Monday, March 28, 2011

Snowball Effect on the External Environment in the Healthcare Industry

Readings for this week touch on various concepts on the external environment. The models and concepts described in the articles allow me to comprehensively scan the external environment surrounding the healthcare industry, where the level of uncertainty and turbulence in the market are significantly increasing due to numerous changes in the macro-environment – the economic, socio-cultural, technological, political, and demographic trends. The article I found on PwC’s website, Top Health Industry Issues of 2011, describes 6 industry trends and exemplifies on-going changes in the environment.

Interestingly, changes in the macro-environment surrounding the healthcare industry are related to each other, causing compound effects on the healthcare industry. For example, the economic crisis in 2009 led to the increased number of the unemployment and the uninsured, which created a political climate for the healthcare reform. The reform, in combination with the rapidly aging population, is leading to the huge increase in demands. This trend calls for health IT including electronic medical records because healthcare providers need to streamline processes and provide cares efficiently to accommodate needs. Also, there are numerous emerging trends related to health IT and consumerism, such as telemedicine, Accountable Care Organizations, medical tourism, retail clinics and so on. One change in the external environment is triggering multiple changes in other areas, and the snowball effect has thrown the highly-regulated and stable industry into the chaotic external environment.

Under the uncertainly, I believe providers need to not only craft a new strategy but also reinvent strategy development process itself because the new environment requires agile responses. So, my questions are:

  • What changes in strategy development are required for providers in order to develop agile strategy development process? Is there any industry providers should look into to get some ideas on reinventing strategic development? How about the IT industry?
  • How should providers implement organizational changes in strategic development process? How should they overcome resistance to changes?


PwC, Health Research Institute, Top Health Industry Issues of 2011, ( 2010

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