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Moody’s: New breed of for-profit hospitals pose competitive threat

A new breed of private health care company is partnering with physicians to create competition concerns, according to a report released Dec. 19 by Moody’s Investors Service. Private equity funds, hedge funds and/or private investors are funding outpatient surgery centers, imaging centers, and small acute-care hospitals in an effort to attract more profitable patients away from not-for-profit providers, Moody’s said. “These companies are not publicly traded and, compared to the publicly traded for profits and not-for-profits, are not required to disclose as much information about their strategies and financial performance,” the report adds.

[ via AHA News Now ]

Hospital Competition: The Unusual Suspects

At Hospital Impact, Tony Chen examines the competition hospitals are facing from 10 rather unusual areas.

The Search for Competitive Advantage

Why should patients select your hospital? What advantage do you enjoy over your competitors? What is it about your services that compels physicians and patients to make you their healthcare choice, if indeed a choice is available? Most importantly, what does your hospital offer that translates into an unbeatable competitive advantage?

The exploration of these questions is the essence of strategic planning. It involves gaining a clear awareness of your position in the market, identifying your advantages and crafting a series of actions to leverage them. How well a hospital is positioned to attract and secure market share--its ability to “capture” customers and dissuade them from switching to another provider--reflects its competitive advantage. As healthcare markets evolve from highly-regulated systems to open arenas of competition, healthcare leaders should view strategic planning through the prism of competitive advantage.

For the full story from HealthLeadersMedia.com, click here.

In search of a sustainable future for suburban hospitals

Many suburban community hospitals are caught in a strategic vise, facing competitive pressure at the upper end of their service spectrum from academic medical centers and sophisticated regional providers and at the lower end from physician- and investor-owned freestanding diagnostic and treatment centers. These competitive pressures are particularly problematic because the services affected — procedurally based inpatient acute care and ambulatory diagnostic and treatment services — are typically important factors in the bottom line of most community hospitals.

Read the full article in hfm magazine from the Healthcare Financial Management Association.

GAO surveys hospitals on responses to competitive market pressures

In response to a request from the House Ways and Means Committee, the Government Accountability Office is conducting a voluntary survey of general hospitals to understand how they respond to competitive market pressures. The survey has been sent to approximately 500 hospitals in selected communities. The survey asks hospitals about competition with other general hospitals as well as limited-service providers such as surgery centers, imaging centers and specialty hospitals. The GAO requests responses by Aug. 17, 2005. Please call American Hospital Association Member Relations with questions at (800) 424-4301. (via AHA News)

Competition Demystified

In Competition Demystified, Columbia Business School professor Bruce Greenwald takes aim at Michael Porter's classic five-source model for studying competition, Competitive Strategy, that most big companies use for strategic analysis. He counters with his own one-step game-theory rubric that boils down to one question: How easily can your competitors expand?

Greenwald draws on game theory to explain what you should do if barriers to entry are strong, weak, or nonexistent. He covers a wide range of examples, from retail to telecommunications to auction houses. 

Test drive the book here. Read an excerpt from Michael Porter's Competitive Strategy here.

The benefits of nonprofit/for-profit competition

Leaders at nonprofit and for-profit hospitals may be surprised to learn something about your traditional enemy: you need each other. It turns out that nonprofit and for-profit hospitals-when mixed in the same market-provide a balanced diet of sorts that improves the fiscal health of both and the overall health of the community. For the full story from HealthLeaders.com, click here.