Quick & Easy Market Analysis for Nursing Home Niches

Quick & Easy LTC Marketing Research & Analysis: How to Complete a Market Study

Today, we’re going to go over a quick and easy way to do market research for you to determine the viability of a new niche program for your facility.  Now, you can pick any niche – bariatrics, trachs, etc.  You just have to locate the statistical resources for your research.  I have selected an Alzheimers/Dementia unit for the purpose of today’s post.

Ok.  You have an idea for a new program for your facility to further develop census and attract new referrals.  Before you spend money on implementing this new program, you need to know if your market needs it.  The easiest way to do this is to do some market research.

First things first, you need to gather facts. 

I. Alzheimers / Dementia Demand

Some of these estimates were developed using the statistics obtained from the 2010 Alzheimer’s Disease Facts and Figures, an Alzheimer’s Association publication.  You can also look on their website www.alz.org for state-specific statistics.

I am going to choose Alabama’s stats to work with.    Pulling information from the U.S. Census Bureau and the Alzheimer’s Association, I can conclude the following estimates for AL.

Some of these numbers may not correspond to national averages, but remember, I am doing this for a specific state.  Your state’s numbers may vary.

Now, we breakdown the area we are going to study.  I have selected Tuskegee, AL simply because I have done a market study on that area before.

We’re going to take the county it’s located in, Macon, and evaluate it and it’s bordering counties. 

We apply the State % averages from above across the popultion in each age group listed to determine a nice estimate on the potential demand for Alzheimer’s/dementia care.

II.  Nursing Facilities Competitive Snapshot

Using the State Department of Health’s Facility Licensure stats, I am able to determine the following nursing homes are in my market area:

Using the same methodology (I won’t list all of these), I can determine that there are also 652 ALF beds and 497 Specialty Care ALF beds in my geographic marketing area.

III.  Summary

  • In the 7 county market area, there are approximately 9,765 individuals with Alzheimer’s/Dementia.
  • There are approximately 4344 nursing home (3195) and assisted living (1149) beds in the same area.  Right away, we can see there is potential for unmet needs.
  • 8 nursing homes in this area offer a total estimate of around 218 specialized Alzheimer’s/Dementia beds.
  • Netting the 218 specialized Alzheimer’s beds from the total number of nursing home beds in the market area leaves 2977 NH beds in the market area.

3195 – Total NH Beds

– 218 – Specialized Alzheimer’s/Dementia beds

2977 – Available supply of standard NH Beds

  • Let us assume that 218 of the 9,765 individuals with Alzheimer’s/Dementia are absorbed by the Specialized Alzheimer’s/Dementia beds.

9765 – Total Number of Individuals in this area

-218 – Specialized Alzheimer’s/Dementia Beds

9547 – Remaining market / demand

  • Without extensive study and costly further research, determining the exact number of Alzheimer’s/Dementia residents that are absorbed by the standard nursing homes is impossible.  Most nursing homes accept dementia and have a Wanderguard or other type of monitoring system designed to thwart elopements.  Let’s make an aggressive assumption that 65% of those beds absorb Alzheimer’s/Dementia market share.

9547 – Remaining market / demand

-1935 – (65% x 2977 NH beds)

7612 – Remaining market share

  • 40+ assisted living/personal care centers with 1149 beds are currently operating in the market area.  Nearly all report that they accept Alzheimer’s/Dementia residents in the early stages.  Again, let’s aggressively assume that 65% of the ALF beds absorb individuals with Alzheimer’s disease.

7612 – remaining market share from above

-747 – (65% x 1149 ALF beds)

6865 – Remaining market share

  • Let’s further assume that 40% of the remaining market moves to another market to be closer to family, dies of injury or illness before seeking nursing home-based dementia care, or has another situation which prevents nursing home placement.

6865  – Remaining market share

-2746 – (40% x 6865)

4119 – Remaining market /demand

There you go, a quick and easy and FREE market analysis on an Alzheimer’s/Dementia services niche.  Based on this result, I’d have to say that an Alzheimer’s/Dementia unit for this area may have potential and it definitely deserves more research. 

Hope this helps!!

***Thanks to Doug Harper for showing me this research model several years ago.

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