Reference no: EM132231180
Porter's strategies
I work for a home healthcare agency. The name of the company is LHC Group.They are in partnership with Erlanger ,a local hospital.We address medical needs of patients in the home setting.
Competitive Rivalry
Hospitals are the immediate threat. They offer on site x-ray, physical and occupational therapy, on call chaplain, registered dietitian, full medical staffing etc. We have at least 7 local hospitals in our city. Within the home setting, all you have is the nurse and on call respiratory personnel. Other rivals include: clinic, nursing homes, assisted living facilities, other home healthcare agencies,etc.The most intense element is providing staff coverage for the clients. This is an internal issue of pay scale, benefits and incentives provided to the staff. The medical staff tend to go towards the company that offers the best pay rates.
Supplier power
The more intense the needs of the patient is the more you can charge for services that are provided.The patient and the needs of the family are very important, but working in the home comes with certain challenges that may be address through DHS system. This positioning gives the power back to the supplier, when the patient and family members know they will be reported to a higher power for irrational behavior. We have 10 or more local home care agencies and several agencies within our surrounding areas. Our company is unique because we care about our clients, highly trained and focus on how to best address our clients needs and wants. The cost for this service is the same across the board. Governmental rules and regulations and insurance coverage regulate the pay scales of medical needs within the home. So, the cost to change to another agency is mostly seen in terms of time management purposes.
Buyer Power
As the old saying goes, a nurse will always have a job, due to there will always be sick people around. The buyer power is mostly seen in private pay situations or the elite and rich. They can negotiate payments.The government regulates payments within Medicaid and Medicare, and private insurance coverage has set pricing for coverage issues. I think the rival is seen within the private insurance companies sectors. Some offer different pricing for coverage verses other companies. The going insurance coverage at a local school institution is a $5000 dollar deduction and only paying 80% of hospital coverage and certain exam such as colonoscopies and breast exams are not included in your coverage. This is considered a high option coverage, and think other companies do offer better options.
Within the hospital setting, upon discharging into another facility, competition does exist, if client needs further medical assistance when they leave the hospital. Rehabilitation, home care agencies and nursing homes compete for these types of temporary medical needs adjustments.
Threat of substitutions
Some clients go home and take care of their own medical needs. Friends and family assist with medical needs of clients also. A lot of medical personnel will work private duty jobs, which will cut into organizations profit margins also.
Threat of new entry
Opening a new entry company into this market comes at a price. You cannot enter industry without substantial investments and resources. Their are entry barriers such as licence applications and fees, equipment and location issues, meeting federal rules and regulations, laws, etc. There is a lot of strategic planning that must be done before entering into this market area. Political and economic views also can cause a negative effect on entry into the industry. I have seen local home care agencies close due to non-payment from insurance companies. I have also seen 24 hour coverage cut to 16 hour coverage or 7 day a week coverage cut to 5 days a week coverage. New entry companies beware of these issues and more.