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HMOs on the move. Is your town big enough for the both of you?
Hospitals & Health Networks
|November 20, 1995
Insights
Health maintenance organizations (HMOs) are rapidly expanding nationwide. Strategic decisions within the next 36 months are crucial for market participants due to increasing consolidation and high entry costs.
Area of Science:
- Healthcare Management
- Market Dynamics
- Health Economics
Background:
- The healthcare industry is experiencing significant expansion of Health Maintenance Organizations (HMOs).
- Market consolidation is accelerating, altering the competitive landscape.
- The timeframe for strategic decision-making is limited due to rising entry barriers.
Purpose of the Study:
- To analyze the current expansion trends of HMOs.
- To identify key factors influencing market winners and losers.
- To underscore the urgency of strategic action in the evolving HMO market.
Main Methods:
- Qualitative analysis of market trends and expert opinions.
- Consultant insights on industry expansion and consolidation.
- Assessment of market entry costs and competitive pressures.
Main Results:
- HMOs are demonstrating aggressive nationwide expansion.
- Market consolidation is a primary driver of competitive dynamics.
- The cost of market entry is escalating rapidly.
Conclusions:
- The next 36 months are critical for determining market leaders and laggards in the HMO sector.
- Urgent strategic planning and action are necessary for organizations to navigate the consolidating market.
- Failure to act promptly may result in prohibitive entry costs and missed opportunities.
Abstract:
Health maintenance organizations are marching across the country looking for new territories to conquer. "They're expanding everywhere," notes one consultant. The winners--and losers--in this high-risk game will be determined in the next 36 months because, as more and more consolidation takes place, the price of entry is becoming too expensive. So act now, because before too long it will be too late.