Optimizing Human Dock Service Menus Through Profitability Mapping

— Balancing Customer Value and Financial Sustainability in Healthcare Management —

In healthcare management, decisions regarding which services to offer and how many to maintain have a direct and significant impact on an institution’s revenue structure.

However, in many cases, medical institutions do not have a clear, comprehensive understanding of the overall profitability of their service lineup.

In this article, we introduce the concept of a Profitability Map—a practical framework for objectively reviewing service menus and improving profitability without compromising the value delivered to patients.

Understanding Your Current Menu Lineup

Through our management consulting work, we often encounter medical institutions where

highly unprofitable services have remained on the menu for many years.

These services are typically retained because:

• They have existed historically

• They were once in demand

• “It feels safer to keep them”

However, services kept for these reasons may, in reality, be dragging down overall organizational performance.

We recommend starting with a calm, objective visualization of

which services generate how much value and revenue.

Plotting Menus on Two Axes: Cost × Revenue

To assess profitability, we suggest organizing each menu item along two axes:

• Horizontal axis: Cost

  (staffing, materials, equipment utilization, operational time, etc.)

• Vertical axis: Revenue

  (price, sales per service)

Plotting all offered menus on these two axes creates a profitability matrix.

If obtaining detailed cost and revenue figures is difficult, a simplified approach can still be effective:

• Horizontal axis: total equipment occupancy time or total examination time

• Vertical axis: price per menu

Even this simplified visualization provides valuable insight into overall profitability.

What the Profitability Matrix Reveals

Once created, the matrix clearly shows how each menu is positioned:

• High revenue / Low cost: core services to strategically expand

• High revenue / High cost: important services with room for improvement

• Low revenue / Low cost: services whose role should be redefined

• Low revenue / High cost: services requiring the greatest attention

Many medical institutions are surprised to discover that

more low-profitability menus exist than they had assumed.

Profitability and Value Are Not in Conflict

A key point to emphasize is that

low profitability does not automatically mean a service should be eliminated.

For medical institutions to continue delivering value over the long term, it is essential to balance:

• Value for patients, and

• Financial sustainability for the organization

For low-profitability menus, consider asking:

• Are unnecessary service elements included?

• Is the menu composed only of components that truly create patient value?

• Are costs higher than necessary?

• Can profitability be improved through process redesign or restructuring?

Building systems that allow value to be delivered sustainably over time is critical.

Adjusting Bubble Size Based on Number of Users

As a next step, adjust the size of each plotted point (bubble) to reflect the number of users.

This often reveals important realities:

• Are many users concentrated in low-profitability menus?

• Are high-profitability menus being adequately selected?

If you observe a structure where“low-profitability menus attract many users,”

there is significant room for strategic reconsideration.

At this point, management must decide whether to:

• Continue expanding volume with low profitability, or

• Improve profitability in order to strengthen long-term sustainability

In particular, competing primarily on “low price” is difficult to sustain as a differentiator and carries significant competitive risk.

Careful judgment is required, based on utilization trends and information about nearby competitors’ menus.

Clarifying Direction by Understanding the Current State

This visualization makes several strategic discussions far more concrete:

• How can utilization of high-profit menus be increased?

• Should low-profit menus be improved or repositioned?

• Is it time to redesign the overall menu structure?

In other words, it enables a more concrete discussion about“which direction the institution should shift toward.”

Creating a Profitability Map Easily with Excel

This analysis does not require specialized tools.

1. List each menu with:

   
   

   • Cost

   • Revenue

   • Number of users

   
   

2. Visualize the data using Excel’s Bubble Chart function

With this alone, you can create a powerful overview document that captures your entire menu structure.

*If you are unsure how to create this chart or would like to conduct a more detailed analysis, please feel free to contact us.

Conclusion

A profitability map is an effective tool for

eliminating assumptions and evaluating service menus objectively.

To continue delivering value to patients over the long term,

we recommend beginning by accurately understanding the current state of your service portfolio.

In the next article, we will explore how competitive data can be used to redesign pricing strategies, and how medical institutions can establish pricing that reflects their unique strengths.

If you would like support in analyzing your own facility's data in more detail, please feel free to contact us via the inquiry form.