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How holistically taking care of children helped a leading hospital system create scale


A leading hospital system (CLIENT), primarily focused on pediatric care, had a strong interest in developing a strategy that would enable them to dominate the pediatric category. They believed the path to this dominance could be through innovation in customer service and the services offered to patients. This innovation had to be driven by a better understanding of market wants and needs.


The pediatrics market is currently consolidating as insurance drives down compensation. Additionally, competition – in the form of urgent care, drug store clinics staffed by nurse practitioners, and telemedicine – has greatly reduced the share of healthcare spend traditionally reserved for pediatricians.

A select few practitioners make this work, primarily by working longer and harder. These doctors tend to see higher retention and have a relatively loyal patient base. But save for these few “rock stars”, how can a pediatrics practice compete and maintain revenue stream?


LRC conducted a market study of the families in the geographic area served by the CLIENT. To achieve insight into children’s health issues, these parents were probed about their own health, as well as the health of all children in the household. Based on prior interviews, lifestyle issues were also a strong component of this research.

Based on the responses, profiles were created for 6 lifestyle segments of parents and 3 health segments of children.

  • The parent lifestyle/health profiles were created based on factors such as type of shift worked, financial stability/stress, hours slept, smoking habits, diet, exercise, and alcohol consumption. Not surprisingly, these factors contributed strongly to explaining the adult’s self-reported health.
  • The same analysis was conducted for the children in these households. The child’s sleep, diet, and exercise affected the health of the child as evaluated by the parent. A critically important finding was that emotional/behavioral issues were the top problem observed by parents – and their top concern regarding their child’s health. Interestingly, parents themselves had a strong impact on the child’s health issues. For example, the parents that fell into the high-stress segment tended to have children experiencing these issues in greater numbers.

Pediatricians are cited by the parents as the best resource to treat these emotional and behavioral issues, due to the perceived higher quality of care offered by these physicians. However, very few practices offered their patients these services. This presents both an opportunity and a threat.

Families continue to defect to competitive alternatives and the analysis suggested that this trend of using pediatricians will continue to decline unless steps are taken to change their positioning.


This research identified clear opportunities to define and dominate the pediatric category.

  1. To achieve stronger retention of existing patients, practices should address the desire for more convenient treatment hours, affordability, and communications. These service considerations are available from the growing set of competitive alternatives. Although the parent must contend with what they perceive to be a lower quality care, they are shifting more of their healthcare spend to these options.
  2. The more significant opportunity is through treating children’s health more holistically. This requires a focus on both the child’s physical and mental health. Mental health – including social, behavioral, and emotional health – is consistently identified as the parent’s greatest concern. No one in the market is currently addressing mental health as a part of children’s overall health. The organization that can provide a solution of this nature is likely to be seen as unique and incredibly valuable – in short, a category dominator.

Next Steps

The hurdles to achieving this position are financial and cultural.

Insurance does not currently contribute significantly toward the diagnosis and treatment of a child’s mental health issues. As most patients are highly sensitive to out-of-pocket costs, pediatric practices and healthcare systems have focused on what insurance will cover. This results in low staffing of mental health professionals and little offered in this vital category of treatment.

If the CLIENT can overcome this hurdle, they will be positioned to dominate the pediatrics space in their region and, potentially, beyond.

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