Healthcare industry is the sector of the economy whose players are providers of diagnostic, remedial, preventive and therapy like as midwives, doctors, nurses, hospitals plus other private, public and voluntary organizations. And includes medical equipment, pharmaceutical manufacturers and health insurance firms. This definition in itself differentiates it from other industries as other industries have different players.
Healthcare is quite different from other industries in its crux, be it in its successes and unique challenges.
Hospital are at the center of healthcare, “hospitals are large and complex organizations and differ from most traditional
organizations in many ways. First, hospital missions focus on the more abstract
goals of improving community health or curing and eliminating disease”. (Langabeer, 2015)
The differences are many, below are a few that stand out:
Regulations: There are many more rules regulating the healthcare industry than most other industries. These rules are made by various bodies both in public and private sectors like the Food and Drug Administration who monitor creation, manufacturing and use of drugs; Center for Medicare and Medicaid Services functions in a similar capacity for test, treatment and care (Gee, 2016); The Payor (Health Insurance Companies) also create unofficial regulating power through patient satisfaction surveys, deciding-power over what is perceived as due or paid to provider; Professional Associations like the Urgent Care Association Of America (“FAQs Size of Industry”, n.d.) American College Of Emergency Physicians; Bye-laws, Political Lobbyists, Affordable Care Act of 2010 and so on.
End-Users: The relations between the healthcare industry and its end users is that of business-to-customer unlike major industries like Manufacturing, et cetra who are business-to-business. Transactions on products and services are conducted directly between the healthcare organization/player and the consumer.
Players: There are multiple players in a normal single transaction process of product/service selection, buying, payment and usage’ in the healthcare industry, they are Payor, Patient and Provider. Most Industries are set up such that the consumer/user usually performs all these four steps of the process in procuring the product/service, but in the healthcare industry, a considerable percentage of the myriad of transactions the patient is not the one who eventually pays. It is the Payor: and these are Insurance companies, Employers, Government et cetra. These higher number of relevant players causes a “market dislocation” (Gee).
Standardizing: “In most industries, the product or service can be standardized to improve efficiency and quality. In health care, every person/patient is chemically, structurally and emotionally unique. What works for one person may or may not work for another. In this environment, it is difficult to standardize and personalize care in parallel” (Halamka, 2011)
Local: though healthcare is an industry prevalent with highly skilled workers and the new capabilities and frontiers of technology cum healthcare, it is still an industry that services only consumers in its local also despite being a service industry it can not transport its services. (Marchinko, 2011)
Healthcare has been politicized more than most other industries in recent couple of decades, with powerful lobbyists in Washington, its a platform people have used to win campaigns on capitol hill.
According to Langabeer & Helton, healthcare industry has much to learn from other industries that are more developed due to their taking advantage of technological advancements also more to do when it comes to developing Operations Management and its application like those industries have done.
Reference
Business to Consumer (n.d.) Retrieved from https://www.inc.com/encyclopedia/business-to-consumer.html
Gee T. 4 Ways Health Care Is Different from Other Industries (2016, February 25) Health Works Collective Retrieved from https://www.healthworkscollective.com/4-ways-health-care-different/
Halamka J. (2011, August 14th) Healthcare is Different (blog post) Retrieved from http://thehealthcareblog.com/blog/2011/08/14/healthcare-is-different/
Langabeer, J. R. II & Helton, J. R. (2015). Health Care Operations Management 2nd Edition Pp34 Jones & Bartlett Publishers
Marchinko, D.E. (2011, January 19). Recognizing the Differences between Healthcare and Other Industries Retrieved from https://medicalexecutivepost.com/2011/01/19/recognizing-the-differences-between-healthcare-and-other-industries/
U.C.A.O.A. FAQs Size of Industry (n.d.) Urgent Care Association Of America. Retrieved from http://www.ucaoa.org/?page=industryfaqs#collapse1
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