Analyzing the Boston Health Care Market in 1993: A Five Forces Analysis of Mount Auburn Hospital's S

Boston Healthcare Market in 1993

How Would You Evaluate The Boston Health Care Market In 1993? Use a Five Forces Analysis To Evaluate Mt. Auburn Hospital’s Strategic Position.

Compare Their Situation To That Of The Current Merger Proponents Discussed In The Boston Globe Articles. What Is The Same? Is Anything Different?

What Are The Benefits To Mt. Auburn And Their Key Stakeholders Of Merging? Is Staying Independent An Option?

There Are Multiple Options For Mt. Auburn. What Do You See As The Pros And Cons Of Each? 5. If You Were In Mckinzie’s Shoes, What Would You Do Next?

The healthcare market of the United States of America includes several organizations located in the different regions, most of which have been recognized to be privately owned. Over the years, the organizations in this industry have strategized various means to increase the scope of their business and thereby gain a competitive edge in the market (Silva et al. 2015). The essay will further discuss the case of Mount Auburn Hospital of Boston, and their proposed strategy of forming a merger in order to develop their business operations in the Boston healthcare market.

The Boston healthcare market in 1993 was characterized by an availability of adequate workforce, the industry having gradually grown at a rate of 4.7 per cent between the years 1993 and 1997 (Hutson 2015). This healthcare market not only consisted of private hospitals but also non-hospital healthcare settings in the suburbs of Boston. Mount Auburn Hospital can be identified as a recognized community hospital in Cambridge and affiliated with the Harvard Medical School (Mountauburnhospital.org 2020).

The strategic position of the hospital can be analyzed with the help of the Porter’s five forces model. This model helps in evaluating the external competitive forces that may be working upon the organization, and the various threats and opportunities thus available (Dobbs 2014).

Competitive rivalry– The hospital faces a high threat of competitive rivalry from the other hospitals of the regional health network of CareGroup as well as merger formations like that of Massachusetts General Hospital and Brigham and Women’s Hospital (Tsai and Jha 2014).

Bargaining power of the suppliers– The hospital faces low threat from the bargaining power of the suppliers; as it is a community hospital, part of the regional health network.

Bargaining power of the customers– The hospital faces low threat from the bargaining power of the customers as healthcare services and facilities always remain in demand irrespective of economic situations.

Merger Proponents

Threat of new entrants– The hospital faces low threat of new entrants due to the limitation regarding skilled workforce in the sector.

Threat of substitutes– The hospital faces high threat of substitutes due to the presence of several non-hospital healthcare facilities in the region.

The current merger proponents as observed in the merger between the Massachusetts General Hospital and Brigham and Women’s Hospital can be identified to be based on the strategy of providing enhanced standards of healthcare services to the patients (BostonGlobe.com 2020). Reinforcement of the health systems and expanding them to meet the growing requirements of the patients at affordable rates is another primary factor influencing mergers in the healthcare industry (Fiercehealthcare.com 2020). These merger proponents are aligned with the interests of the Mount Auburn Hospital in creating an enhanced system of healthcare services for its patients. The proposition for the new POE (Physician Order Entry) project, aimed at improving the stages of ordering and dispensing medical services highlights the strategy of the hospital in creating enhanced healthcare systems, that can be propelled further through appropriate mergers that may aid in the data collection and processing operations. In this regard, it can be said the situation of Mount Auburn Hospital is similar to that of the merger proponents in the case of Massachusetts General Hospital and Brigham and Women's Hospital.

The different stakeholders that can be identified in Mount Auburn Hospital and the impact of the merger on their stakeholders can be discussed as follows:

Patients– The impact of the merger on the patients as external stakeholders of the hospital may be considered positive. It is so because, the merger will ensure provision of enhanced quality of services to the patients at lower costs (Guerin-Calvert and Maki 2014).

Physicians and employees– The physicians and employees of the hospital and its partner company will face certain challenges due to the merger but will ultimately be benefitted. These challenges may include conflict situations due to differences in opinions and methods of conducting organizational activities. However, the merger will also lead to an improvement in the infrastructure and technology available to provide healthcare services to the patients. Such improvements will ultimately help in the enhancement of the performance of the physicians and employees from a professional outlook.

Insurance companies– The insurance companies will be benefitted from the merger, as it will help in the improvement of services provided to the patients, thereby reducing the rate of failure in curing ailments and diseases.

Benefits to Stakeholders

Pharmaceutical companies– The pharmaceutical companies will be benefitted from the merger, as increased amount of resources will increase the demand for advanced drugs to cure difficult ailments in an efficient manner.

However, remaining independent is also an option for Mount Auburn Hospital in the case that they are able to acquire the required resources for the enhancement of their current healthcare service standards. The introduction of the POE system will improve the efficiency of the staff and employees in being able to track the data of the patients.

The alternative option available to the hospital is the introduction of the POE system. The pros of the system include enhancement in data collection and processing, along with order and delivery systems. The cons of the system include the requirement for adequate resources and capital to incorporate the system, along with resistance and conflict among the employees during the change implementation process.

The following recommendations can be provided to the head of Information Systems of Mount Auburn Hospital, Robert Todd:

Communicating the need for the introduction of the POE system with the hospital administration and employees so as to prevent discrepancies and conflicts in the change implementation process.

Evaluating the funds and resources required to efficiently carry out the change implementation process.

Considering collaboration with an Information Technology firm that can provide the required POE system and manage the training procedure among the employees, so that they may be able to adapt with the new system and utilize it efficiently.

Conclusion

From the above discussion it can be deduced that in order to bring about development in business activities and gain a competitive advantage in the healthcare market, Mount Auburn Hospital may engage in the formation of a merger, which will not only enhance the quality standards of it services but also reduce its cost of operations. However, an alternative available to the hospital is the introduction of a POE system that will enhance their operational efficiency. Furthermore, such a change can be effectively managed through possible collaborations with an organization that may be able to provide the POE system and train the employees of the hospital to use it in an efficient manner.

References

BostonGlobe.com (2020). Does Partners HealthCare still need to grow? - The Boston Globe. [online] BostonGlobe.com. Available at: https://www.bostonglobe.com/opinion/editorials/2019/02/01/does-partners-healthcare-still-need-grow/pChJMd1io16taA2dnsnOzI/story.html [Accessed 21 Jan. 2020].

Dobbs, M.E., 2014. Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review.

Fiercehealthcare.com (2020). Partners HealthCare announces rebrand along with 5-year strategic plan. [online] FierceHealthcare. Available at: https://www.fiercehealthcare.com/hospitals-health-systems/partners-healthcare-announces-rebrand-along-5-year-strategic-plan [Accessed 21 Jan. 2020].

Guerin-Calvert, M.E. and Maki, J.A., 2014. Hospital realignment: Mergers offer significant patient and community benefits. Center for Healthcare Economics and Policy.

Hutson, M.A., 2015. The urban struggle for economic, environmental and social justice: Deepening their roots. Routledge.

Mountauburnhospital.org (2020). About Us - Mount Auburn Hospital. [online] Mountauburnhospital.org. Available at: https://www.mountauburnhospital.org/about-us/ [Accessed 21 Jan. 2020].

Silva, B.M., Rodrigues, J.J., de la Torre Díez, I., López-Coronado, M. and Saleem, K., 2015. Mobile-health: A review of current state in 2015. Journal of biomedical informatics, 56, pp.265-272.

Tsai, T.C. and Jha, A.K., 2014. Hospital consolidation, competition, and quality: is bigger necessarily better?. Jama, 312(1), pp.29-30.