Companies in this industry provide a wide range of health care and social services through hospitals, doctors’ offices, nursing homes, outpatient surgery centers, and other facilities.
Demand for health care services is driven by demographics, injury and illness rates, and advances in medical care and technology. The profitability of individual companies depends on efficient operations and, in the case of many nonprofit health care providers, obtaining grants and federal funds. Large companies have advantages in accessing the latest medical research, buying supplies, offering a wide range of services, and negotiating contracts with health insurers. Small institutions can compete successfully by serving a limited geographical area, offering specialized services, or building a local reputation for quality care. The US health care sector is highly fragmented: the top 50 organizations generate about 15% of revenue.
Products, Operations & Technology
Major services include hospital medical care (45% of industry revenue) and outpatient care provided by physicians (20%). Other services include dental work, urgent care, elderly and hospice care, medical labs, home health, rehabilitation, and social assistance. Leading health care entities in the US include a number of for-profit entities, an exception to the global norm of nationalized medicine. However, of the 7,100 US hospitals, around 75% are not-for-profit. Most doctor’s offices and ambulatory care centers are run as for-profit enterprises.