Emanuel Medical Center - Case Study Example

Emanuel Medical Center Case Emanuel Medical Center Case EMC’s Service Category and Service Area EMC handled emergency care, in-patient, and outpatient services. There were surgical services, acute care, general medical services, monitored care, intensive care, and all other acute inpatient services handled in the center’s central facility. The outpatient services offered at the center include outpatient surgery, clinical laboratory, and radiology. EMC also expended diagnostic and rehabilitation services to its patients. Patients received such services as routine radiology examinations, mammograms, speech, and occupational therapy from the center. The facility offered assisted-living care that many patients preferred to other hospitals (Fisher, 2009). EMC’s Service Area incorporated the wide city of Turlock and the smaller towns in its periphery. Out of eighty percent of EMC’s patients were residents of the primary service area, sixty-four percent came from Turlock. The twelve small towns in the Turlock’s periphery were EMC’s secondary service area and were within five and fifteen miles from EMC. The secondary service area provided fourteen percent of all ECM’s patients. Residents from without EMC’s primary and secondary service area made up the remaining six percent of EMC’s patients. EMC had a mixed customer base comprising of cultural diversity and patients of different ages. In 1999, EMC recorded that 40.1 of its patients were 65 years and older, patients between 15 and 44 years of age formed 33.2 percent, and the 14-year olds and younger formed 10.2 percent. Hispanics were 32.5 percent of EMC’s patient population and were the fastest growing segment of emergency department admissions. In 2002, the population of EMC’s primary service area was about 200,000 that was a nineteen percent increase from its population of about 168,000 in 1998. A big proportion of EMC’s patient population was baby boomers (Fisher, 2009). Service Area Structural Analysis Intensity of Rivalry among Existing Organizations There are many hospitals and surgical outpatient clinics within 50 miles of Turlock that compete for patients’ loyalty. Kaiser Permanente’s contract with Memorial Medical Centre of Modesto is one of the large HMOs that provide EMC with insurance-covered patients. HMOs add to EMC’s market advantage because they provide it with this section of the patient population. However, the proximity of EMC’s competitors accelerates the fight for patients. Doctors Medical Centre dominate three top locations of Modesto, Memorial Medical Centre has two patient service locations in Modesto and one in Ceres and Emanuel Medical Centre’s third highest patient population is from Delhi in Stanislaus County. This demonstrates that hospitals can expand their service areas beyond their cities of location in order to realize more revenue (Fisher, 2009). There are many outpatient clinics opening near EMC but most serve the indigent and slide their payment scales on patients’ affordability. Thirty five percent of the patient populations of these clinics have Medi-Cal cover and forty percent use out-of-pocket expenses. The rivalry among general acute care facilities in Stanislaus is high. The proximity and quantity of the general acute care facilities is what ratifies this rivalry (Fisher, 2009). New Entrants There are many accreditations needed by governing bodies for starting and operating hospitals in California. California Office of Statewide Health Planning and Development, Joint Committee on Accreditation and Licensing and California Department of Public Health are some of the health governing bodies in California. Kaiser Permanente is intending putting up facilities and a hospital in EMC’s service area. The prevalent economic conditions in Stanislaus are limiting for hospitals to expand and gain extra market share. Low reimbursement rates, EMTALA regulations, and medical technology costs have been leading to negative profit margins. In light of the incumbent conditions in Stanislaus provide only the entry of small and federally funded health centres. Growing nurse shortage makes it difficult for new hospitals to find and retain nursing staff. The threat of new entrants in the California’s hospital industry is low (Fisher, 2009). The threat of Substitutes The Stanislaus County Health Service Agency provides residents with alternatives for emergency care other than Emanuel Medical Centre’s emergency care facility. Urgent Care Centre in Modesto offers treatment for minor illnesses and injuries. Medical offices in Modesto employ nurses and physicians who provide care to residents including prenatal care, primary care, and pharmaceutical needs. Similar offices in Turlock provide similar services. There is an office in Modesto that provides services such as urology, podiatry, gastroenterology, HIV treatment, neurosurgery, neurology, orthopaedics, and oncology. This threatens EMC because it does not offer some of these services for instance oncology. Stanislaus County Health Services Agency accepts up to twenty insurance forms including Kaiser Permanente and Medi-Cal and provides residents with insurance via indigent care programs (Fisher, 2009). There is a possibility of alternative and complementary medicine is a possible substitute to general hospital acute care. Alternative medicine includes traditional Chinese medicine, osteopathy, acupuncture, massage therapy, and chiropractor. Statistics show that 57.8 percent of Californians resort to complementary and alternative medicine. This indicates that there are few barriers to public access to alternative medicine. The threat of substitutes to formal medical care in California is high. Bargaining power of suppliers Physicians and nurses are two main players in regards to general acute care hospitals. The demand for nurses has gone up but their supply has not increased. This is eminent in the growing shortage of nurses in the country. The rise in demand and fall in supply has made nurses’ salaries to go up. Hospitals are raising their offers to nurses in a bid to attract and maintain them. These offers include hiring lift teams to reduce nurses’ physical stress, flexible working hours, bonuses, childcare services, and tuition reimbursement. Physicians are dropping Medi-Cal patients because of Medi-Cal’s decreasing reimbursement. HMOs are regulating the freedom of physicians to decide which procedures to administer. The bargaining power of suppliers in the health services is therefore high (Fisher, 2009). Competitors Below are EMC’s key competitors with their strengths and weaknesses Competitor Strength Weakness Kaiser Permanente The third largest health insurer in the country Commands thirty three percent of all revenue from health insurance carriers Affiliated to 8 organizations in Turlock and 6 more in Modesto Does not provide urgent care services Patients have to be Kaiser enrolees to obtain services Catholic Healthcare West Has new technology for cancer care Gets reimbursement rate per Medicare in-patient stay that is above average Recognized as the largest non-profit health care provider Has experienced workers protests over labour disputes Rates lowly interms of ICU mortality rate and patient satisfaction Threats by Medicare/Medi-Cal reimbursement for outpatient surgery services Tenet Healthcare Corporation High nuclear technology for cancer treatment Makes high revenue and donates to charity Improved employee satisfaction and better quality standards High administrative turnover Offer few services relative to its competitors Competitor mapping In regards to total reimbursement amount per Medicare in-patient visit by number of services offered there are two strategic groups. Oak Valley is an independent hospital that poses minor threats to EMC but provides a wide range of services. The hospital needs EMC’s attention because it has built a new hospital and can provide more services and this can take a portion of EMC’s market share of patient. Catholic Healthcare West is in strategic group two because it generates a regular range of income and offers a wide variety of services. EMC may lose some of its patients to this hospital seeking for the procedures not offered at EMC. This would give this hospital more market power in certain procedures (Fisher, 2009). In regards to total quality of service provided by total capital assets, there are three strategic groups. Oak Valley is in strategic group and its does not create large capital surplus relative to quality of care it produces. The level of quality healthcare services it provides does not suffice to make excess revenue. However, it is building a new facility and EMC needs to monitor it in order not to lose any market share due to additional capital surplus. Catholic Healthcare West is in-group two because it provides average care and maintains consistent capital and invests it in expansion and new technology. These investments build on the hospital’s quality of patient experience and increase their net income. This is something that EMC should monitor. Kaiser Permanente is in strategic group three because it has high quality of care, high revenue levels, new technology, and new facilities. These are all reasons for EMC to be on the lookout (Fisher, 2009). Reference Fisher, J. A. (2009). Medical research for hire: The political economy of pharmaceutical clinical trials. New Brunswick, N.J: Rutgers University Press. Read More