What is Demand?
How will patients respond to a new service or a major change at the hospital? Will they use the new service? Will they come to the hospital more often? Knowing how many patients will use something gives you a foundation on which to base your other financial projections like revenue and costs.

In order to calculate demand you need a clear understanding of what demand means in a medical setting. It is not the number of patients who come to the hospital. A hospital doesn’t make money just by having a patient walk through their doors. They make money by what’s done to the patient while they are there. When a patient comes to a hospital they are using the services the hospital provides. The patient takes up a bed, they have blood tests, they have an X-ray, etc. So in a medical setting, these services are demand. Demand is the number of beds filled or the number of procedures performed.

Hospitals discuss demand in terms of what happens daily. How many beds are filed in a day? How many procedures are performed in a day? They use these daily figures to project weekly and annual demand. Once they know the demand figures they can calculate how much money or their revenue.

Daily Demand for the First Year
When you are conducting a financial analysis, you start by determining demand for the first year of a project. Experts are the ones who usually generate initial demand figures, because they’re the ones who know enough about the industry and other factors to make an educated guess as to what the demand will be.

Demand for a healthcare service is usually based on the following:

• The local population of a community


• The number of patient’s a physician is treating


• The distance a patient might be willing to travel for treatment


• Statistics on the specific conditions in the local area

Consult with expert sources, like physicians and specialists who will treat the patients, to determine the daily demand for the first year of the project you are financially analyzing.