As requested by Rob Geis, my supervising manager, this is an analysis pf the hospital industry. The industry includes licensed professionals in medical and surgical hospitals, providing inpatient care to needy citizens. As a primary resource for healthcare around the world, hospitals are a large contributor to the wellness of the citizens it serves. With 5,723 registered hospitals in the United States, the industry is a large and growing part of healthcare services (American Hospital Association, 2014). What is the potential growth? Areas such as projected revenue and future technology can be indicators for the potential growth of the industry. This normally monopolistic industry has been quite profitable but is now seeing competition from private sectors. With laws passing like the Affordable Health Care act there will be more insured Americans, making hospitals more accessible, therefore there is a greater potential for growth and demand. Projected Revenue The current revenue of the industry is 883.2 billion dollars. Projected annual growth is set to increase by 3.9 percent from 2013-18 (Phillips, 2013, pg. 3). With a low concentration level of major companies, there is a greater chance of separation of revenue between multiple companies. This separation of revenue can lead to higher market shares for a larger population of companies. Currently the industry is in the growing life cycle stage, meaning that the industry as a whole does not currently contribute much to the United States economy (Phillips, 2013, pg. 3). The growing definition denotes that there is a chance that at some time in the future the industry has the potential to contribute more to the market. Phillips (2013) also claimed that hospitals are ... ... middle of paper ... ...ill continue driving revenue” (pg.1). If this industry does begin to sink though, it will directly decline the hospital industry as a whole, potentially hurting a huge chunk of the market. Summary As seen in this report, the hospital industry is a multi-complex industry that is a top option for the wellness of the citizens it serves. Many subsectors and related industries are main contributors to the hospital industry, in which each has its own potential for growth or downfall. Knowing the main factors and ingredients which go into the industry will help make a more knowledgeable decision on whether or not to diversify into the hospital industry. Many aspects of the hospital industry are changing, but the hospital industry seems to be a solid stakeholder for healthcare. The hospital industry is a solid market for years to come due to the demand for care.
As individuals, we tend to hope for the better but that is just hope. Reality could bring unpredictable situations at any given time. When I wake up in the morning, I have no idea of what could surface in my healthcare. I can be doing great today and be on the verge of a healthcare crisis the next. Moreover, the healthcare industry does not always provide quality care and cost are unknown (Porter 2009, 110). If you have insurance, you are somewhat ready for unpredictable happenings but if you are uninsured, then your actual cost for services increases. The healthcare arena is always a topic of discussion for improving. Quality of care needs to be priority as we shift from a volume to value based care (Porter 2009, 112). Accountable Care Organizations (ACO’s) is a great example of a healthcare model that is creating value. ACO’s work by providing specialized care to Medicare patients by providing superior care that lowers overall cost (Devers 2009). Maybe other health care sectors could follow ACO models in the
At the end of 2006, HCA Holdings Inc. had a net income of $1.036 billion dollars which included reduction on professional liability, gains on investments, and gains on facility sales among other things (Sources of Revenue, 2016). Facility admissions, inpatient, and outpatient surgeries increased in 2006 in comparison to what was recorded for 2005 (Sources of Revenue, 2016). When analyzing the data over the life span of the company, it is easy to notice the growth and development that the firm has
A recent phenomenon in the health services is the burgeoning of outpatient healthcare centers. Particularly vigorous growth has been observed in centers that perform diagnostic tests and simple surgeries and procedures like colonoscopies. At the current state, outpatient care centers outnumber hospitals in Pennsylvania. Furthermore, these centers now perform one of every four surgical and diagnostic procedures in the state (Levy 2006). However, the trend applies nationwide, and other states could easily follow suit. Many critics have commented on the negative and positive aspects of this trend. What remains to be determined are the long term effects (on health and the economy) of this paradigm shift, in terms of the wellness of the community as well as economically. Proponents of the movement have pointed to the lower overhead for these clinics trickling down to lower costs for patients. However, critics skeptically question whether the real benefits are for the patients or simply as a mechanism to stuff physicians' wallets. When considered as firms in the marketplace, it is evident that these two groups, both servicing the health needs of the community, have vastly different balance sheets and income statements. This transfers over to a difference in operational functionality, profitability, and cost structure. Furthermore, the disparity of financial motivations that is visible in the varying profit margins is of concern to the community. All of these are important considerations to be made when considering the economic implications of this new phenomenon.
It would be necessary for a hospital administrator to look closely at ways to lower healthcare costs and provide more efficient care when a large employer like BRPP states they are thinking of relocating their employee inpatient hospital services to a company like InduShealth. InduShealth is offering substantially lower prices for several surgical procedures and a U.S. hospital administrator would not want to lose this large consumer population if it was possible to find more efficient methods of providing healthcare to their patients (McLaughlin & McLaughlin, 2008). One pricing strategy that a hospital administrator could advocate for is a bundled...
One primary key to a successful health care organization is having a strategy to achieve the mission of the organization. This is particularly true in reference to creating a budget and generating revenue for a profitable bottom line of a hospital. Executives are experiencing a gap that is continuously widening between technology and hospital demands, which is causing additional conversation around pricing. According to Nugent (2004), there are three major themes to consider when it comes to strategic pricing. These themes include pricing at the margin (pricing new business to cover variable costs and margin, if capacity exists), cross-subsidizing (funding one service with profits from another service) and testing what the market will bear
I. How has an industry grown to become a 32 billion dollars a year machine?
In the 1980s, hospitals were struggling with a nursing shortage. A new recognition called the Magnet program was awarded to hospitals which fulfilled certain requirements and had attracted and retained nurses (Dumpel, 2008). The question asked is if hospitals with Magnet Recognition deliver higher standards of care when compared to other hospitals. It is also been brought up that these hospitals are attracting more nurses to work for them due to their superior work environments. This paper will explore the actual effects the Magnet Program has on hospitals.
...ts with sum terrible edge of 31.3% for the similar former financial year period. Thus, should continue to show moderate growth compared to the macroeconomic medical device industry as a whole and develop more national and international market share.
According to Steven (2010), ideas are a connection of networks. These networks are created in the most unconventional places such as coffee shops and conference rooms. Most good ideas happen when people congregate together and share their interests, their mistakes. A lot of important ideas take time to come to fruition. This is because resources may be limited, not enough interest is generated. This paper is discuss the different sources of innovation, the trends and forecasts that can affect the healthcare industry and the role that disruptive innovation plays in the healthcare industry.
The region’s labor market is already tightening, as a result of which competition for skilled healthcare professionals is increasing. Kaiser Permanente would have to compete with the existing hospitals in recruiting and retaining qualified management and staff personnel responsible for the day-to-day operations of each of its hospitals and physician practices, including nurses and other non-physician healthcare professionals. The scarcity of nurses and other medical support personnel in the region presents a significant operating issue. This shortage may require Kaiser Permanente to enhance wages and benefits to recruit and retain nurses and other medical support personnel, recruit personnel from foreign countries, and hire more expensive temporary personnel. Competition for skilled healthcare professionals may lead to a further increase in Kaiser Permanente’s wage
54). The first step in forecasting is to develop the opportunity or threat with different alternative conclusions, which is most useful when using a brainstorming method (Ginter et al., 2013, p. 54). In addition, there is a need to identify the associations between the tendencies, changes, predicaments, and or likelihood of events and the environmental categories (Ginter et al., 2013, p. 54), such as the judicial/political environment of the Affordable Care Act. In doing so, it will allow management to see the possibilities of how these issues can affect the future of the company. In turn, this allows the management team to build a better strategic plan, so that the healthcare business has longevity in the fast-paced environment. However, one must assess all the information proposed from the scanning, monitoring, and forecasting of the potential threats or opportunities to the healthcare
Healthcare isn’t just health insurance, but hospitals, doctor’s offices, and dentist offices to name a few. Within the healthcare industry, some just see it as doctors, but there’s so much more behind it. The healthcare industry is the one industry that will never disappear, but will always be improving with better technology.
To meet the current needs of the organization and the community it serves there has to be an increase in recruitment and staffing at Community Hospital. Considering an opportunity is that the needs of the community will increase with the development of the automotive business opening up, bringing in new customers as well as the health care reform greatly increasing the amount of people that will be covered in the community. Not having enough staff to accommodate this increase in patients can be a potential downfall. Another weakness is the fact that the company has, in recent years fallen behind its competitors in the market sharing distribution. This may also be because of the threat recently from a competitor who has updated their facility drawing in more of the market
Market analysis can be considered as the most critical section of a strategic plan or business plan. It seems to be determining the survival and success of virtually every organization since no business entity operates in isolation. This crucial role of market analysis does not exclude the health care organizations. In the health industry, the market analysis allows health care organizations to determine specific health care consumers and their needs and what the organizations ' marketing mix should consist of. If a market analysis is properly done, it would guide organizations in tailoring their services and products to consumers who are most likely to patronize them (Tuma, Decker, & Scholz, 2011). It seems technology, demography, regulations, consumer forces, and the caliber of health professionals are constantly shaping the rules of healthcare competition. Therefore, it is imperative to consider these factors when performing market analysis. Besides, if strategic leaders in the health industry are to be successful with market analysis and strategy implementation, then they would need to follow specific direction or map in their strategic management process (Ginter, Duncan, & Swayne 2013). Ginter et al (2013. p.12), stated further that ' 'without a map, managers run the risk of becoming totally
According to recent studies conducted, the patients have aspirations that are changing. Customers are becoming aware of their health needs, demand less waiting time for their service, quick response, and better quality of service and availability of healthcare units nearby. These factors results in immense opportunity for the healthcare industries to set their foot prints in India. Reports from Mckinsy and IDFC state that Indian Healthcare Industry will be worth of US$ 125 billion by 2019.