Porter's Five Forces Model Of Erlanger Health System

Porter’s five forces model defines the five forces that may have a relative weight on an industry these elements are known as bargaining power of buyers, the threat of new competitors, bargaining power of suppliers, the threat of substitutes, and existing rivalry (Lester & Parnell, 2006). When using Porter’s five forces model to identify the determinants of performance against my organization, I found that there is an existing rivalry with other area hospitals. I am employed at Erlanger Health System, which is categorized as a non-profit academic hospital (Erlanger Health System, 2018, para. 1). A non-profit hospital means they provide free care to patients that are willing to be put on a waiting list for funding for elective procedures (Andritsos

It is possible for a patient to want to go to a local competing hospital if they have exceptional customer service or if they feel that staff are more courteous in another facility. If a patient knows that a rival hospital does not have a large volume of patients in the emergency room, a patient may feel that they will be seen faster in this hospital versus a large trauma hospital where they may spend hours waiting before being seen by a doctor. At smaller hospitals there will be fewer patient rooms; therefore, the nurse to patient ratio is significantly lower than our large facility. If a smaller for-profit hospital were to employ a well-known highly skilled doctor to their facility, it is possible that patients will want to seek medical treatment from this doctor or surgeon because of their credibility. For example, if a surgeon was the first to successfully implant a total robotic heart chamber, which would be a new highly advanced technology device, I could only imagine that our hospital would lose many heart patients wanting to come to our facility because our surgeons have never completed such an advanced treatment for heart care. It would cause a threat to substitute one hospital’s products over

Although they have two small hospitals here in the Chattanooga area, they actually own an enormous amount facilities across the United States. As a former sales representative for a medical device company, I worked with the three different hospital systems in the area for pricing. Each of the three hospital systems had different pricing plans at each facility because of negotiation of pricing. Memorial Hospital which is the hospital that is part of the Catholic Health Initiatives group had the most bargaining power because of the number of facilities they owned. If we could not comply with their mandated prices on the implants for orthopedic spinal screws, they had the power to keep us from being a vendor at all of their U.S. facilities which would have had a significant impact on our sales business, so we had to comply to their negotiation of pricing. Erlanger Health System, my employer now, however, do not have as much buying power as their competitors because they only own six hospitals and they would not want our business to go to competitors, so their price plan is roughly 15% higher than their rival