MHA5010_BantaLucresha_Assessment1-1
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Health Science
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Dec 6, 2023
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1
Current Environmental Analysis
Capella University
Lucresha Banta
July 14, 2023
2
The healthcare organization that I have selected is UnitedHealthcare Group.
UnitedHealth Group, located in Minneapolis, MN, is a health care and well-being
company. UnitedHealth Group is a managed healthcare company that promotes
evidence-based medicine, simplifies the administrative aspects of healthcare delivery,
and provides actionable and relevant data to help physicians, consumers, employers,
and healthcare professionals to make better and more informed healthcare decisions
(www.uhc.com).
Directional Strategy
Directional strategy is a company’s “mission, vision, values, and strategic goals”
(Ginter, Swayne, & Duncan, 2018, p. 165). UnitedHealth Group’s values include
integrity, compassion, relationships, innovation, and performance. UnitedHealth Group’s
mission statement is “helping people live healthier lives and helping make the health
system work better for everyone” (www.uhc.com). UnitedHealth Group’s priorities are
achieving universal coverage, affordability, and health outcomes (
wwww.uhc.com
).
“Informed by our stakeholders, our sustainability priority areas reflect our commitment to
providing distinct value to those we are privileged to serve and society more broadly.
Our five strategic growth priorities — value-based, comprehensive care delivery; health
benefits; health technology; health financial services; pharmacy services — reflect how
we see our business objectives and mission working in tandem to support a healthier
society” (
2021-sustainability-report.pdf (UnitedHealth Group.com)
.
External Environment
3
A PEST analysis uses political, economic, social, and technological information
or factors that could affect a business now or in the future [ CITATION Mar23 \l 1033 ].
The analysis helps management better understand the market and prepare for potential
shifts.
Some external factors affecting UnitedHealthcare Group include other managed
healthcare companies such as The Cigna Group, Humana, Blue Cross Blue Shield, and
Aetna. The competitive factors that can affect business include sales, pricing, and
marketing of the products and services, consumer satisfaction, product innovation, level
of quality of products and services, network capabilities, market share, efficiency of
administration operations, product distribution systems, financial strength, and
marketplace reputation. Political factors include government regulations, CMS
regulations, hospital regulations, healthcare bills, legislation, and funding. Patients’
financial status, ability to pay for healthcare services, and social determinants of health
are all economic factors to consider. Social factors include changes in the age
demographics of consumers and changes in spending habits of consumers post covid.
Due to more people having internet access, consumers can more easily shop and use
information from the internet to help make more informed decisions. Technology factors
include what AI services other companies have available to their members and how
easy their platforms are to use. Consumers, both members, and providers, appreciate
the ease of use when it comes to using media that companies have to offer. The more
complicated they are, or the more issues there are, the less likely the consumer will use
the company. Internet security and the protection of personal data are important. The
extent of internet security depends on the quality of hardware and software, which may
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not protect the company’s portal from unauthorized attacks, resulting in break-ins and
other disruptive system failures.
Internal Environment
Assessing the internal environment is the next important step. Major strengths for
UnitedHealth Group include operating performance, premium earnings, and market
presence. UnitedHealth Group has a strong focus on attracting and supporting its
workforce. They strongly focus on DEI initiatives, military support, disability inclusion,
and employee pay equity. UnitedHealth Group has a 75% positive employee experience
score, with 253,000 employees responding to the Employee Experience survey
(https://sustainability.uhg.com). UnitedHealth Group has strong and effective corporate
governance practice that helps drive long-term value for the company. This helped drive
a 12% YoY increase in revenue in 2022.
UnitedHealth Group’s major concerns include declining investment income,
online theft and hacking, and interest rate fluctuations. The company reported a
decrease in investment and other income of 12.7% to $2,030 million in FY2022, which
restricted its ability to meet policy claims. The extent of internet security depends on the
quality of hardware and software, which may not protect the company’s portal from
unauthorized attacks, resulting in break-ins and other disruptive system failures.
Fluctuations in interest rates could hamper the company’s profitability. Since the
company’s investment portfolio contains interest rate-sensitive investments, volatile
interest rates could affect the company’s operating performance.
5
Forces Governing Competition
Several factors govern competition with UnitedHealth Group. Porter’s Five
Forces allow for anticipation and trends in the industry and changes in the competition.
It will enable a company to make strategic decisions and ensure a competitive
advantage [ CITATION Ovi21 \l 1033 ]. One such factor is the ability to stay ahead of the
competition with technology and services. Developing new strategies to help patients
meet healthcare needs by developing new and innovative services to stay ahead of the
competition is important. They are creating imaginative marketing to draw new
customers in and developing methods to satisfy current customers. UnitedHealth Group
must know the competition’s business trends, including mergers and acquisitions. In
partnership with Optum, UnitedHealth Group has an increased ability to provide more
services, including pharmacy and infusion services, primary care, and home health
services, to its members, putting UnitedHealth Care at a distinct advantage over other
healthcare insurance companies. By acquiring companies such as LHC, Optum and
UnitedHealth Group can expand their services beyond just insurance. They can provide
members care across the entire spectrum of healthcare, from acute care to post-acute
care, while minimizing the cost to the member.
Using Porter’s Five Forces Model, it is easier to see the breakdown of the forces
of competition to UnitedHealth Group.
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Conclusion
UnitedHealth Group has a strong overall presence in the health insurance
marketplace. Despite several strong competitors, UnitedHealth Group holds 12.5% of
the market. UnitedHealth Group has a strong workforce with positive employee
experience survey results indicating a happy force. They have programs to promote
DEI, develop leadership, and promote health and well-being. UnitedHealth Group has
strategies to prevent cyber-attacks, prevent patient information leaks, develop AI, and
simplify online processes for providers and members alike. They are using technology
to provide no out-of-pocket costs for 24/7 virtual visits, increasing member satisfaction
and making UnitedHealth Group a more valuable asset to its members.
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References
2021-sustainability-report.pdf (UnitedHealth Group.com)
Fairlie, M. (2023, February 21).
Business News Daily.
Retrieved from
What Is a PEST Analysis?
(businessnewsdaily.com)
Ginter, P. M., Swayne, L. E., & Duncan, W. J. (2018).
The strategic management of health care
organizations
. John Wiley & Sons, Incorporated.
Global $1.72 Bn Health Insurance Markets, Competition, Forecast & Opportunities, 2026.
(2021, Jun 18).
NASDAQ OMX's News Release Distribution
Channel
http://library.capella.edu/login?qurl=https%3A%2F%2Fwww.proquest.com
%2Fwire-feeds%2Fglobal-1-72-bn-health-insurance-markets%2Fdocview
%2F2542211679%2Fse-2%3Faccountid%3D27965
Jurevicius, O. (2021, November 21).
Strategic Management Insight.
Retrieved from Porter's
Five Forces: https://strategicmanagementinsight.com/about/
Kohnová, L., & Salajová, N. (2023). Re-Thinking Industry 4.0 Effect on Competitive Forces:
Empirical Study on Innovation.
Sustainability,
15
(3), 2637.
https://doi.org/10.3390/su15032637
Porter’s Five Forces Analysis of UnitedHealth Group - Porter Analysis
UnitedHealth Group Inc (UNH).
(2023). London: GlobalData plc. Retrieved from ProQuest
Central; ProQuest Central
http://library.capella.edu/login?qurl=https%3A%2F
%2Fwww.proquest.com%2Freports%2Funitedhealth-group-inc-unh%2Fdocview
%2F2475770899%2Fse-2%3Faccountid%3D27965
8
Waddill, K. (2021, June 15).
UnitedHealth Group Outlines Strategies to Improve Health
System, Access to Care.
Retrieved from
https://healthpayerintelligence.com/news/UnitedHealth Group-outlines-strategies-to-
improve-health-system-access-to-care
Global $1.72 Bn Health Insurance Markets, Competition, Forecast & Opportunities, 2026.
(2021, Jun 18).
NASDAQ OMX's News Release Distribution
Channel
http://library.capella.edu/login?qurl=https%3A%2F%2Fwww.proquest.com
%2Fwire-feeds%2Fglobal-1-72-bn-health-insurance-markets%2Fdocview
%2F2542211679%2Fse-2%3Faccountid%3D27965