open a business without some information about the business landscape, and you wouldn’t open a new base without justification. These are the steps to take for expansion:
Evaluate the Need to Expand
Too often, decisions are made on perception and gut instinct rather than an in-depth market analysis supported by accurate data or “business intelligence.” The decision to expand an emergency transport program should be aligned with the strategic objectives of the organization, and realistically evaluated for financial sustainability.
The steps below provide a method for testing the assumptions that will either support or refute your belief that expansion is needed. If your assumptions are supported by accurate market research, you can include this information in your business plan and feel more confident that you are making an informed business decision.
- Measure productivity
- Review your missed call volume and determine what you were lacking in order to complete those transports. For example, more aircraft or ground vehicles; base relocation, etc.
- Study historical trends and identify the most important customers based on volume and their importance to your organization
- Conduct a competitor analysis and internally evaluate your perceived current market position
Evaluate the market for emerging conditions
- If you decide a new base or relocation is warranted, project the volume you will gain
The productivity ratio for a staffed vehicle (helicopter, airplane, or ground ambulance) is expressed by the number of hours the staffed vehicle is actively involved in revenue generation, divided by the number of hours the staffed vehicle was available to respond. The staffed vehicle is considered “involved in revenue generation” from the time it accepts a transport request until the transport is completed and the vehicle and crew are again available to accept a transport. Staffed vehicle availability is measured by the number of hours the vehicle is staffed and ready to respond to a transport request minus the total hours out of service for maintenance or lack of staffing. Knowing the production ratio becomes important when determining when to add or remove staffed vehicle hours.
Average transport time x number of transports (Output)
Total hours available for response – total hours out of service (Input)
You’ll need some data points to determine the productivity ratio along with the supporting demand analysis, including your volume, out of service hours, delayed or missed transports and transport request frequencies for your most recent 12-month period.
Planning for Growth
The best way to plan for growth is to periodically evaluate the level of productivity and the program’s effectiveness in meeting patient transport needs to forecast a future expansion if the trends continue.
- Quantify the specific need
- Research the economic conditions
- Estimate the competitor response
- Quantify how the expansion will benefit the organization
- Analyze the alternatives
Develop a startup plan
At this point in the process, you should have evaluated the base/vehicle/crew productivity and determined that the current resources are near or at maximum capacity for providing efficient services or no longer support the organizational goals. You should have done an evaluation of the need for expansion and hopefully been planning for this growth as you recognized the approaching need. Now you have decided it is time to expand the program and you need to develop a plan.
- Finalize the location
- Develop a timeline
- Develop a project plan
- Evaluate progress
A lot of time and hard work goes into planning for growth. After you have successfully opened the new base or added the additional resource, take time to celebrate with your team. This milestone validates the hard work everyone put into the project as well as the overall success of the program.
ADM to Traditional
Check out our case study on an air medical program that went from an Alternative Delivery Model (ADM) to Traditional in a matter of months.