Scenario: You are the Chief Executive Officer of a large and complex integrated health delivery system (IHDS). The IHDS is a for-profit health system and is located in a major metropolitan area market. The metropolitan market is in high competition with similar large integrated health delivery systems, public and private, that compete directly with your IHDS. Major characteristics of this market are booming economic activity, dynamic and diverse populations, labor market shortages, and a high uninsured population percentage (25% of the total population) which has been trending higher.
Your IHDS operates multiple long-term acute care facilities and is affiliated with teaching hospitals, outpatient and surgical centers, rehab and ancillary facilities, wellbeing and urgent care outlets, and multiple physician group practices (primary care and subspecialties clinics in different locations). You also have affiliation agreements with regional and national managed care plans and third party payers.
The recent healthcare reforms (Affordable Care Act, Accountable Care Organizations, shift from volume-based to value-based healthcare delivery systems, bundled payment system, etc.) have impacted the macro- and micro-level economic models and current competitive advantage position and outlook for the IHDS.
The Board of Directors has asked you to prepare an executive report about the economic impact of these trends and forces and to assess the economic outlook for your organization.
Write, based on the scenario above, a 1,500- to 1,700-word executive report addressing the following:
Assess the economic assumptions of a competitive market model on IHDS and identify the evidence for and against the competitive model.
Evaluate the potential economic consequences of the applied community rating and experience rating on the IHDS.
Describe the determinants of market power for the IHDS and assess how it can use the market power to demonstrate superior economic efficiency and effectiveness.
Explain how market power can affect labor market outcomes for your organization.