Final Industry Analysis Paper

If a healthcare company does not want to be acquired

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If a healthcare company does not want to be acquired or merge with another company, they should make sure they are following each rule to a “T” By following the rules, healthcare companies do not have to worry about the being fined because of the penalties for breaking the new rules. New Healthcare Law The new healthcare law will affect every healthcare company in Healthcare providers will have to re-shape their practices in order to comply with the law 13
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America. There are many rule changes, regulations, and measures that will be implemented facing healthcare companies. Each company also needs to make sure that they are following the law or risk being fined by the U.S. Government. Employee Health Insurance Companies are now required to spend a minimum of 80-85 cents of every premium dollar on medical care & healthcare quality, depending on the size of the plan. If the company spends less, they are required to give customers a rebate at the end of the year. Companies should implement cost cutting measures to make sure that they have the money to pay for their employee’s healthcare. SWOT Analysis of the Top Three Companies United Health STRENGTHS Ability to acquire big earnings Price Strength in: o Information tools o Funding mechanisms o Specialty products Ever-growing customer base WEAKNESSES Growing general & administrative expenses Exposed to huge risk because the company is dependent on the U.S. market Derives almost all revenues from the U.S. Market OPPORTUNITIES Increasing market share through mergers and acquisitions New investments Increased services: o Coordinating organ transplants o Running clinical trials for drugs o Supplying medical instruments Providing home-care services for elderly THREATS Current economic recession (although economy is turning around) Recent acquisitions & mergers of the company Complex state & federal rules, laws & regulations affects its growth WellPoint 14
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STRENGTHS Largest company for health plan in the BCBS Association More than 33 million medical members Employs more than 39,000 workers Awarded more than $112 million in local & national grants WEAKNESSES Selling it’s NextRx subsidiaries Employees going against the Health Reform Firm wanting to raise Premium of some services Firm claims $30 million in spending in 3 years but shows no financial records OPPORTUNITIES Favorable demographic trends Huge uninsured population Market fragmentation will provide more opportunities to the firm THREATS Changes in the federal & state regulations Intense competitive environment Healthcare cost-cutting measures Government interventions Aetna STRENGTHS Low medical loss ratio Comprehensive product portfolio Intensive national network WEAKNESSES Overdependence on the U.S.
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