SWOT And Competitive Analysis Of Private Hospitals In Australia

Background

Question:

Discuss about the Review of Cybertherapy and Telemedicine.

The privately operated and owned hospitals charge patient fees for services and accommodation like- day care, psychiatric and acute care, In Australia, there are around 573 private hospitals equate to 41% of the total hospital care system provided in Australia (Abs.gov.au., 2017). Although private and public hospitals are offering the identical core products but the way the products and services are delivered is very different.  According to Australian Bureau of Statistics (2013), the private health care sector allows the generation of 140 billion dollars each year in the Australian economy, as well as, supports 3, 03,000 employees working for the hospitals. The main purpose of this report is to evaluate the marketing strategies used by the hospital in the last few years through SWOT analysis and Competitive Analysis of the industry environment. In addition to it, the recent trend followed by the industry and ethical issues faced within the industry is also discussed.

Private sector hospitals are recently undergoing significant structural changes (Barr, 2014). As per Australian Private Hospitals Association, (2016), private healthcare sectors are now performing complex techniques, relevance for day surgery is increasing, hospital’s relationship with different types of health funds are significantly changing. Co-located private and public sector hospitals are recently becoming more popular (Brown & Barnett, 2014).

Table I:  Growth over the last 10 years in Private Sector Hospitals

Source: (Abs.gov.au., 2017)

The private hospitals make business by efficient delivery of services to its patients. Nowadays, doctors generate more demand in the interest of the patients and major part of the treatment bill is paid from the health funds on behalf of the contributors. In Australia, private hospitals are competing with the public sector hospitals by providing free treatment to the public patients. In the recent times, key changes in the  healthcare industry structure has mainly occurred for the profit-sectors, like the Ramsay acquisition for its benchmark group of  private hospitals, as per Australian Private Hospitals Association, (2016). The number of private beds has been increased that has strengthened Ramsay’s market coverage and by further making ten hospitals in South and Victoria.

As per profit, the largest market share is owned by Affinity, which has 5360 beds (42%) followed by Ramsay Healthcare with 3680 beds (29%). The fortune of private hospital depends mostly on the capability to engage the reputed professionals or doctors, thereby securing its  contracts in the funds available for health. Moreover, around 30% of the patients already decide the hospitals in which they are going to be treated according to Australian Institute of Health and Welfare, (2013). Thus, private sector hospitals can compete through marketing their facilities, range of procedures and services, location that is accessible for the patients and visitors, reputation or prestige and contracts with health funds. The competition between the private hospitals for its patients is quiet dissimilar then the way the hospitals are competing for doctors. The private healthcares often require informing the potential patients about the services and facilities provided by them (Brown & Barnett, 2014). In few cases, this involves advertising it in the media.

Private Hospitals in Australia

During 2012-2014, in Australia around 15 % of the insured patients were  received their medical treatment or facilities in public sector hospitals as per Australian Private Hospitals Association, (2016). Both the public and private healthcare industries operate its functions in market conditions, which are unalike. The public healthcare industry focus is on treating the seriously and acutely ill patients with  severe chronic conditions or ailments. Many public healthcare organizations are now providing treatments, facilities and services, which were earlier only available at great private hospitals (Wiederhold, 2013). Therefore, the insured patients with any kind of aliments and the  representative doctors will always have alternative to choose the best private sector hospitals.

The private sector hospitals that are controlled by the charitable and religious institutions provide an alternative solution to the Australian patients by giving them private hospitals services (Canta & Leroux, 2016). During 2008-09, the religious or charitable institutes providing hospitals services accounted for total 37%  of the beds available in psychiatric and acute private hospitals as per Australian Institute of Health and Welfare, (2013). In the non-profit sector, Sister of Charity holds maximum market share, which is 30%, with 2586 beds.

An organization must consider its strengths, weaknesses, opportunities and threats for re-evaluation of procedures or planning any vital campaigns (Moschis & Bellenger, 2013). In order to understand the factors the recent opportunities and challenges facing the private healthcare segment SWOT analysis is done. The SWOT analysis discussed in Table II is the most efficient way for visualizing the factors influencing the internal and external environments of the private hospitals

Table II: SWOT Analysis of Private Hospitals

By growing consolidation as well as rationalisation, the healthcare profit segment industry works in oligopoly market condition. The major organisation owning 92% of the profit shares in private hospital sectors (Abs.gov.au., 2017). In the private healthcare segment, each hospital or organisation has its unique and identical positioning in the key markets as well as classified and referring network of doctors. This further put a limitation to the competition rivalry going on between the organizations in the industry as per Australian Private Hospitals Association, (2016).  Moreover, increase in the number of senior citizen in Australia, the awareness for the want of qualitative health care and need for the health related services will grow rapidly in the near future

Through PESTEL analysis, the external environmental factors that influence the operating conditions of the private sector hospitals in Australia can be determined.

Recent Changes in Private Hospitals

In the healthcare sector providing the patient with good care and avoiding any harm to the patient mentally and physically are the major cornerstones of ethical practices (McGorry, Bates & Birchwood, 2013). The ethical issues that are faced by the industries are as follows:

The hospitals must have certain ethical guidelines to avoid any conflicts of Interest by governing the behaviours of their professionals (Canta & Leroux, 2016). The hospital management team also scrutinizes whether their board of directors and trustees should be allowed or not to maintain the financial ties with the health system or institution by selling its own goods and services.

These are the patient having less decision-making capacity about their medical condition. The responsibility for making the decision and choosing the best treatment option falls on their legally authorised representatives (Wiederhold, 2013). The rational decision for the patient’s best interest or known preferences is to be made by them.

It is vital for a healthcare organization to support efficient care of the patients by providing ethically sound policy, fair and clear processes (Ducket & Willcox, 2015). Furthermore, ongoing ethics education should be provided at all levels for patient care. Proper access to clinical ethics consultation services should be there so that the patient can consult with the clinicians on critical cases.

Ethics consultants or committee members need to be well aware of the hospital’s policies as well as have additional ethical trainings. They should be available to assist the patients, families and the employees (Hartung et al., 2015). They should resolve any perceived conflict if arises between the parties. The clinicians can tackle most of the problems by blending support mechanism and formal ethical policy (Knani, 2014). The hospitals should avoid any kinds of conflicts by properly governing the behaviour of the professionals and employees within the organisation.

Conclusion:

Thus, it can be concluded that the  healthcare Industry of Australia is a booming Industry. Over the past few decades, the healthcare industries, which focus is to help others has gradually become entrenched as the country’s biggest employer. The healthcare facilities in Australia are largely provided by the government or private operated hospitals and private medical practitioners. The cost of the medical services are generally paid by the government agencies or private insurance, and the balance amount is payable by the patient itself. Medicare is the universal health care approach followed in Australia. This primary health system subsidises most of the medical costs for all permanent residents or citizens of Australia. The private hospitals involvement in the healthcare sector is provided in variety of forms that even includes the delivery of services to few of the public patients 70% of Australians who are admitted  for rehabilitations are mostly treated in  private hospitals.

Competition in Private Hospitals

Reference List:

Abs.gov.au. (2017). 4390.0 – Private Hospitals, Australia, 2015-16. [online] Available at: https://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/4390.0~2015-16~Main%20Features~All%20Private%20Hospitals%20-%20summary~2 [Accessed 22 Nov. 2017].

Australian Bureau of Statistics, 2013. Buderim. [Online] Available at: https://censusdata.abs.gov.au/census_services/getproduct/census/2011/quickstat/SSC30254?opendocu ment&navpos=220 [Accessed 22 Nov 2017].

Australian Federal Government, 2016. Federal Budget 2016-2017: Part 2 Expense Measures. [Online] Available at: https://budget.gov.au/2016-17/content/bp2/html/bp2_expense-15.htm [Accessed 22 Nov 2017].

Australian Institute of Health and Welfare, 2013. Australian Health Statistics: 2012-2013, Canberra: Australian Institute of Health and Welfare. Australian Institute of Health and Welfare, 2016. National Health Priority Areas. [Online] Available at: https://www.aihw.gov.au/national-health-priority-areas/ [Accessed 22 Nov 2017].

Australian Private Hospitals Association, 2016. Major parties commit to improving private health insurance for Australians. [Online] Available at: https://www.apha.org.au/wp-content/uploads/2016/06/Major-parties-commit-toimproving-private-health-insurance-for-Australians.pdf [Accessed 22 Nov 2017].

Barr, P., 2014. A Chronic Problem: Hospitals and Health Networks. [Online] Available at: https://www.hhnmag.com/articles/5227-a-chronic-problem [Accessed 22 Nov. 2017]. 17

Brown, L. & Barnett, J., 2014. Is the corporate transformation of hospitals creating a new hybrid health care space? A case study of the impact of co-location of public and private hospitals in Australia. Social Science and Medicine, 58(2), pp. 427-444.

Canta, C. &Leroux, M., 2016. Public and Private Hospitals, Congestion, and Redistribution. Journal of Public Economic Theory, 18(1), pp. 42-66. Consumers Health Forum of Australia, 2016. Health fund profits up while their members lose out – time for change. [Online] Available at: https://chf.org.au/media-releases/health-fund-profits-while-their-members-lose-out-timechange [Accessed 22 Nov. 2017].

Duckett, S., &Willcox, S. (2015). The Australian health care system (No. Ed. 5). Oxford University Press.

Hartung, D. M., Bourdette, D. N., Ahmed, S. M., &Whitham, R. H. (2015). The cost of multiple sclerosis drugs in the US and the pharmaceutical industry Too big to fail?. Neurology, 84(21), 2185-2192.

Knani, M. (2014). Ethics in the hospitality industry: Review and research agenda. International Journal of Business and Management, 9(3), 1.

McGorry, P., Bates, T., & Birchwood, M. (2013). Designing youth mental health services for the 21st century: examples from Australia, Ireland and the UK. The British Journal of Psychiatry, 202(s54), s30-s35.

Moschis, G. &Bellenger, D., 2013. What Influences the Mature Consumer?. Marketing Health Services, 23(4), pp. 16-21.

Ng, K. B., Leung, G. K., Johnston, J. M., & Cowling, B. J. (2013). Factors affecting implementation of accreditation programmes and the impact of the accreditation process on quality improvement in hospitals: a SWOT analysis. Hong Kong Medical Journal.

Wiederhold, B., 2013. Annual Review of Cybertherapy and Telemedicine 2013 Positive Technology and Health Engagement for Healthy Living and Active Ageing. 1 ed. Washington D.C: Burke : IOS Press.Nov.2017]

Willis, E., Reynolds, L., &Keleher, H. (Eds.). (2016). Understanding the Australian health care system. Elsevier Health Sciences.

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