Why couldn’t the analysts simply use the total population as the basis for determining the demand for obstetrics services? In 2007, the SHS marketing staff was instructed to assess the situation and determine the potential for maternity services within this market area then and in the future. This assessment was needed if SHS was to make a rational decision with regard to expansion. Because the state requires a certificate of need to add any new service, the data were needed to make a case for adding obstetrics beds. The SHS market analysts were cognizant of the need to not only identify the apparent potential for maternity services but also specify the effective demand.

As in any market research project, the analysts began by delineating the service area likely to be served by the proposed obstetrics program. Once satisfied that a defensible service area had been specified, the analysts profiled the population within that service area. They determined the size and characteristics of the current population and developed projections for the future that reflected anticipated changes in its demographic characteristics.

According to the data available at the time (three-year-old census data), the population of the service area in 2004 was approximately 42,000 residents. Estimates for the service area purchased from a demographic data vendor projected a 2014 population of 50,000. The SHS analysts thought this figure represented the maximum population capacity of the area because virtually all available residential land would be built up by 2014. The demographic characteristics of the population in 2004 also were determined and projected forward to 2014. The analysts focused on data on the age structure of the population (especially the number in their childbearing years), the marital status of the population (unmarried suburban residents typically don’t have children), and the racial and ethnic composition of the population. This latter attribute was considered important given the disparities in birthrates among the various racial and ethnic groups. The psychographic (or lifestyle) characteristics of the service area population were also analyzed on the grounds that people in different lifestyle clusters exhibit different attitudes toward childbearing