Healthcare Competition in Indianapolis
The paper analyzes the competitors of the local healthcare organization in Indianapolis and discusses the strengths and weaknesses of the activities of competitor organizations that exert the most intensive influence on the results of its work and competitiveness. Conditions for the development of free competition in the Indianapolis market are defined, and directions for the development of competition in the market of healthcare services are determined. At the stage of conquering the health services market, directions for organizing marketing activities have been developed for private healthcare organizations to create competitive advantages. Market relations involve the presence of competition, the free choice of healthcare providers, the conclusion of contracts between buyers and vendors of health services, and the expansion of the independence of healthcare providers from government regulation. Healthcare, as a particular environment, has its own characteristics, one of which is the humanitarian orientation of the provision of healthcare services, which determines the priority of healthcare results over economic performance. The effect of market laws in healthcare is determined by the peculiarities of the market for health services (France, Taroni & Donatini, 2005).
Government Regulation and Competitive Advantage
Preservation and maintenance of a competitive environment is one of the tasks of state regulation of the healthcare services market. The regulatory role of the state is expressed in the development of antimonopoly legislation and control over monopolies producing, for example, medicines. Competitors in the healthcare services market are private practitioners, private healthcare organizations, and state and municipal institutions. In order to withstand competition, it is necessary to have certain advantages in healthcare administration services: acceptable prices for consumers, a large assortment, quality, convenient schedules for doctors, the location of the healthcare institution, consulting support by qualified specialists, discounts for certain consumer groups, and a high service culture (Upson et al., 2012).
Competitive Functions of Healthcare Markets
One of the functions of the modern healthcare services market is a competitive function, expressed in the professional and socioeconomic competition among healthcare organizations to achieve high results in the diagnosis, treatment, and rehabilitation of patients, in servicing patients, in the manufacture of medicines, and in striving for the complete satisfaction of health needs through services and goods in high demand. In the author’s opinion, the competitiveness of a healthcare service is a combination of the consumer and value characteristics of that service that determine its advantage over similar competing healthcare services and facilitate its selection by consumers from a group of similar services (France, Taroni & Donatini, 2005).
Demand, Supply, and Pricing of Healthcare Services
The market of healthcare organizations operates through the interaction of the three most important parameters: the nature of demand, supply, and price. The defining factor in the needs addressed by a healthcare organization is the individual’s need to preserve and improve his state of health. In other words, the healthcare need is a lack of normality, a lack of personal physical and spiritual well-being, a lack of life, a lack of physical and mental freedom, and healthcare demand is the economic equivalent of the ability to meet the need for a health service. The market of a healthcare organization cannot be viewed in isolation from other markets closely related to it: medicines and supplies, medical equipment, the labor of healthcare workers, and scientific and technical developments in medicine.
Influence of Related Markets on Healthcare Costs
The impact of other markets on the healthcare market is due to two main factors: 1) Influence on the level of costs. Healthcare organizations use healthcare equipment and materials produced in other industries. Accordingly, the prices of goods in these industries have an impact on the level of costs in healthcare. 2) Influence on demand. The funds consumers are willing to pay for healthcare services provided to them are determined not only by the level of prices for healthcare services but also by the degree of preference. With a stable economic situation in other markets, the incomes of businesses and citizens increase, and they are ready to allocate more funds for healthcare (Upson et al., 2012).
Economic Conditions and Competitor Analysis
During an economic crisis, the financial resources of the population are reduced, the demand for paid healthcare services falls, and the effective demand of the population is reoriented to other markets. Their incomes also go there. Based on the analysis of competitors in the healthcare organization market in Indianapolis, the private healthcare organization offers the lowest prices for healthcare services. This organization is the leader in patient care among private healthcare organizations. At the same time, the organization is the leader in technical equipment (100%) in Indianapolis. The organization employs highly qualified doctors and mid-level healthcare personnel. Having carried out a comparative analysis of the marketing mix used in the organization and its competitor, we can conclude that both organizations provide a broad range of healthcare services and have their own production bases. The company is located in Indianapolis and cooperates with other service companies. There is one specialized ultrasound machine in the city of Indianapolis, and there are no branches in other cities (Upson et al., 2012).
Comparative Strengths and Weaknesses
Thus, having carried out a comparative analysis of the strengths and weaknesses of the competitors of the organization, we can draw the following conclusions:
1. Each of the healthcare organizations has a positive reputation, a high corporate culture, and high-tech and professional healthcare equipment. In the target structure, there are unique materials and developments for conducting scientific activity.
2. The organizations employ doctors with the highest and first qualifications. Foreign doctors work there, and healthcare personnel have the opportunity to study abroad.
3. The organization has 100% equity, while other organizations use 60% of their own funds and 40% borrowed funds, have a positive credit history, and periodically apply for loans.
Competitive Advantages and Evaluation Criteria
The main competitive advantages of the organization include flexible costs and prices for the services offered; the uniqueness of the group, its high quality and service provision; sophisticated service for the market segment; and an advantage over competitors due to a more mobile management system. Free competition in the healthcare services market is achieved if two essential conditions are met: comprehensive healthcare services can be rendered by practically any healthcare organization, and there are a large number of healthcare providers in a particular territory. Features of the assessment of the competitiveness of a healthcare organization include the following: the object of evaluation is the activity of a healthcare organization that provides a healthcare service; the assessment of the healthcare organization is related to the assessment of the quality of the process and the technology of service; the evaluation of the activities of health workers directly by the consumer; assessment of time characteristics of the provision of healthcare services; assessment of the provided service in accordance with the quality of service standards (conditions and service culture); and evaluation and integration of subjective opinions of patients who received a single healthcare service.
Limitations of Competition in Healthcare
Opponents of this approach argue that competition between healthcare providers will not allow the provision of quality healthcare while maintaining prices at a reasonable level. In their view, competition often encourages the creation of excess capacity and duplication of the organization, which can lead to the spread of the practice of imposing structure by suppliers. The main reason for the problems described above, in the opinion of opponents of competition in the field of healthcare, is that some of the main mechanisms by which competition in usual market conditions contributes to positive dynamics do not work in the health sector. For example, consumers of healthcare services are deprived of the opportunity to choose a suitable service provider based on the quality of its work, since they do not have all the information available to healthcare providers. In such a market, competition will not improve the quality of service.
References
France, G., Taroni, F., & Donatini, A. (2005). The Italian health-care system. Health Economics, 14(SUPPL. 1). https://doi.org/10.1002/hec.1035
Upson, J. W., Ketchen, D. J., Connelly, B. L., & Ranft, A. L. (2012). Competitor analysis and foothold moves. Academy of Management Journal, 55(1), 93–110. https://doi.org/10.5465/amj.2008.0330
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