Competition in health care: strategies from other industries.
Health care managers can learn to adjust to competition by observing companies in other deregulated industries. Six basic strategies will separate the winners from the losers: Increase market share. This strategy requires not only increasing the share of current markets but also introducing new products and services into new markets. Scrutinize operations. Managers must be knowledgeable about strategic planning, adept at product line analysis, and skillful in using management information systems. Prune where necessary. Operations must be periodically reviewed to assess whether programs, products, and services continue to be profitable. Increase productivity. Productivity in this labor-intensive industry is essential. Wages may have to be reduced and staffing levels changed in the future to permit better control of labor costs. Increasing the volume of service, investing in nonclinical technology, and encouraging employee ideas also should be considered in seeking higher productivity. Strengthen the balance sheet. Hospitals should avoid incurring both long- and short-term debt, and they should attempt to accelerate repayment of long-term debt. Not-for-profit hospitals should investigate joint ventures, which spread the financial risk among investors, as means to raise capital to expand their operations. Increase cash. Prudent organizations will establish reserve funds, adopt fund-raising programs, and initiate improved cash collection systems. Health care executives also should reflect on how deregulation may affect their employees, the poor, and access to sophisticated medical procedures. The successful health care organization eventually will position itself in line not only with its markets but also with its mission and values.
D004465:Economic Competition; D004467:Economics; D005161:Facility Regulation and Control / Q000639:trends; D005376:Financial Management; D005377:Financial Management, Hospital; D014481:United States