Competition in Healthcare
September 17, 2012
In all industries, competition among businesses has long been encouraged as a mechanism to increase value for patients. In other words, competition ensures the provision of better products and services to satisfy the needs of customers (Glover & Rivers, 2009). In the health care industry, competition has an impact on many relational perspectives. There have been several studies examining the relationships between competition and quality of health care, competition and health care system costs, and competition and patient satisfaction. Some elements of competition in health care are price, quality, convenience, and superior products and services. One type of competition that takes place in health care amongst the various types of health care organizations is the business’s existing competitors. The existing competitors are the ones that the business has been dealing with for many years. There are also potential competitors, which are companies that are currently operating in another industry or market, but show interest in entering the business’s industry or market. Some examples are; firms operating in other geographic regions seeking to expand their markets, firms offering similar and related, but not directly competing, products that wish to expand their product lines, customer firms that decide to integrate backward in the industrial value chain, suppliers attracted by margins may choose to integrate forward in the chain, a small, strategically weak firm becomes a serious threat of entry when it is acquired by a company that can reduce or eliminate the weaknesses, firms that feel threatened by a move into their markets might retaliate by moving in the opposite direction, and firms that have a possible fit or synergy with the critical success factors in the industry (Moseley, 2009). Attention must also be paid to indirect competition, those entities offering...
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