HCM-FPX5312_MusiKeti_Assessment 2-1
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Assessment 2: Using Market Data to Understand the Healthcare Environment
Keti Musi
HCM-FPX5312: Analyzing the Health Care Environment
Prof. Nowill
Capella University
September 12, 2021
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PESTEL Analysis Continued
NewYork-Presbyterian (NYP) has identified merger and acquisition (M&A) as the one
specific strategic initiative to improve patient outcomes and financial sustainability and
resiliency outcomes. As we continue to analyze the external factors affecting NYP’s goal of
maintaining a competitive advantage (i.e., provide great patient care, maximize value for
patients, and make its financial outcomes more sustainable) in a highly competitive healthcare
environment; it is important to identify the core participants and stakeholders in the healthcare
system and how they play an important part in identifying and resolving several of the challenges
facing the organization in achieving its goal.
In the healthcare system, the customers are the patients seeking care. The patients seeking
medical care is spread out over various disciplines of care; including but not limited to
emergency care, inpatient care, routine medical care, surgery, and research participants. This
makes the customer/patient care population very complex as they all seek different level of care
and have different goals to care achievements. Often the external supply chains must be decided
based on the patient population served. The supply chain generally refers to the resources needed
to deliver goods or services to a consumer. Healthcare (internal and external) supply chain
management involves obtaining resources, managing supplies, and delivering goods and services
to providers and patients. In healthcare supply chains, the principal participants include payers
(e.g., government agencies and regulators, employers, or any other individuals), fiscal
intermediaries (e.g., insurance companies, health maintenance organizations, pharmacy benefit
managers), providers (e.g., hospitals, divisions, physicians, and facilities such as physician
offices, medical and ambulatory surgical centers and pharmacies), purchasers (e.g., resellers such
as pharmaceutical wholesalers, medical surgical distributors, product representatives,
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independent contracted distributors, group purchasing organizations) and manufacturers (e.g.,
drugs, medical device/equipment, hospital medical supplies, providers of information technology
services and manufacturer of capital equipment) (Burns & Lee, 2008). The goal of the supply
chain is to deliver materials (i.e., physical goods) and information about medical products and
services in order for patients to receive quality care. An effective supply chain brings in the right
materials and information at the right time, with the right quantities, to the right place. This can
have a direct, positive impact on patient care by reducing risk and errors, eliminating operating
room waits and cancellations, and reducing the length-of-stay (Singh, 2006). For example, the
external supply chain for NewYork-Presbyterian’s clinic locations that provide outpatient clinic
and routine appointments is different from the locations where higher level of care such as
emergency care and intensive care is provided at the hospital locations such as hospital beds,
advanced medical equipment like respiratory ventilators supply is different from the medical
office supply chain such as minor procedure equipment that can be provided at the clinic levels.
On the other hand, the external world especially the socioeconomic status of the
population served by the medical facilities can greatly impact the revenue models of the
organization. We can see the effect of that directly related to the location of the facilities as it can
represent the economic status of the communities served by the facility and have a direct impact
on the revenue stream for that medical center. For example, the location in a low socioeconomic
status will be serving a lot of Medicaid and patients receiving government assistance, which
means the billing for the services will be directly to these programs; and regulatory restrictions
will be observed as these programs can be strict when it comes to financial reimbursements and
rewards to the medical facilities. On the other hand, the facilities located at a high socioeconomic
community will be serving patient
with private payers or direct contracts with NewYork-
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Presbyterian through the employers such as big corporations. This also directly affect the
revenue stream for such facilities.
In the healthcare industry, competition (and external world uncontrolled factor) among
organizations has long been encouraged as a mechanism to increase value, quality and
convivence of healthcare for patients, and reduce healthcare costs (Thomson, 1994). NewYork-
Presbyterian faces a lot of competition from several healthcare systems including Mayo Clinic,
Northwell Health, Mount Sinai, Cleveland Clinic, Memorial Sloan Kettering Cancer Center, St.
Joseph’s Health, NYU Langone Hospital, and Montefiore. In order to remain competitive
healthcare systems have pursued two paths:
(1) expansion through mergers with other systems
and acquisition of satellite campuses in the service of achieving administrative efficiency,
increasing bargaining power, diversifying revenue and, crucially, gaining the ability to act as
their own insurers, and (2) making strategic investments and focused on ambulatory care and
their traditional role as teaching hospitals (they steer well clear of the insurance business).
In order defend against competition and to improve their market positions relative,
healthcare organizations form strategic partnerships or alliances. Strategic partnerships or
alliances offer Healthcare organizations, like New York-Presbyterian, opportunities to expand
their network, access and leverage expanded benefits of scale, access essential industry
resources, offer excellent value for consumers as they shop for health care services, expand
access to advanced medical care to improve patient outcomes, streamline processes, reduce
costs, lead to innovation, and improve patient care (McCue et al., 1999). The type of external
partnerships are (1) healthcare networks, (2) local businesses, (3) physician practices, (4)
rehabilitation services, (5) laboratories, (6) nursing facilities, (7) pharmacies and (8) accountable
care organization (ACO).
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There are many stakeholders that influence the processes and outcomes that occur in
hospitals. Stakeholders are “…a person, group, or organization that has interest or concern in an
organization” (Stakeholder, 2018). Healthcare organizations have both internal and external
stakeholders, with both having unique but equal influence (Coombs & Holladay, 2012).
However, internal and external stakeholders can also be affected by the hospital in very different
ways. If a hospital opens a new specialty that is not done in other facilities regionally, internal
stakeholders may be impacted negatively in ways such as involuntary staff relocation or
reassignment, overcrowded working areas, and decreased parking spots available due to the
influx of patients. Conversely, patients (who are external stakeholders) will experience the
positive impacts of availability of a new service located close to home. Internal stakeholders are
those who (1) operate within the hospital, (2) know the innermost workings of the organization
which puts them in a unique position to offer insight and expertise, and (3) participate in the
strategic development of coordinating resources to fund and sustain an operation. An example of
internal stakeholders would be hospital employees, managers, medical staff, the board of
directors, and investors. External stakeholders are those individuals who (1) are not employed by
the hospital but are impacted by or impact the organization’s performance and (2) influence the
organization by driving service line decisions, which often effects the bottom line. Examples
external hospital stakeholders would be those who provide inputs (suppliers like insurance,
pharmaceutical, medical equipment, office and hotel product and service companies) and those
who rely on hospital outputs (patients), competitors, regulators, special interest groups, and
creditors (Wilston, 2019).
Laws and regulations are key levers for governments to affect the quantity, quality, safety,
and distribution of services in health systems. Therefore, healthcare organizations face more
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regulation than just about every other industry in the United States. They are subject to
inspection, review, reporting requirements, and enforcement actions by many state and federal
agencies, and they must follow numerous local, state, and federal regulations. The relevant laws
and regulations impact New York-Presbyterian’s healthcare system are (1) Affordable Care Act
(ACA), (2) Health Insurance Portability and Accountability Act (HIPAA), (3) Health Information
Technology for Economic and Clinical Health (HITECH) Act, (4) Medical Treatment and Labor
Act (EMTALA), (5) Anti-Kickback Statute (AKBS), (6) Patient Safety and Quality Improvement
Act (PSQIA), (7) Fraud and Abuse Laws, and (8) Medicare Access & CHIP (Children’s Health
Insurance Program) Reauthorization Act.
Market Data Analysis
Most healthcare organizations have some type of merger, acquisition, partnership,
affiliation, or joint venture (JV) in its strategy in response to an ever-shifting, increasingly
competitive market (Bazzoli et al., 2004). These represent a continuum of approaches to
collaboration among health care organizations, ranging from those that change the legal status of
organizations (e.g., mergers and acquisitions) to those that involve the pooling of only limited
resources among partners (e.g., joint ventures) to those that are less formal and involve
commitments of fewer resources than either mergers or joint ventures (e.g., alliances) (Zajac et
al., 2010). Healthcare mergers and acquisitions (M&As) continue to rise. The scope and scale of
M&A activity is changing as healthcare organizations seek to align for growth and access, and
position for new competitive value-based markets.
The healthcare market data that will be needed to examine the challenges or opportunities
related to NewYork-Presbyterian’s strategic initiative of M&A to improve patient outcomes and
financial sustainability and resiliency outcomes are (1) trend of merger, acquisition, partnership,
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affiliation, or joint venture activity in the healthcare sector (ex. insurers, pharma and biotech,
providers, and vendors), (2) forecast of merger, acquisition, partnership, affiliation, or joint
venture activity in the healthcare sector (ex. insurers, pharma and biotech, providers, and
vendors), (3) trend and forecast in horizontal vs vertical M&As, (4) the common issues in
healthcare M&As, and (5) the effects of hospital M&As on costs and quality of care. The data
will come from a variety of sources including Kaufman Hall, Hammond Hanlon Camp LLC,
S&P Global Market Intelligence, Global Healthcare Advisors, EY, Modern Healthcare, and
American Hospital Association (AHA) Annual Survey.
Data integration is a combination of technical and business processes used to combine
data from disparate sources into meaningful and valuable information (Giannakos et al., 2019).
There is no universal approach to data integration. Data integration isn’t a one-size-fits-all
solution; the right formula can vary based on numerous business needs. Data integration methods
can be broadly categorized into three types: (1) manual (labor intensive), (2) automated (APIs),
and (3) engineered (custom APIs) (Giannakos et al., 2019). The approach that I would use to
integrate data from multiple sources (from differing perspectives, across various disciplines,
stored in different formats and varying levels of structure) is engineered (using APIs to
automatically create dataflows and enable integration). The data extracted from the sources
would be consolidated into a single, cohesive data set (located into a centralized system like a
data warehouse or data lake) — which is the foundation to produce effective, actionable business
intelligence.
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References
Bazzoli GJ, Dynan L, Burns LR, Yap C. Two decades of organizational change in health care:
What have we learned. Medical Care Research and Review. 2004;61(3):247–331.
Retrieved from
https://pubmed.ncbi.nlm.nih.gov/15358969/
Burns, L. R., & Lee, J. (2008). Hospital purchasing alliances: Utilization, service, and
performance. Health Care Management Review, 33(3), 203–215. Retrieved from
https://pubmed.ncbi.nlm.nih.gov/18580300/
Coombs, W. T., & Holladay, S. J. (2012). Managing corporate social responsibility: A
communication approach. Malden, MA: Wiley-Blackwell. Retrieved from
https://www.academia.edu/33527082/The_Handbook_of_Crisis_Communication
Giannakos, M. N., Sharma, K., Pappas, I. O., Kostakos, V., & Velloso, E. (2019). Multimodal
data as a means to understand the learning experience. International Journal of
Information Management, 48, 108–119. Retrieved from
https://doi.org/10.1016/j.ijinfomgt.2019.02.003
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McCue, M.J., Clement, J.P., Luke, R.D. (1999). ‘‘Strategic Hospital Alliances: Do the Type and
Market Structure of Strategic Hospital Alliances Matter?’’ MedicalCare 37 (10): 1013–
22. Retrieved from
https://faculty.wharton.upenn.edu/wp-
content/uploads/2014/09/20_Managed_Care_and_Hospital_Consolidation.pdf
Singh, M. (2006). Transforming the Global Health Care Supply Chain. [online] MIT-CTL
Healthcare Supply Chain Initiative, MIT Center for Transportation and Logistics.
Retrieved from
http://ctltest1.mit.edu/sites/default/files/library/public/report_TransformingHealthCareSu
pplyChain_singh.pdf
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Stakeholders in hospitals. (n.d.). Stakeholders. Retrieved from
https://www.stakeholdermap.com/stakeholders-in-hospitals.html
Thomson, R.B. (1994). Competition Among Hospitals in the United States. Health Policy, 1994
Mar.; 27(3): 205-31. Retrieved from
https://pubmed.ncbi.nlm.nih.gov/10134580/
Wilston, N. (2019, July 17). An Overview of Key Sectors of Healthcare Industry [Web log post].
Retrieved from
https://medium.com/@neil.wilston123/an-overview-of-key-sectors-
ofhealthcare-industry-d507823da03f
Zajac E., D'Aunno T., Burns L.R. (2010). Health care management: Organization design and
behavior. 6th. Albany, NY: Delmar (Managing strategic alliances). Retrieved from
https://www.ncbi.nlm.nih.gov/books/NBK241297/
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