Case study: "Hospital Corporation of America" by Kester, W. Carl

1704 Words Feb 11th, 2007 7 Pages
TABLE OF CONTENTS

I.Introduction1

II.Key Issues2

III.Recommendations6

IV.References7

I.Introduction

Hospital Corporation of America (HCA) is propriety, hospital management company founded in Nashville, Tennessee in 1968 with only one, 150-bed hospital and then grew to become the nation's largest hospital management company. As of 1981, HCA owned or managed 349 hospitals in the United States and overseas.

During the 1970s, HCA achieved its growth by acquisition of existing hospitals and construction of new ones. During the period of 1968-1981, it constructed 70 new and replacement facilities and acquired or leased the remaining 279 of its hospital. Each year HCA evaluated many potential acquisitions and areas for construction, with
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In addition, as HCA continues into the future with the consumers more cost conscious about the healthcare provider that they choose, it will also affect them.

Under such circumstances, HCA should continue its strategy as aggressive as possible with their existing strategy of acquisitions and new construction likes "to strike while the iron is hot". To build their base in areas that do not currently have a hospital or only have one will help to ensure that HCA has a strong user base that does not have to look for the cheapest hospital in the area, as there is no other choice for the customers. In parallel with continuing growth, HCA should introduce efficient program to make their existing hospitals to reduce costs, and increase bed occupancy rates. This increased profitability will serve more effectively for HCA once the regulatory change in adverse fashion than present. And while regulatory change is still a prediction, and the profitability is not of utmost importance in HCA's strategy, they still have enough time to consider it.

HCA relies heavily on finance to continue its current growth, but in the future that reliance will most likely decrease. Regulatory conditions are expected to affect the way in which HCA and other proprietary hospital management corporations operate, so growth will be less of a major factor in the profitability of HCA.
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