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SWOT ANALYSIS FOR VITAS HOSPICE

Name

Institution

SWOT ANALYSIS FOR VITAS HOSPICE

Section1- Internal Weaknesses and Strengths

1-Leading

Competent Executive Team

VITAS’ senior management is composed of industry leaders and people with vast management and field experience in the nursing, medical, health care, hospice and palliative care. The comprehensive leadership infrastructure separates the roles of each department within the organization leading to efficiency in departmental operations. Taking an example of Donald Gaddy; the leader of the Marketing Development and Sales, at VITAS’ since 2007, he brought the experience and success of three decades in the distribution of pharmaceuticals and drugs. Additionally, Donald Gaddy has experience in sales and management and operations that he brings to his role as the Senior Vice President of Market Development and Sales. Under Donald leadership, VITAS has improved its sales platform nationwide, upgraded its sales training program and streamlined its branding campaign, as well as all the marketing collaterals (Kirby, 2012).

2-Control

Fraud has been a major issue at VITAS Hospice healthcare industry. Fraud is a commonplace within the healthcare industry because of the internal weaknesses of the organizations internal control systems. Thus, VITAS Hospice ought to make improvements in order to curb the problem of fraud from occurring in the future. VITAS Hospice should adopt a stronger internal control programs like compliance programs and protocols that can identify irregularities and fraud (Kirby, 2012). The internal control programs would enable the organization to give reliable reports and comply with the laws and regulations. For instance, the management should be aware of their responsibilities as pertains to billing procedures, patient safety, and any other areas that may pose challenges in the industry (Kirby, 2012). The management ought to be aware of the laws that should be followed to prevent fraud from occurring. Additionally, the VITAS Hospice should be proactive and responsive towards the clients its serves and the stakeholders who allege fraud to redress the fraud problem and mitigate further problems. Moreover, the fraud allegations should be properly documented (Kirby, 2012). The documented allegations provide a solid background for investigations to address the claims. Also, the VITAS Hospice should implement robust peer review programs. Periodic peer review of the employees by experts would assist the organization to identify the people who warrant special monitoring and review. Carrying out control activities like approvals and authorizations, separation of responsibilities, and performance evaluation would ensure detection of fraud sooner than later and the organization can fix the problem (Kirby, 2012). Failure to perform control activities results into more mistakes and errors within an organization.

VITAS Hospice management team has managed to shape the organization by making relevant decisions. The decisions that the administration has made relate to the acquisition of technology and recruitment and development of staff, allocation and expenditure of finances, and an addition of services. The administrations managed to support and coordinate the services that are offered within the organization. The decisions that the management at VITAS has taken have led to corrective actions that have resulted in increasing performance (Kirby, 2012).

3-Planning

VITAS Hospice has excelled in billing and collection of revenues that has resulted in stellar financial performance. The internal planning of VITAS Hospice allows for the Medicare reimbursements. Besides, the commercialization strategy of the VITAS Hospice to offer services throughout the country has resulted in the realization of profit. The active engagement of the competent team of leaders has led to the successful implementation of the commercialization strategy while maintaining the competitiveness of the organization in the market (Kirby, 2012).

4-Organization

Improper documentation

VITAS poor record keeping has landed it in lawsuit problems. In the year 2013, Medicare filed a lawsuit against Chemed, alleging that VITAS gave false bills to the government for medical care. Moreover, the government has embarked on the investigation of the hospices in the recent years because the number of the patients opting to go for palliative care has been increasing exponentially vis-à-vis aggressive treatment. Being the leading hospice service provider in the US, VITAS has been faced with the challenge of proper record keeping owing to the bulk of the patients that are enrolled in the facility daily (Kirby, 2012). For example, VITAS reported an average daily census of nine thousand nine hundred and thirteen patients at the end of the second quarter of the year 2005. The overbilling allegations resulting from the improper record keeping has put VITAS at odds, and it has to pay to settle the claims, just as most of its competitors who have found themselves in the similar situations (Sultz, & Young, 2006). The available records show that eleven smaller hospices have paid eighty-eight million dollars to settle overbilling allegations (Kirby, 2012).

However, currently VITAS has made milestones in the record keeping. The organization has integrated technology into its record keeping by using the Applix's TM1 and Turbo Integrator both of which have improved the financial planning, analysis, and management. The result of integrating such technology is the rapid access to information by the VITAS executives (Kirby, 2012). Additionally, the executives have an easy access to the information, and they can retrieve the information and transfer them to the reports and presentations whenever there is a need to do so. The integration of TM1 has improved the labor management, decision making, drug formulations, return-on-investments, and creating sophisticated reports.

Economies of scale

VITAS hospice has opened many hospice programs across fifteen states in the US. The expansion of VITAS into new markets and additional locations has improved the economies of scale for its operations. The economies of scale have increased the competitive edge of VITAS Hospice. Consequently, the widespread geographical coverage has led to a rise in the number of patients that are enrolled in the VITAS Hospice facilities (Kirby, 2012). Currently, VITAS reports an average daily census of more than seven thousand two hundred patients nationwide. Moreover, VITAS Hospice is reported to be the leading hospice care provider in the nation which is an indication of its advantage to keep a larger market share and advance its expansion. Being a dominant service provider in hospice care, VITAS has the benefit of lower average cost per unit; therefore, it can keep the competitors at bay. The widespread market distribution that VITAS has achieved puts it in a better position to sell its services than its competitors because it can carry out extensive sales promotion and advertising (Kirby, Keeffe, & Nicols, 2007). VITAS health care is in better position to expand its sales because of the immense leadership structure that has been instituted in the management profile. For example, the Department of Market Development and Sales at VITAS health care can carry out sales promotion with ease and ultimately capture more customers to boost the sales and marketing income (Kirby, Keeffe, & Nicols, 2007).

Section 2- External Opportunities and Threats

“Porter’s Five Forces Model”

Bargaining Power of Suppliers

VITAS Hospice provides over the counter drugs as well as prescription drugs to the patients. However, pharmacists have been identified to play a role in high-quality hospice delivery to patients. Bringing pharmacists on the board is an opportunity to the VITAS Hospice to improve the management symptoms of patients through the use of medication at the end f life. Pharmacists also play significant roles in the clinical, dispensing, and administrative services. Therefore, direct integration of pharmacists into the interdisciplinary VITAS’ Hospice teams would improve patient care (Kirby, 2012).

VITAS Hospice employs a diverse team of workers ranging from nurses, clergies, executive managers, pharmacists, and sales personnel among others. All the employees render their services on behalf of the VITAS, and they are remunerated fairly. VITAS fair remunerations have enabled it to realize profits that have sustained its operations over the years. Most importantly, the impressive financial performance has enabled the organization to remain competitive in the hospice market and attract professionals to implements its strategies (Kirby, 2012).

Risk of Entry by Potential Competitors

VITAS hospice is a for-profit organization. Additionally, there has been exponential growth in profit-oriented hospice programs because of the increasing desire for costly treatments thereby creating a competitive platform for hospices. However, most nonprofit-oriented hospices have entered into the healthcare business, and they have established a foothold and recognition in the market (Kirby, 2012). Also, there are skilled professionals who can provide caregiver and medical assistance in the highly fragmented industry. Increasing demand for the hospice services coupled with low barriers to entry into the hospice industry makes it easy to enter into the industry. Low profit margins for the relatively small organizations typically encourage the operators to resort to merging the companies with the bigger companies to raise profitability and reduce costs (Kirby, 2012).

Bargaining Power of Buyers

Even though there has been an exponential increase in the number of hospice services providers in the market over the past few years, VITAS remains the leading service provider throughout the nation. Also to that, VITAS has managed to enroll a high number of patients into its facilities throughout the country. Thus, it is a clear testimony that VITAS Hospice has been providing quality health care services to its customers (Harris, 2010). Continued increase in the number of enrolled patients can increase the customer base for VITAS and it can offer discounts to the patients while still maintaining profit margins. There are also few large hospice providers that can give VITAS a competitive advantage over the other hospice service providers.

Threat of Substitutes

The hospice care market is highly disjointed. Based on the available data, VITAS Hospice estimates that approximately seventy percent of the operational hospice programs are operated as government-sponsored programs or not-for-profit organizations. Additionally, VITAS Hospice competes with the nursing homes, hospitals, physicians, home health agencies and other healthcare providers (Harris, 2010). Some of the VITAS competitors are better capitalized and are significantly larger than VITAS. Moreover, various health care providers have diversified into the hospice market.

Intensity of Rivalry among Competitive Firms

Home Care Providers Industry, hospitals, non-profit organizations, and health care facilities pose the fiercest competition to VITAS’ services. The non-profit organizations and Home Care Providers Industry, however, stands out as the top competitor for the VITAS hospice service provision (Harris, 2010). The increase in the per capita income has led to a rise in the number of people covered by private health insurance and people who can afford-out-of pocket payments. Consequently, the reimbursements from Medicare would be low thereby considerably lowering the profit margins of VITAS.

Consider the role of the macro-environment forces and how each factor is relevant

Global forces

International factors like economic associations and inter-governmental relations can enhance the competitiveness of businesses in the international environment. Economic relationships between countries increase free trade between the countries. The consequence of economic relationships is the decrease in trade barriers that facilitates the faster exchange of resources and outputs across national boundaries (Kirby, Keeffe, & Nicols, 2007). The economic ties are beneficial to the businesses and presents lucrative opportunities for expansion of multinational companies. Change in countries’ leadership may limit or promote the ability of corporate to participate in the economies of the countries (Harris, 2010).

Demographic Forces

Changes in population demographics have a significant impact on the operations of businesses. Change in the structure of the society has an effect on the demand for products and services in the market. The increase in the birth rates and high life expectancy presents an opportunity for the hospice businesses to offer children and adults palliative care (Harris, 2010).

Political & Legal forces including changing ethical and environmental requirements

VITAS competition in the market has received a major blow in Florida and potentially in other states because of the Certificate of Need (CON) laws. The Certificate of Need laws prohibits the expansions of health care facilities pending the government permission. Also, the law demands that the healthcare facilities should purchase certain new medical equipment, and offer new services. The regulations stipulated in the CON laws were enacted to curb market competition that would result in medical providers' over-spending in facilities and medical equipment thereby raising the cost of medical care (Kirby, Keeffe, & Nicols, 2007). Currently, the law is implemented in thirty-six states in the US. Therefore, other health care providers in other states that can receive the Certificate of Need would pose greater competition to VITAS Hospice. If the company cannot attain the requirements of the CON laws then it would face the fierce competition from health care providers that provide similar services and that would have significant adverse effects on the operations of the company throughout the states of the nation. Similarly, friendly intergovernmental relations with other countries may promote the ability of the corporate to enter foreign markets which creates the opportunities for the businesses to begin marketing in the foreign economies (Kirby, Keeffe, & Nicols, 2007).

Technological Forces and Changes

Technological innovations continue to advance at a rapid rate. Changing technology influences the demand for an organization's products and services. Changes in technology may create new opportunities for the firm or threaten the survival of an industry (Sultz, & Young, 2006). Adopting the latest technology enhances the survival of a business in the market environment. However, financial constraints and legislations may be a barrier to acquisition of the new technological innovations and pieces of equipment that may threaten the existence of a business in the global market environment.

Social Forces

The socio-cultural influences that control business operations include levels of education, social mobility, health and lifestyle, religion and demographics. A highly educated population allows people to earn higher incomes. The high income is associated with good health and longer lifespan (Sultz, & Young, 2006). Besides, higher income enables people to purchase private insurance cover and to manage out-of-pocket payment to settle medical bills. Understanding the social infrastructure of the population would enable the hospice providers to provide relevant care that suits the socio-cultural parameters.

Section III: Evaluating the SWOT Analysis (leading to future recommendations)

VITAS Hospice organization has managed to expand its geographical coverage across the nation that has significantly increased the profit margins. There are more opportunities that exist in the domestic and global markets to expand its market size to a global scale. Because pharmacists' roles in the hospice facilities are varied and are majorly administrative, there are opportunities to define and standardize the functions and responsibilities of the pharmacists across the providers to ensure high-quality care delivery to the patients (Harris, 2010). Similarly, recommendations have been made to develop hospice quality measures to curb the problem of inappropriate drug prescription in hospices.

References

Harris, M. D. (2010). Handbook of home health care administration. Sudbury, Mass: Jones and Bartlett.

Kirby, E. G., Keeffe, M. J., & Nicols, K. M. (2007). A Study of the Effects of Innovative and Efficient Practices on the Performance of Hospice Care Organizations. Health Care Management Review, 32(4), 352-359.

Kirby, E. G. (2012). Strategic groups and outcomes in the US hospice care industry. Journal of health organization and management, 26(5), 641-654.

Sultz, H. A., & Young, K. M. (2006). Healthcare, USA: Understanding its organization and delivery. Sudbury, Mass: Jones and Bartlett.