CapstoneProject: Chapter 4
Universityof Miami Health System: SWOT Analysis
Universityof Miami Health System: SWOT Analysis
Healthcare organizations operating in the modern business environmentenhance their competitiveness by overcoming internal weaknesses andexternal threats that limit their ability to exploit the availableopportunities. The main source of difference between competitive andnon-competitive organizations is the ability of individual firms toovercome their own limitations and utilize their strengths to takeadvantage of the opportunities offered by the industry in which theyoperate (Puhl & Woulfe, 2012). This paper contains a SWOTanalysis of UHealth System, with a focus on internal strengths,weaknesses, external environment, and macro-environmental factorsthat affect operations of the health care facility.
InternalWeaknesses and Strengths
TheUHealth System has applied some efforts to improve the process ofquality control. The objective of this measure has been to help itsclients have an access to quality health care. For example, theorganization has a peer review program, where the services offered byone health care professional are subject to a review by anotherprovider (UHealth, 2016).
Althoughit is evident that the management has tried to enhance the quality ofservices, the poor financial performance, an increase in cases ofmedical malpractices, and data breach are indicators of poor internalcontrol systems. For example, a fall in revenue from $ 180.5 millionmade in 2014 to $ 77.2 million in 2015 indicates that theorganization is continually losing its productivity (Bandell, 2015).In addition, the information technology has helped the UHealth systemadopt an electronic health record technology, but this has increasedthe vulnerability of patient records to unauthorized access. Forexample, about 13,074 patients were affected by an incident of thedata breach that occurred in 2013 (Sinha, 2016). Similarly, clientcomplaints that result from an increase in cases of medicalmalpractices suggest that the health care system has failed to put inplace adequate internal controls to ensure that patients receiveservices that meet the required standards. Therefore, weaknesses inthe organizational control are the major challenges that the UHealthSystem has been facing. Weaknesses in other management functions(such as leading, planning, and organization) are directly orindirectly related to the issue of lack of adequate organizationalcontrol.
MichaelGittelman, who was appointed the COE of UHealth System in 2009,brought in a leadership experience of 30 years into the organization(UHealth, 2016). Stephen Altschuler, the vice president in charge ofHealth Affairs, has 15-years of working experience as a top leader inother health care organizations. The two executive leaders have beeneffective in motivating the current workforce through a comprehensivecompensation package. The ability of the organizations to remainactive and competitive since 1952 is an indication of an effectiveleadership that has been passed on from one team to another. Thecurrent CEO and the vice president have demonstrated their ability tolead the health care system in an effective way. This is confirmed bythe establishment of a strategic development plan that will enhancethe competitiveness of the organization through the development ofnew facilities and expansion of the current ones (Bandell, 2014).This demonstrates a leadership that is able to focus on the future ofthe organization. However, under the leadership of Michael Gittelmanand Stephen Altschuler, the health care system has maintained atop-down communication system that limits the ability of the juniorhealth care providers to provide useful information that could beused to reduce treatment errors (Nissim, 2016). In addition, MichaelGittelman has maintained a hierarchical leadership structure whereorders and instructions flow from the top leadership to juniormembers of staff. This limits the chances for the CEO to empower themembers of staff by collaborating with them in the process of makingdecisions.
Thefact that UHealth System has been in operation since 1952 indicatesthat it has a plan that has increased its competitiveness in thebusiness environment. Through its long-term development strategies,UHealth has been able to implement changes depending on the existingmarket trends. For an instant, the health care system adopted theelectronic health care system at a time when the ability of thehealth care organizations to compete was determined by their capacityto deliver services in the most cost effective and efficient ways(Bandell, 2014). Moreover, the strategic development plan has helpedUHealth invest in a combination of portfolios (such as education,research, and delivery of health care services) that complement eachother (UHealth System, 2016). However, there is a need to ensure thatthe strategic plans take account of potential challenges associatedwith the organization’s response to ethical and technologicalforces. For an instant, a plan to adopt a new technology should haveincluded measures for prevention of data breach.
UHealthSystem has a functional organizational design that enhancesefficiency of its operations. Its campuses and internal departmentswere established on the basis of the type of functions of each unit.For example, there are units that deal with research, education, andpatient health (UHealth, 2016). One of the key benefits of this typeof organizational structure is that UHealth has been able to make anefficient use of its human resources by helping the management tocome up with job designs that focus on specialization of eachemployee. In addition, the compensation package developed by UHealthis broad and it includes a wide range of benefits, such asretirement, education, and legal benefits (UHealth System, 2016).This package has minimized labor issues (such as employee strikes)since compensation rates are market competitive. However, theorganization has not adopted a flexible culture that can help itrespond to emerging changes. For an instant, trends indicate thatthere is an increase in demand for quality services (Jamal, McKenzie& Clark, 2010), but the UHealth has taken a long time to containthe issue of medical errors that has resulted in litigations anddamage to the firm’s reputation.
ExternalOpportunities and Threats
Threatof New Entrants
Thethreat of having new health care systems entering the industry rangesfrom low to medium. This can be attributed to the existence ofnumerous barriers, such as the high cost of establishing a new healthcare facility, low financial returns, and the shortage of qualifiedhealth care professionals (Nkomazana, Mash, Phaladze & Shaibu,2015). However, there are new nursing homes, doctor’s offices, andurgent care clinics that are being established by individual orgroups of health care practitioners. The high cost of equipment makesit difficult for emerging facilities to offer the same range andquality of services as UHealth system.
Thethreat of industry rivalry in the U.S. health care industry is quitehigh. Although there are only a few health care facilities that areentering the industry each year, the existing health care system aregrowing at a high rate. This growth is achieved through theestablishment of new campuses, branches, and the range of services.In the case of UHealth System, health care organizations that arebased in other states have been expanding by investing in Florida,which has increased the level of rivalry. For example, Mayo Clinicestablished a campus that is ranked number one in Jacksonville andfourth nationally in terms of medical specialties (Mayo Clinic,2016). The high level of rivalry can be attributed to the growth ofexisting health care organization as opposed to the emergence of newfacilities.
Thethreat of substitution of health care service and products isrelatively low in the U.S. The threat of substitution was high aboutone decade ago when many citizens sourced health care services andbought prescribed drugs from foreign markets due to the high pricesthat were charged by the local health care facilities (Puhl &Woulfe, 2012). However, this trend has changed due to theintervention made by the government agencies, especially Medicaid andMedicare, to increase the affordability of drugs and medicalservices. Moreover, the threat of formal health care services offeredby modern health care systems (such as UHealth) being replaced bytraditional types of therapy is quite minimal.
Suppliersoperating in the health care sector have a medium bargaining power.The strength of the bargaining power is attributed to the fact thateach American will seek or health care services at least once peryear (Puhl & Woulfe, 2012). This implies that suppliers ofproducts (such as drugs) will always have a ready market for theirproducts. Additionally, the number of suppliers of quality andup-to-date drugs and medical equipments are fewer than the number ofhealth care facilities that need them. This has given suppliers anopportunity to dictate prices for their supplies.
Thebargaining power of customers in the health care industry is low. Theindustry has a large number of customers compared to the number ofhealth care facilities. The decision of a single customer cannotinfluence the price of services offered by health care facilities,such as UHealth (Puhl & Woulfe, 2012). The increase in the numberof buyers (patients) has resulted from the large number of emerginghealth conditions and the population aging. Older people are morevulnerable to diseases, which imply that the large number seniorshave increased the number of buyers for organizations operating inthe health care sector.
Thereare numerous global forces that impact the health care sector, butthree of them affect health care facilities in a more significantway. The first force is the increase in the cost of delivering care,which can be attributed to the high rate of inflation and cost ofadopting new technology (Puhl & Woulfe, 2012). Secondly, thereis an increase in the need for cooperation and partnerships amongorganizations. This creates an opportunity for the Americanorganizations (such as UHealth) to invest in the global market bypartnering with organizations in foreign countries (Jamal, McKenzie &Clark, 2010). However, foreign health care organizations are equallylikely to invest in American and compete with the local health carefacilities. Third, there is an increase in demand for qualityservices as customers continue gaining access to information abouttheir right to excellent services.
Demographicfactors affect the health care sector by either increasing ordecreasing the number of buyers. There are two major demographicfactors that impact the health care industry. First, an increase inthe population of the U.S. has resulted in a significant growth inthe number of patients. An increase in the number of clients hasallowed health care facilities to set prices since there is no singlecustomer who can influence the market. Secondly, population aging isa demographic trend that affects the health care sector directly. Bythe year 2014, about 46.2 million (14. 5 % of the nationalpopulation) Americans were at least 65 years old (Administration forCommunity Living, 2015). The population of older adults ischaracterized by chronic disease, which implies that the populationaging has increased the number of clients for the health carefacilities. Most of the demographic trends will benefit the UHealthsystem by increasing the number of customers.
Politicalas well as Legal Forces
Playersin the health care sector have been pressured by the need to complywith ethical standards. This trend has resulted from the customer’sability to access information about their rights and an increase inpressure from consumer protection agencies (Jamal, McKenzie &Clark, 2010). This is confirmed by the large number of lawsuitsbrought against health care facilities that fail to observe ethics intheir operations. Trends also suggest that new laws are continuallygiving customers more power to control their health. For example, thePatient’s Bill of Rights introduced under the Affordable Care Actenhanced the stability and flexibility of Americans in order to helpthem make informed choices, which means that the health carefacilities (such as UHealth) will have to take the patient’sopinion into account when delivering health care (U.S. Department ofHealth and Human Services, 2016). Although an increase in demand forlegal as well as ethical compliance might require additionalresources, it presents a new opportunity for the health carefacilities to create niches and enhance their competitive advantage.
TechnologyForces and Change
Theadoption of technology in the health care industry is inevitable.Technology is associated with a significant increase in the level ofefficiency, quality of care, and decline in the cost of servicedelivery (Jamal, McKenzie & Clark, 2010). Additionally,technology has allowed the health care organizations to reach morecustomers online, which is an opportunity to expand the market share.Therefore, health care facilities should consider technology as anopportunity to enhance their competitiveness by adopting the latestand the most efficient technology. However, the a failure on the partof the health care organizations can be an investment risk since itmay fail to bring the desired results.
Thehigh rate of immigration has resulted in a diverse society that ischaracterized by patients who come from different cultural and socialbackgrounds (American Association of Colleges of Nursing, 2015).Immigration is an opportunity for the health care organizations,since immigrants increase the number of customers. However, theycreate the need for employment of translators In addition, a largenumber of them lack adequate resources to pay for health careservices.
Evaluationof SWOT Analysis
UHealthSystem has among the oldest and the most establish health caresystems in South Florida, but there are several factors that arelikely to limit its capacity to deliver quality care. The lack ofinternal controls that could help the health care organizationincrease productivity of its assets, prevent data breaches, andmedical malpractices. These challenges have been attributed tounreasonable management practices. UHealth needs to adjust itscurrent organizational structure in order to enhance flexibility thatwill allow health care providers to interact with the top management.This will help the management understand factors that havecontributed to an increase in medical malpractices. Moreover, UHealthneeds to adopt internal controls that will ensure that patient datais protected. These measures will enhance the competitive advantageof the health care system since it will be able to adopt the newtechnology without suffering from its negative impacts.
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