The general operating environment that RRMC is in is very competitive both locally and regionally. Several large urban areas are a short drive from Gadsden and they have numerous health care facilities available with state of the art care. These include Atlanta Georgia, Chattanooga Tennessee, Birmingham Alabama, and Huntsville Alabama. It has been estimated that Birmingham alone draws as much as 25 percent of the business out of the Gadsden area. The patient revenue lost due to the combined out migration could be responsible for as much as half of RRMC's potential business. Locally, RRMC competes with Gadsden Regional Medical Center, with 248 beds, and to a lesser extent Mountain View Hospital, which specializes in addiction and psychiatric services. In addition to the competitive market, the factor of poverty also plays a significant role in the management of RRMC. Eighty percent of RRMC's patients are Medicare or Blue Cross, and Alabama has the lowest Medicare reimbursement rate in the nation. Blue Cross's near monopoly on insurance prevents RRMC from being able to negotiate more favorable patient rates. While RRMC is facing several difficulties in generating revenue, they have several advantages that are in their favor. The parent company, HMA, is a highly experienced and successful company in this field. They continue to be profitable and this will help RRMC expand and develop through the near future and the temporary economic downturn. One of the most significant advantages that HMA and RRMC have is their executive experience. Most of HMA's Board of Directors has been in place for over 25 years and have substantial experience in finance, medicine, and corporate management. Matt Hayes, named RRMC executive director in 2003, has a 10-year working relationship with RRMC and was previously the executive director of Stringfellow Memorial Hospital, another HMA facility. These years of experience, long working relationships, and financial success will greatly benefit RRMC in their plans to carve out a niche market based on specialization. In addition to the management expertise, RRMC has a state of the art emergency department, Heart and Vascular Center, a modern Diagnostic Center, and undeveloped space for future expansion.
Porter's Five Forces
One of the critical factors that RRMC is faced with