HCA421 week 2 Assignment Competition in Health Care

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Competition in Health Care
HCA421
Instructor September 8. 2014
Competition in Health Care
For this assignment the class was instructed to describe the different forms of competition that take place among various types of health care organizations, evaluate the benefits and pitfalls of competition in health care and suggest alternatives if competition was not the primary driver of operations in the U.S. health care system, explain the elements of successful competition and the use of competitive intelligence, describe the influence competition has on the services offered by health care organizations and the choices patients have.
Health care as in all industries, competition among businesses has long been encouraged as a mechanism to increase value for patients. In the overwhelming majority of industries, firms compete with each other to sell more products or services to customers, their purpose being to capture more of the customer 's dollar (Spath & Abraham, 2014). Many companies are free at any time to offer whatever products they think people need at any price they believe people are willing to pay. If customers will buy their product they will succeed; if not, they fail. This considered the nature of competition. Competition creates winners and losers inspires firms to constantly improve.
Competition in many sectors of the healthcare industry functions differently. The usual free market principles of supply and demand are distorted by an extensive regulatory framework at both the federal and state levels of government. State regulators may not allow all HSOs in one geographical market area to offer particular services. Price caps may prevent HSOs from charging whatever price people are willing to pay for healthcare services. Pharmaceutical companies are free to develop any new medication they want but must get approval from the Food and Drug Administration before it can be sold in the United States. Insurance plans may direct people to receive



References: Macfarlane, M. (2014). Sustainable Competitive Advantage for Accountable Care Organizations. Journal of Healthcare Management, 59(4), 263-271. Retrieval from EBSCOhost, www.ashford.edu/libraryMoseley, G (2009). Health Care Competition, Strategic Mission, and Patient Satisfaction: Research Model and Propositions. Retrieved from www.ncbi.nln.nhi.gov/. Spath, P., Abraham, S. (2014). Strategic Management for Healthcare Organizations, Bridgepoint Education, Inc. www.ashford.edu/books.

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