The healthcare sector notes an influx in competitive factors. Various providers adopt new means of providing for the patient’s and community’s needs. They attempt to outdo one another in a variety of aspects; this occurs in a bid to attract more customers, while at the same time acquiring benefits. According to the Health Foundation (2011), competition is a means to an improvement of clinical outcomes, efficient systems functioning, and cost reduction.
Forms of competition
There are various forms of competition in the healthcare sector. Among these is the competition between pharmaceutical companies. The industry has a complex structure of payment and decision-making. There are price competitions in relation to branded drugs; the companies compete on the price paid by the insurers and patients. The competition also arises in the case of generic drugs; the prices increase with the increase in the number of competitors (Guha et al. 2008).
There is competition between physicians and hospitals. Though the two have a naturally symbiotic relationship, market forces and technological advancement weaken this relationship (Appling, 2013). Now, physicians can work in ambulatory centers and other places away from the hospitals. Many physicians leave the hospitals and venture into personal healthcare provision. It is financially effective for physicians; it, however, results in lowered revenue for hospitals.
Health insurance plans operate in a competitive market; this results in health plan competition. An increase in competition between insurance companies results in innovative product options; this depends on the health needs and cost of cover. Various hospitals compete in the provision of quality services at affordable rates. They come up with treatment strategies and services aimed at customer satisfaction. They improve the quality of services in the process. Private medical facilities suffer most; this is because of the lowered costs in public healthcare facilities.
Advantages
The competitive process provides patients with a better opportunity to select desired providers; a comparison in the quality of their services results in a competitive spirit. The improved patient choice caters for a wide variety of needs; the patients choose services with regard to their health complications, financial ability and other factors (American Medical Association, 2013). Increased options for patients increases their satisfaction. The community’s health status improves and in turn improves the quality of life. The society benefits from the reduced cost of services.
Competition increases clinical outcomes. Providers realize the needs for improved products and services in an attempt to satisfy their patients. They improves practices in handling various ailments and conditions; this improves the outcomes of medical procedures. The healthcare providers come up with innovative ways of service provision; this increases flexibility in the capacity and supply. The efficiency and productivity of organizations results in customer satisfaction and profits. The competitiveness makes the providers focus on innovative ideas; these aim at the improvement of patient care. The system functions better through a focus on patient-centered care.
Challenges
Certain challenges associate with the competitiveness in the healthcare field. First and foremost, markets for various health services are monopolies; such dominating factors in the market can drive down the quality of services and products.
Excessive competition leads to the loss of focus on the role of healthcare providers. The competitors focus on profits and market success; the need to cater for patient care becomes less important. Conflicts and fragments are likely to occur in the market; providers see each other as adversaries and this makes collaboration difficult (Health Foundation, 2011).
Competition may result in the duplication of services and products. They manufacture various versions of products for similar purposes; this results in an excess of capacity. Competition between professionals and hospitals result resistance from the staff and other stakeholders.
Essence of successful competition
In order to maximize the benefits of competition in the sector, certain systems prove important. These systems improve and ensure competition occurs in a healthy manner. Adequate data systems should be incorporates; these monitor the quality of performance. The parties identify and work on challenges that affect their ability in comparison to other.
The patients should acquire adequate information. When deciding on the health provider to cater for his/her needs, the patient should receive enough information on the providers. This facilitates informed choices; it promotes equality and fairness in the providers’ chances. There should be several healthcare providers. A wide range of providers increases competition; this heightens their efforts in catering for needs thus, an improvement in the quality of services (American Medical Association, 2013).
Providers should have appropriate management structures. Healthy competition relies on the providers’ ability to compete fairly and manage their activities. They should employ effective financial and monitoring techniques.
An alternative to the competition between healthcare providers is the formation of mergers. Through the combination and coordination of activities of various providers, they produce more and quality products and services. This eliminates challenges associated with competition.
Competitive intelligence
The providers monitor the competitive environment. Competitive intelligence involves the ethical and systematic program of; collection, analysis and management of information. Hospitals employ it through a research on various aspects including; interview of physicians, provider organizations, competitors, and solution partners. They analyze positioning strategies and pricing of competing vendors (New Growth Consulting Inc. 2013).
It has advantages including; helping healthcare organizations in identifying and countering threats. It guides in the discovery of new opportunities; this reduces and eliminates surprises related to products and services. This information can affect the provider’s decisions, plans and operations. It enables effective decision–making; this translates into progress, profit and customer satisfaction. It also enhances the organization’s advantage over competitors.
Reference
American Medical Association (2013). Competing in the Marketplace: How physicians can improve quality and increase their value in the health care market through medical practice integration (2nd ed.), Retrieved July 23, 2013, from http://www.ama- assn.org/resources/doc/psa/competing-in-market.pdf
Appling, B. (2013). Physicians, Hospitals: Competition or Collaborative? Memphis Medical News, Retrieved July 23, 2013, from http://www.memphis.medicalnewsinc.com/news.php?viewStory=1167
Guha, R., Lacy, A. M. and Woodhouse, S. (2008). Analyzing Competition in the Pharmaceutical Industry. Economic Committee Newsletter, Vol. 8(1), Retrieved July 23, 2013, from http://www.cornerstone.com/files/Publication/c55edd52-ce7a-4bde-891b-9bd1e-891b- 9bd1e7c40b95/Presentation/PublicationAttachment/43ec6d
Health Foundation (2011). Report: Competition in Healthcare. The Health Foundation Inspiring Improvement, Retrieved July 23, 2013 from http://www.health.org.uk/public/cms/75/76/313/2602/competition%20in%20healthcare.p df?realName=WTuatlr.pdf
New Growth Consulting Inc. (2013). Competitive Intelligence for Healthcare Markets, Retrieved July 23, 2013 from http://www.newgrowthconsulting.com/healthcare_it/healthcare_competitive_intelligence. html
