Working as the Senior Market Analyst for this Health giant in 2002 provided an exciting time.
Employed principally to provide accurate market share information on their four main health segments required a great deal of skills in the arena of communication, market research and analysis. While tables for Mayne’s Hospitals and Diagnostic imaging departments are shown in Mayne Strategy article, this article concentrates on the market research aspect of the role and provides tables of Mayne’s Hospital, Pathology and General Practice market share for that period.
Note that this is historical data and no longer confidential due to Mayne Group's de-listing in 2005.
The process of establishing a baseline market share report in which your employer are the major competitor can be daunting. One percentage point relates to millions of dollars in revenue and the reports can form the basis for complex decision making at board level.
In this case, in-depth market research was required in an on-going basis to refine iterations of calculation methods. For instance, as Government reporting on the past revenue associated with the public hospital system was refined by them (shifting Medicare values) and future estimates changed, my models needed to be modified. While public hospital data was created by some Government departments, this needed to be compared to other data tables to estimate monthly values.
The terminology was also relatively complex meaning that what was included in the estimates was often as important as what was left out. Also the health system tends not to report on actual revenues used (except at a high level) so several data sets needed to be sourced and combined to estimate actual revenues.
Research for the private sector was often much more difficult, but when located proved to be more accurate over the short term.
You will see from the hospital market share table below that by the end of my tenure the segmentation of hospital revenue was getting fairly complex.
Mayne Group Hospital Market Share April 2002
As you can see Mayne’s aggressive acquisition campaign, which included Dorevitch Pathology, gave it higher market dominance in this industry than in hospitals.
Mayne Group Pathology Market Share
This was a very difficult area for Mayne to compete in. Like its strained communications with specialists in hospitals, some of the negotiating and media stories on Mayne’s foray into this area garnered negative opinion. One of the issues was that once a company like Mayne took over a practice, there were legal restrictions such that GP’s could leave that practice but could not set up a practice in competition with the original practice within a prescribed large radius.
It was also discovered by many health companies that GP’s were a potentially large driver of usage of Pathology and Diagnostic Imaging services. Thus it was believed to ensure healthy revenues for Pathology and Diagnostic imaging chains, that the parent companies should also acquire general practices. This lead to a form of bidding war that dramatically over inflated the prices paid for acquiring established practices, leading to several very experienced practitioners retiring early.
Market data for General Practice was very minimal during this time, however my research and analysis of other health segments uncovered a high correlation between one of those fields and the General Practice total market value. Using this relationship and forecasting methods employed for the base forecast data meant that the GP market could be accurately forecast for the first time.
You will see that while the market share for Mayne Group’s fledgling GP segment was very low, it did provide them with an understanding of how large the market was and what kind of budget commitment was required to gain any sizeable proportion of the market.
Mayne Group GP Market Share June 2001
Market Research and Market Analysis techniques played equally important roles in the generation of these graphs and strategies that could then be created to continue growth plans.
Thorough research is always recommended before any kind of analysis or strategy is created. In this case while the majority of data collected was free, it was not always easily accessible. One of the main skills in this kind of project was understanding how the pieces fitted together and what the level of reliability of the data was.
If you need to run any form of research project and would like an independent professional to spearhead your efforts, I look forward to your call.