Health Care Sector
Brief Excerpt from Industry Overview Chapter:
Companies in this industry provide a wide range of health care and social services through hospitals, doctors' offices, nursing homes, outpatient surgery centers, and other facilities. Major companies include Ascension Health, HCA, Kaiser Permanente, and Tenet Healthcare (all based in the US), as well as Fresenius (Germany), National Hospital Organization (Japan), and Ramsay Health Care (Australia).
Health care reform efforts in the US and other developed countries are changing how providers are reimbursed for care. More attention is being focused on rewarding or penalizing institutions based on efficiency standards and the quality of care delivered. As pay-for-performance reimbursements are implemented, health companies are consolidating to better compete and negotiate with suppliers and insurers. Slim operating margins and a minimal ability to raise prices makes eliminating wasteful processes essential. Obtaining grants and federal funds is key to profitability in the case of many nonprofit health care providers.
PRODUCTS, OPERATIONS & TECHNOLOGY
Major services include hospital medical care (45% of industry revenue) and outpatient care provided by physicians (20%). Other services include dental work, urgent care, elderly and hospice care, medical labs, home health, rehabilitation, and social assistance. Leading health care entities in the US include a number of for-profit entities, an exception to the global norm of nationalized medicine. However, of the 7,000 US hospitals, around 75% are not-for-profit. Most doctor's offices and ambulatory care centers are run as for-profit enterprises.
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