In considering legal factors that affect HCA

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Feb 20, 2024

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In considering legal factors that affect HCA’s current and future landscape, a variety of enacted laws and safety regulations must be highlighted. At its current state, the healthcare industry has focused on anti-discrimination, ethical practice, and employees’ labor health and safety laws which affect day-to-day operations. The most widely known healthcare law – the federal Health Insurance Portability and Accountability Act, or HIPAA – underlines a large portion of the legal side of healthcare. The focus of this specific act revolves around the creation of “confidentiality systems within and beyond healthcare facilities,” with the goal of keeping health information private (Edemekong, et al.). Through this goal, healthcare providers, both in the present and future, are influenced to carefully approach patients and regularly undertake risk assessments through their IT department (Murphy). Because of these stringent demands, HIPAA ultimately forces healthcare organizations to “streamline administrative healthcare functions,” thus improving efficiency and the protection of private information of patients (Adler). Aside from privacy and data protection, healthcare fraud remains a major liability to the industry. Specifically, the False Claims Act alone recovered nearly $1.8 billion in settlements related to healthcare in 2020. As trends continue to show, this value is only increasing from year- to-year, as a greater number of whistleblowers have stepped forth (Gallee). Due to the aggressive response to fraud, lawsuits under the False Claims Act can ultimately threaten the existence of medical practices; therefore, providers must put a great focus on accurately reporting the services provided to patients while additionally providing legitimate documentation from the patients’ time at their facility. Without full compliance of this act, healthcare providers can possibly weaken their position in the industry compared to other market contributors.

In the future, the healthcare industry must continue to follow the aforementioned laws; however, it is likely that a new legal force, that has come to light through the Covid-19 pandemic, will begin to affect medical practices. According to the CDC, the Hispanic population “makes up 18.5% of the U.S. population, but comprises 32.5% of Covid-19 deaths;” moreover, the Urban Institute’s Health Policy Center published a study showing African American patients experiencing “significantly worse quality of care compared to white patients” (Gallee). This information gestures toward a trend of racial disparities within the healthcare industry and creating future legal issues for companies. As of July 2021, these racial and ethnic disparities have been addressed through state legislation, making healthcare inequity a key factor in HCA, along with other healthcare companies, success. Key Success Factors In considering HCA, the subheading of healthcare, which revolves around hospitals and care centers, holds a variety of key success factors that have a great impact on future market success. The first main factor is centered around organizational success, as leadership in governance and managing are crucial for an effective healthcare operation. Specifically surrounding governance, the board of directors for each company should understand their role on an individual level, as each board is made up of people with varying backgrounds. Moving toward the C-Suite and managers, whether they are administrators or physicians, each must be competent in their education, as the industry entails difficult projects. Aside from effective leadership, the healthcare system’s success relies on an additional two factors: indispensability and reinvention. As a medical practice, clinics and hospitals “must make [themselves] indispensable with an offering that healthy community residents, patients and

payers cannot avoid or go around” (Bina). In order to keep and gain faithful customers, a constant improvement of service is necessary. Following this improvement, healthcare companies must put a focus toward the patient by constantly reinventing their experience. Shideh Sedgh Bina, a founding partner of Insigniam – a management consultant firm, describes the necessity of reengineering, explaining, “There is a major distinction between understanding the role of the patient in healthcare and actually working with the patient to redesign healthcare” (Bina). The final key success factors for healthcare take the shape of technological advancement and location. Dealing with technology, a company’s strength in the healthcare market largely depends on their digitization of health records and accessibility to patients. Following this idea of accessibility, location holds one of the largest factors in company success. Chief Operating Officer Todd Vang of Physicians Immediate Care explains the impact of a successful location on medical practices, saying, “Decisions about location strategy” revolve around “building on a solid understanding of your company’s value proposition and using model that combines organizational experiences, hard data and fieldwork will help your organization grow market share” (Vang). By choosing locations based on collected data, healthcare companies can significantly impact their market standing, showing that the choice of a location remains a considerably key success factor. Strategic Group Map For HCA’s industry strategic group map (Appendix A), the variables of rival competition located on the x and y-axis are the number of locations within the United States and each company’s pricing score, respectively. For the number of locations, hospitals and other centers of care – such as clinics and care sites – were added together and placed on the map, with each

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company’s number being accessed courtesy of their corporate website. The pricing score, however, was gathered through Comparably, where customers submitted a score from one to five based on their opinion of each company’s price (http://www.comparably.com). After plotting each company on the graph with respect to each variable, the final element was the company circle size. The size depicts the 2020 revenue of each company, courtesy of Craft (http://www.craft.co). Altogether, the map displays the cluster of healthcare industry rivals that have similar approaches to the market. Taking a step back and viewing the map, a few key takeaways can be acknowledged. The first, and most obvious, takeaway is the strong rivalry between HCA, Ascension, and Community Health Systems. From the map, it can be seen that all three companies share reasonably similar amounts of revenue, locations, and pricing scores. This means that in order to maintain success in the future, HCA must continue to grow their locations and maintain a strong pricing score, as the two overlapping companies have seen similar success in the target market as well. An additional implication of this map revolves around the smaller scale companies that are depicted in a cluster on the left side of the map. With the knowledge gained from the map, HCA can view these companies as unlikely rivals. Specifically, companies like Texas Health Resources and Encompass health do not have close to the number of locations as HCA and its aforementioned, strong rivals, meaning that these organizations do not provide for the same audience as HCA; therefore, HCA should spend little to no resources on competition with them. Overall, the map provides a more appealing and easily understood glance at the healthcare industry and its competition among national healthcare providers.

Edemekong PF, Annamaraju P, Haydel MJ. Health Insurance Portability and Accountability Act. [Updated 2022 Feb 3]. In: StatPearls]. Florida: StatPearls Publishing 2022 Jan-. Fro: https://www.ncbi.nlm.nih.gov/books/NBK500019/ https://www.lepide.com/blog/how-hipaa-affects-the-newest-healthcare-trends/ https://www.hipaajournal.com/why-is-hipaa-important/#:~:text=HIPAA%20has%20helped %20to%20streamline,from%20the%20same%20hymn%20sheet . https://www.symplr.com/blog/7-current-legal-issues-in-healthcare https://www.beckershospitalreview.com/hospital-management-administration/10-critical- success-factors-for-the-future-of-healthcare.html https://www.llrpartners.com/growth-bit/location-strategy-healthcare-best-practices/

In considering legal factors that affect HCA

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