Performance-oriented: toward a successful strategy

Changes in the health care industry have profoundly affected hospital management and have caused severe declines in hospital profitability. In 1993, Health Care Management Review reported that the average operating profit margin, around 2% in 1984, had declined to a 0.2% loss by 1990. In the past, h...

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Bibliographic Details
Published in:Marketing health services 1997, Vol.17 (2), p.10-20
Main Authors: Kumar, K, Subramanian, R, Yauger, C
Format: Magazinearticle
Language:English
Subjects:
Competition
Competitive advantage
Economic Competition
Economics, Hospital
Health administration
Health care industry
Health Facility Merger - economics
Health Services Research - methods
Hospitals
Manufacturing
Market orientation
Marketing
Marketing of Health Services - organization & administration
Marketing of Health Services - standards
Nonprofit hospitals
Nonprofit organizations
Organizational Objectives
Planning Techniques
Politics
Profitability
Profits
Statistical analysis
Strategic management
Strategic planning
Studies
United States
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Summary:Changes in the health care industry have profoundly affected hospital management and have caused severe declines in hospital profitability. In 1993, Health Care Management Review reported that the average operating profit margin, around 2% in 1984, had declined to a 0.2% loss by 1990. In the past, hospitals were buffered by entry regulations and cost reimbursement; thus, they rarely dealt with traditional market pressures. But the changed terrain means that competitive factors now underscore all strategic decisions. This study examines the strategic significance of market orientation in the health care industry. The authors identified forms of market orientation by emphasizing different components, and discovered that hospitals fell into four distinct clusters or groups. They also found a critical relationship between market orientation and performance scores on a number of criteria. Finally, the authors suggest that different forms of market orientation should be employed to target specific performance measures.
ISSN:1094-1304