Health Care Sector

Health Care Sector

Brief Excerpt from Industry Overview Chapter:

Companies in this industry provide a wide range of health care and social services through hospitals, doctors' offices, nursing homes, outpatient surgery centers, and other facilities. Major companies include Ascension Health, HCA Healthcare, Kaiser Permanente, and Tenet Healthcare (all based in the US), as well as Fresenius (Germany), National Hospital Organization (Japan), and Ramsay Health Care (Australia).

COMPETITIVE LANDSCAPE

Health care reform efforts in the US and other developed countries are changing how providers are reimbursed for care. More attention is being focused on rewarding or penalizing institutions based on efficiency standards and the quality of care delivered. As pay-for-performance reimbursements are implemented, health companies are consolidating to better compete and negotiate with suppliers and insurers. Slim operating margins and a minimal ability to raise prices makes eliminating wasteful processes essential. Obtaining grants and federal funds is key to profitability in the case of many nonprofit health care providers.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major services include patient care which accounts for about 65% of the industry's revenue. This is followed by assisted daily living (ADL) and dental non-surgical intervention which both account for about 5%. Other revenue sources also include dental non-surgical intervention; medical and diagnostic testing; appropriations from the government; and government contributions. Leading health care entities in the US include a number of for-profit entities, an exception to the global norm of nationalized medicine. However, among the community hospitals in the US hospitals, around 60% are not-for-profit,...