Background of the Medical Sector in the US - Perpetual Mercy Hospital - Case Study Example

?Perpetual Mercy Hospital Case Study Contents Introduction 3 Background of the medical sector in US 3 Objective 4 Alternative solutions 5 Recommendation 6 Implementation strategy 7 Conclusion 7 Reference 7 Bibliography 8 Introduction The current case is of a hospital named Perpetual Mercy Hospital who might face a stiff competition in future. This is a nonprofit general hospital which is the largest in the city and one of the largest in the country. It is financially self sufficient. It has a clinic- Downtown Health Clinic which had a good reputation in the community. The main objective of the Downtown Health Clinic was to expand its activities, increasing the number of privately insured patients and establish and maintain good relation with the business community. The present case reflects the situation of analyzing the organization’s strength in combating competition. Background of the medical sector in US In USA earlier hospital sector was considered as a fully charitable sector which was used by the doctors as field of practicing their skills. The entire hospital sector was funded by some trusts who wanted to do some charitable work. In 1960s the whole scenario was changed with the introduction of the Hill Burton Act. The hospitals were provided with more and more funds for expansion construction work and other facilities. During this time the commercial insurance sector that is the medical insurance sector also grew a lot enabling the general people to take advantage of the medical facilities. More over the employers also started giving medical facilities to their employees in terms of fringe benefits. Fringe benefits are the benefits given the employer to the employee in cash or in kind (Thuronyi, 1998, p. 515). Again in 1980s the US hospital sector experienced a vast change in terms of innovation in medical facilities like the introduction of health maintenance organization, preferred provider organization and ambulatory health care facilities. In one hand the US government reduced the medical aid provided to the hospital in other hand the health maintenance organization that provided preventive medical facilities and preferred provider organization who served as a link between medical facilities provider and employer reduced the normal foot fall of the patients in hospital. The emergency and repetitive health care was also taken care by the ambulatory services. As a response to the changed environment of the health sector the Perpetual Mercy Hospital also involved itself in the work of preferred provider organization through their clinic named Downtown Health Clinic. Objective The main objective of this case is to find out a possible way in which the Downtown Health Clinic can be made most efficient in fulfilling the expectations of the patients and at the same time becoming a non replaceable clinic. The main objective of the Downtown Health Clinic was to expand the hospitals referrals base and also to increase the footfall of the insured patients which in turn will help them to become financially self sufficient. As the Peripheral Mercy Hospital main objective was to use the Downtown Health Clinic as the preferred provider organization and enhance the base providing the employment physical examination and workers compensation and treatment. Another thing of concern is that only 35% of patients are from referrals. The main objective of the clinic was to increase the referral base but as the percentage of patients coming through reference in quiet low. Another objective of the case is to extend the working hours in an effective way so that the clinic does not have to bear much cost for increasing the working hours. The patients also complained about the waiting time. The objective of this case is also design the working hours in such a way that will reduce the waiting time of patients. Moreover as most of the patients served by the clinic were female therefore at the clinic should offer more services to the female patients. There was also a suggestion of introducing a gynecological department but starting this type of service will increase the cost. The possible competitor of the Downtown Health Clinic is Med centre who is famous for aggressive marketing strategies to promote and make a hold in the market. Hence the Downtown Health Center should concentrate on promoting its services as the competitor is also planning to provide the same services that the clinic is providing. Hence another objective of the case is to provide a well planned effective strategy to promote the services of the clinic without making any cheap publicity and also which will be cost effective. Alternative solutions To solve the problems of the problems of the clinic and making it efficient in combating the possible competition which the Down Town Clinic may face in future the Peripheral Mercy Hospital may take a number of steps. Firstly the hospital must follow a product strategy. The present product strategy should be changed following the change in the need and expectation of the patients, chance in technology and governmental policies. The product strategy is mainly changed because of changes in customers’ needs, products life cycle, governmental policies and technology (Havaldar, 2010, p. 165). As the patients need more services to be provided exclusively to the female patients hence the plan its services as per the need of the patients. The Peripheral Mercy Hospital should shift one of its gynecologists to the Downtown Health clinic to serve the female patients there. Moreover the hospital can also transfer its whole time employed doctors so that the patients can be provided service quickly. To reduce the cost incurred by the clinic the hospital should appoint an analyst who would analyze the various sources from which cost can be reduced. Another option available to the hospital is to brand the clinic and its services. Brand can be defined as a code which interprets the services it offers to the consumers. Branding enables the customer to differentiate between the organizations. It gives the organization a new identity (Bashe and Hicks, 2000, p. 14). The services as well as the clinic should be branded so that the people of the downtown can be aware of the services provided by the Downtown Health Clinic. For making any recommendation the hospital should analyze the following factors critically: - added service, cost associated, and image of the clinic in the community, competitor’s strength and weakness and influence of the possible demographic change on the clinic. Demography means the change in population in respect to size, composition etc (Siegel, Swanson and Shryock, 2004, p.1). Recommendation Given the situation faced by the Downtown Health Clinic the most accurate solution available to the organization will be to make changes in the service it offers. As the clinic is operating in the area of Downtown for a considerable period of time, it has gained trust of the people of the community. The clinic can utilize this trust in branding its services. If the service is branded then it will be very tough for any competitor to get a market share of the brand equity. Hence the clinic will not be affected by any competitor. Implementation strategy To create a brand image and branding its services the organization has to use some marketing techniques. This involves classifying the services of the organization in a unique way and the communicating it to the target customer. Promotional activities should be done in order to make the people aware of the uniqueness of the services. For bringing change in the services offered the organization should utilize their available recourses in this case the whole time employed doctors of the hospital should be utilized for offering any additional service , this will help to control the cost. Conclusion In this case the main challenges faced by the hospital have been identified. The main problem of the clinic was that it was not able to deal with the change in the customers’ needs. More over due to lack of branding the organization was also vulnerable to the competition. Hence the hospital should plan the services of the clinic in such a way that it can sustain in stiff competition. Moreover branding will also enable the clinic to have an edge over to any possible competitor. Reference Havaldar, K. Business Marketing: Text & Cases 3ed. India: Tata McGraw-Hill Education. 2010. Bashe, G. and Hicks, N. J. Branding health services: defining yourself in the marketplace. USA: Jones & Bartlett Learning. 2000. Thuronyi, V. Tax law design and drafting, Volume 2. USA: International Monetary Fund. 1998. Siegel, J. S. Swanson, D. and Shryock, H. S. The methods and materials of demography. USA: Emerald Group Publishing. 2004. Bibliography Kapferer, J. The new strategic brand management: creating and sustaining brand equity long term. Great Britain: Kogan Page Publishers. 2008. Read More