What Is Customer Segmentation and Why Is It Important?

In modern healthcare, the delivery of services is increasingly built around the patient rather than the provider. This makes customer segmentation - an understanding of the differences among patients and their specific needs - an important aspect of designing successful healthcare operations and systems.

For those who work in or aspire to healthcare management, it’s an issue that impacts every type of operation they may manage. The movement toward customer segmentation also increases career opportunities, as managers now have a better chance of working with a patient population of their choice, such as those living in disadvantaged circumstances, the elderly and children.

One of the ongoing debates in healthcare is how to divide the patent population and determine the best approach to customer segmentation. Focusing care on specific populations such as children or the elderly is a longstanding practice in healthcare, but new companies now focus on segmenting populations by factors such as race and sexual orientation.

Defining Customer Segmentation

The idea of customer segmentation is not new to business, but is a relatively new concept in healthcare. Through segmentation, healthcare providers divide patient populations into distinct groups, each with their own specific needs, characteristics, or behaviors. That allows providers to tailor care delivery to specific groups.

It’s essential to patient-centered care. By gaining insights into healthcare customer behavior and needs, providers can focus on meeting those needs. Focusing on the needs of specific patient populations also helps better engage patients and encourage them to become more active participants in managing their own health.

Nursing homes that focus on senior care and natal units at hospitals are long-time examples of providing care specific to certain types of patients. But in recent years, healthcare providers have started to examine other ways to create customer segmentation that leads to more effective and efficient care delivery.

Customer Segmentation for Diverse Populations

Customer segmentation continues to change the healthcare industry in profound ways. Certain types of care have long focused on demographics such as seniors, women and children, or on the healthcare needs and risks of patients (someone with a chronic condition vs. a healthy patient, for example).

However, new companies are branching into serving areas with a variety of cultural, ethnic, racial and sexual orientations.

Writing for Forbes, Sachin H. Jain made this issue one of the top trends to watch for in healthcare in 2023. He offered some examples of further segmentation in the healthcare industry that seeks to serve and grow a customer base in diverse populations.

• Clever Care, a Medicare Advantage startup in Southern California, has grown in the Asian community through “focused benefit offerings, a carefully curated network, and a grassroots model that engaged community members,” according to Jain.

• Alignment Healthcare now serves members through its “el Unico” option that focuses on the Hispanic population.

• SCAN Health Plan, which is Jain’s company, partnered with Included Health to create Affirm, which focuses on providing healthcare products and services to the LGBTQ+ population. Jain wrote that the products will “unlock growth that might not otherwise be attracted to the market or the company.”

Another Way of Looking at Patient Segmentation

In a recent discussion paper, Mats Brommels, a professor at the Karolinska Institute in Sweden, argued that customer segmentation models in healthcare should move away from the model that segments patients by healthcare needs and risks. 

Brommels argued that healthcare providers should consider dividing patients into groups defined by the medical knowledge needed to manage their condition and the patient’s willingness and ability to self-manage their care. He suggested seven healthcare customer segments:

• Healthy patients

• Patients with incidental needs

• Patients with chronic conditions

• Patients with multiple health problems and illnesses (often seniors)

• Patients needing precise elective interventions

• Patients needing qualified accident and emergency services

• Tertiary care patients. 

The London Health Commission in the United Kingdom has also segmented the healthcare population in a way that allows for delivery of needs-based healthcare to everyone. In its report “Better Health for London,”  the commission segments healthcare consumers into “mostly” healthy patients, those with one or more long-term physical or mental conditions,  cancer patients, those with severe and enduring mental illness, those with learning disabilities, and those with physical disabilities. The report also has segments for those with dementia and those from socially excluded groups.

Around the world, healthcare leaders are putting a great deal of thought into how best to offer healthcare services in a way that best benefits patients. For those who work in all healthcare occupations, it’s a change that could eventually impact their job, as well as offer them more opportunities to work with specific patient groups.

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