Case Analysis for Community Health Systems Inc

1 January 2017

Community Health’s System is committed to “building a network of thriving hospitals vital to the residents and economic development of the communities served. ” They go on to say that they have assisted community hospitals with problems and challenges they typically face such as a lack of capital, difficulty hiring physicians, and retaining management with a high amount of experience and expertise. In addition, they have a slogan that further enforces their mission: “Promises made.

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Promises Kept. ” II. SWOT Analysis A. Strengths: •Provides a detailed statement of beliefs for how employees should approach their work with patient satisfaction their top priority. •Encourage employee involvement in quality improvement and encourage employee participation in community activities •CHS is one of the nation’s leading operators of general acute care hospitals. •Own and operate community hospitals that offer quality, cost-effective healthcare. B. Weaknesses •Community Health Services is in a strict market niche.

Although there are many different types of hospitals across the nation, CHS specializes in general acute care hospitals, narrowing their choices for investment.

Having to adapt to healthcare reform. •Stock price has steadily fallen this year. C. Opportunity •Expansion in the U. S. – they have a presence in southern, east, and west coast states, so they could expand in the northern half of the U. S. •They can also expand in the states they currently have a presence in. D. Threats •Healthcare reform. •Insurance changes Changes for primary and secondary care physicians. •Competition from larger hospitals that offer other types of care to patients. III. Porter Five Force Analysis A. Strength of Competition •There is a fair amount of competition as CHS only owns or leases 135 hospitals •However, in 55% of the markets they serve, CHS is the only healthcare provider, so they have carefully and strategically picked their markets. B. Threat of New Entrants •This is a low threat as hospitals are very expensive to start and require a lot of capital.

As for general acute care hospitals, CHS hospitals seem to offer a high quality care with low costs, making it even more difficult for new entrants to compete with them. C. Bargaining Power of Buyers •Buyers (Patients) do not have much buying power as healthcare prices are typically very similar from hospital to hospital. Especially in geographical locations where CHS is the only provider of healthcare, buyers have no other option. D. Bargaining Power of Suppliers •Suppliers have medium bargaining power with CHS.

Hospitals need a lot of expensive equipment, insurance, and other assets, and in the case of some of those assets, like insurance, they have multiple options, but may be more limited when it comes to purchasing medical equipment. E. Threat of Substitute Products •The threat of substitute services goes along with the competition. There are many hospitals in the U. S. , so any of those can be considered substitute products.

As stated earlier, CHS’s careful placement of hospitals has rendered them a low amount of threat from other hospitals. IV. Strategies A. Marketing CHS does not put its brand on any of the hospitals it owns or leases so that the hospitals can maintain their local identity. •Encourage employees to participate in community activities that help them network with potential patients who live in the area and increase the reputation of the hospital. •“Integrating and improving the financial and operating performance of newly acquired hospitals, and more importantly, developing strong community relations, has continued to be a distinct competitive advantage for CHS.

”From chs. net B. Competitive •Maintain high levels of quality service to patients. Identifies acquisition candidates in growing non-urban markets with little or no competition. C. Boundary •CHS makes more services available closer to home, thus stemming out migration and securing market share. •Regionally, CHS hospitals are located in the southern half of the U. S. D. Global •CHS does not own or lease any hospitals globally nor does it plan on expanding into foreign markets. •Have maintained a local/national strategy. E. Corporate-Level •CHS gives its hospitals access to significant amounts of capital in order to expand services, add equipment, upgrade technology, and make physical improvements.

Their plan is to integrate and improve the financial and operating performance of newly acquired hospitals. VI. Ethics Issues •CHS has not experienced any ethical issues so far but must always be sure to maintain their ethical conduct so as not to commit fraud or malpractice. VII. Recommendations •Maintain high quality and cost-effective care. •Continue to promote employee wellness, productivity, and quality of care. •CHS should expand into the northern parts of the U. S. in order to increase profits and stock price.

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