[Case] US HCA: the world's largest hospital group How to Make?Author: Cao Jian; Source: Health sector American Hospital Limited (HCA) is the world's largest for-profit hospital chain operators, the development of the road can be described as legendary, three degrees IPO twice delisting, the highest annual revenues had reached 50 billion dollar, its acquisition chain, the course of capital operation worth learn from their Chinese counterparts. The huge US market and relatively good health hospital system has created a number of large hospital groups, the most representative of the American Hospital Limited ('HCA') is the world's largest private health care operator. HCA's development path, very worthy of our study and learn all kinds of hospital groups. Acquisition of the road in 1968, Thomas Frist doctors led a team physician at Nashville, Tennessee, to establish a Park View Hospital (Park View Hospital), which is the predecessor of HCA. HCA as a growing myth profit medical institutions to still unsurpassed. Whether it is the ups and downs of its development IPO twice or three times delisting experience the capital of China's medical industry who have given a lot of inspiration. HCA main operating hospitals, independent surgical treatment rooms, fluoroscopic imaging treatment center, radiation oncology treatment centers, rehabilitation therapy centers and American various health care facilities. Companies with general hospitals and emergency hospital with drugs and surgery and emergency care services to patients, patients with severe heart disease patients. By the end of 2012, the company has 163 hospitals and 109 independent treatment center in the United Kingdom, Switzerland and other 20 countries, and its share of total US market first. In the mid-1960s, Frist and other Park View Hospital doctors physicians have gradually realized that the hospital needs professional management team, responsible for operations on the one hand, the development of the hospital, on the other hand can support the external financing needs of the hospital technological advances funds. So in 1968, Frist doctors, Jack C.Massey, Thomas Frist II will set up their own hospital management company, which is the HCA. Soon, HCA decided to extend its way through mergers and business interests, the purpose is to create large-scale economic entities, but also to improve the quality of healthcare in communities across the United States. HCA physicians around the close cooperation, and adopt innovative business practices to improve service quality and reduce costs. HCA was growing rapidly, not only to build new hospital in the community, the acquisition of some health services, also hosts other health institutions. HCA use their capital advantage, professional management skills as well as medical background, focus on the development of a number of market-leading core hospital, this strategy is still in use today. 1969, when the hospital has 11 HCA officially provide services to the public, to the end when it bought the 15 hospitals, thus reaching 3,000 beds. The early 1980s, the successful acquisition of HCA comprehensive care Co., after the integrated health service company, International Hospital Federation companies and health care companies, its strategic focus to the functionality of the subsidiary bodies of the merger. In 1987, HCA Group reached a peak of expansion, under the hospital's development record to 463. In its heyday, HCA's market capitalization of over 50 billion US dollars, has about 285,000 employees, now has more than 350 hospitals, 145 outpatient surgery centers, 550 home care agencies, and other affiliated companies. From the development stage point of view, HCA's development through the formation, development, maturation and transformation to enhance the four stages. Early development (formation phase + development stage), with a substantial increase in Medicare and Medicaid health care coverage to bring the demand, HCA expansion of large-scale mergers and acquisitions in order to seize market share, the formation of scale 1970 - The 1986 HCA capitalization rose 12-fold, while the S \u0026 P rose only 2.5 times over the same period; the later development (maturity + transformation and upgrading stage), HCA start stripping some non-core assets, the development direction of the external expansion mode into a diverging internal integration of intensive mode, focus on improving operating efficiency and improve profitability. High profits mystery 'Forbes' magazine 2010 survey, a total of 24 nationwide scale in more than 200 hospital beds, operating profit more than 25%. The nation's 25 most profitable hospitals, for-profit hospital chain boasts 15 seats, of which the highest operating margin Vladimir Worth Hospital (Flowers Hospital) margins as high as 53%. HCA's total of 10 hospitals on the list, including the operating margin reached 26% of the Dallas Medical City Hospital (Medical City Hospital). HCA's success, first of all due to its reasonable position in the segments of the medical industry and accurate understanding of nature. HCA select medical and hospital services as the main direction of health care expenditure structure is highly consistent with the United States. 2006 data show that the US health care spending accounted for about 16% of GDP, of which, 31% of health spending flows to hospital care, 21% owned medical services, 10% spent on the purchase of medicines, 8 percent of elderly care services, 7% are administrative costs, and the remaining 23 percent fall in other projects, including laboratory diagnostic services, pharmaceuticals, medical equipment manufacturers and the like. This positioning HCA for large-scale development to provide sufficient space. Nike King In recent years, with the expansion of the scale, HCA's services has been continuously enriched, interventional surgical trauma, mental rehabilitation and other fields. For higher income HCA made, there are four explanations: first, for-profit hospital chain, as all commercial businesses, with the goal of financial gain, and therefore more cost savings compared with other non-profit focused on public hospitals; second In HCA's business strategy, earnings tend to shy away from unprofitable services and can not generate revenue for the hospital patients, they turned this part of the cost of public health care system; and third, for-profit hospitals to be more flexible to re-engineer its management and services, or layoffs; fourth, a large for-profit hospital chain in the hospital so that doctors have to use these incentives to profit. HCA in attracting outstanding doctors, is also used a variety of ways. First, invite doctors to become shareholders under the health service agencies, these agencies include hospitals, mobile surgical centers, diagnostic institutions, home care agencies and rehabilitation and physical therapy institutions; secondly, HCA significant investments in medical data sharing has been from hospital to the doctor's warm welcome; finally, in many places, HCA provided to the doctor's office space is often Air Jordan 15 more convenient and less expensive. On the other hand, HCA is introduced by a doctor into an integrated network, successfully avoided the ethical and legal restrictions on conflicts of interest. Ethics guidelines in the United States, but also constraints of federal and state anti-kickback law, the doctors (there are some exceptions) is not transferred to the patient associated with its own direct interest organizations. However, in the federal 'safe harbor' provisions under, HCA received a striking exception: hospital owned by a market capitalization of more than $ 50 million of listed companies, as a shareholder of the company doctor is not in the restricted patient referral. That is, if a doctor holding HCA stock, then any one facility are legal referrals to HCA's. HCA under the guidance of a series of strategy, and gradually built a strong consultation network, and become one of the leading healthcare market is the most important force. Affiliated hospitals should be close to the seat of the world's largest hospital group, HCA's management model is to implement self-management branch hospital. That is, each hospital has a chief executive officer, chief nurse and chief financial officer. This makes it easy by two to three individual operation of the entire hospital. HCA in every hospital by their own conditions to set their own operational goals, the Board does not interfere with the daily operations of each hospital. HCA affiliated hospitals provide unified support and resources such as IT health systems, hospital management and decision-making by the management team to develop according to local conditions. HCA affiliated hospitals requiring their development strategies to be closer to the needs of local hospitals. HCA that 'the company's core value is a subsidiary of each and every community. The value of it is from the area of vision, strategy and market prosperity created, not by the company of marketing, brand strategy, advertising means or stereotyped predatory strategy to bring. ' In its corporate culture 'Our mission, first and foremost concern and improving the quality of human life, in this knowledge, the struggle to provide quality and effective health care services in the communities we serve', but also a clear indication of the company strive to serve the community for the mission. To do this, HCA has established the following development strategy: first, to increase the utilization of its subsidiaries (namely branch hospitals); second, to ensure that all hospitals to provide patients and physicians beyond its expectations of high-quality services; and Nike Pepper Shoes third, the introduction of new services and attract physicians to further develop and implement regional strategies; Fourth, strengthen strategic partnerships with other non-profit hospitals and for-profit companies in a particular area; the fifth, and the state governments to negotiate and resolve all remaining issues ; sixth, the creation of a high-quality advisory panel to support modeling, negotiations and implementation of agreed peace; seventh, willing to reject not conducive to the public peace; eighth, assess and try one to two media-oriented service organizations (MPSO). HCA through economies of scale, mergers and acquisitions, cost control and provide high-quality medical services strategy to build a patient, doctors, government, and shareholders of the Quartet to win. The nature of the interests of patients first medical industry is to provide patients with high quality services, to save lives or reduce suffering. HCA captures the essence of the industry, that is, under the principle of the supremacy of the interests of patients, low-cost way to provide high-quality service. Hospital revenue depends on two factors: First, Nike Air Force 1 the number of patients (inpatient and outpatient); the second is patients with an average level of charges. In the case of fee levels tend to the industry average, in order to increase hospital revenue only by winning more patients. Good medical services and their reputation is an important foundation to win the patient, even more so, especially in the medical services industry conditions the United States. HCA was founded at the beginning, positioned to deliver beyond the expectations of patients with high-quality services. Its management believes that the clinical quality of service is not only conducive to attract talented doctors to join, more direct impact on the medical treatment option for patients. To do this, HCA at improving service quality spared no expense on investment, including the recruitment of excellent doctors, hospital information system upgrade and the purchase of advanced medical equipment. HCA to improve the quality of medical services, from 2006--2010 year cumulative investment of about $ 7.5 billion to improve the hardware facilities and information systems. Moody's Investors Service (Moody's) health-care director Lisa Bond Rating • Goldstein (Lisa Goldstein) that 'better control can enhance the efficacy of the hospital's financial performance, focusing on the efficacy of the strategy could lead to higher market share, better ability to recruit and retain doctors, nurses, lower vacancy and turnover, and better financial performance. ' At present, the Moody's rating for debt issuance hospital when the hospital attaches great importance to the clinical outcome measures. Medical services constant pursuit of quality, so HCA in the US medical community has won high reputation. March 2010, HCA in the US CMS Quality Assessment in Clinical core composite score of 98.4 points, 95.3 points higher than the average, among the Nike Shoes ranks of the nation's leading health care organizations. 2010 Florida Hospital Quality top 15 hospitals, HCA occupies 13; former Colorado hospital quality rankings 15 hospitals, HCA has six hospitals on the list. Meanwhile, HCA also has a very high patient satisfaction, more than 90% of the patients said, 'if need be hospitalized again, will choose HCA Group's hospital.' 2009 HCA Air Jordan 2 occupancy rate of around 53%, higher than the two competitors CHS and THC. Located in Louisville, Kentucky (Louisville) The American Hospital Directory Company believes that the hospital consumer health care provider assessment survey plan (Medicare's Hospital Consumer Assessment of Healthcare Providers and Systems survey) in patient satisfaction scores and profitability of the hospital was positive related to hospital by providing higher quality health services to achieve higher profit margins, companies often operate better customer satisfaction. More incentives for doctors to implement high-quality medical services, not only from the advanced equipment and first-class information systems, medical technology is more dependent on strong team of doctors. HCA with its strong financial strength, provide physicians with advanced, easy to operate medical equipment, as well as comfortable and convenient working environment, and establish a medical database to support the development of the medical profession on these initiatives greatly enhanced the enthusiasm for the work of doctors and initiative. More critical is, HCA equity incentive and provide adequate space for doctors governance. Equity aspect, HCA invite doctors to become shareholders of their affiliates, these investments include hospitals, mobile surgical centers, diagnostic institutions, home care agencies, and institutions of rehabilitation and physical therapy. As of February 11, 2011, common shareholders of HCA's 669 corporate shareholders one, more than the rest of the management and business backbone to grant incentive stock options. Low obtain insurance in favor of the United States, federal and state governments, employers who pay for health care is a major market. The federal government provides federal health insurance (Medicare), is 65 years old or above, but less than 65 years of age suffer from some disabled persons and persons of any age with permanent kidney failure to provide health insurance. The state government to provide state medical aids (Medicaid), for people with limited income and assets, and families with health insurance. Employers for their employees to buy health insurance business accounted for the bulk of the medical service market, the insurer bought by employers, insurance companies and medical institutions in the settlement. In 2010, HCA's earnings configuration, Medicare 30.5% of their income, Medicaid accounted for 10.2%, employer-provided commercial insurance accounted for 53.7%, only 5.6 percent from individuals to pay (Table -6). Accordingly, recognized by the Government and the insurance agencies is the key to the success of HCA. Thanks to large-scale and fine management, HCA cost of treatment was significantly lower than the industry competitors, which makes the HCA has won a long-term stable cooperation between government and insurance agencies. Compare America's top three profit chain of medical institutions can be found, the hospital size and charges negative correlation (Table -7). HCA's largest treatment lowest, followed by CHS smaller scale, the smallest of THC highest paid. Low-cost HCA has won recognition from the government and make insurance institutions and continued support, which is key to the success of the company. HCA hospital site closer to community-based, easy to patient medical treatment, which is one of the reasons the US healthcare agencies and residents recognized. Companies in the beginning of creation, focus on improving the quality of community health care across the United States. To do this, HCA developed a greater focus on the needs of patients with branch hospital close to area development strategy, and that the company's core values that each subsidiary and every community. By the end of 2010, HCA a total of 164 community hospitals in 21 states throughout the United States and England, which is located in Florida and Texas have 74 community hospitals. Low fee levels and community-based layout makes HCA in a good position in the future of health care reform in the United States. Currently, high-income, low efficiency and unfair to have become the three long-standing US health care system. To this end, US President Barack Obama's health reform program was to promote the House by March 2011. The core of the health care reform program is to achieve 'full coverage' and 'low cost', that Air Jordan 1 is, through the appropriate government intervention to achieve coverage for low-income and unemployed persons universal health care, and by adjusting the structure of health care spending, cut unnecessary expenses, improve health care the efficiency of the system. Therefore, with a cost advantage of HCA naturally will become the new health reform beneficiaries. In fact, HCA focus on the layout of the Florida and Texas due to the lower income level, will be to promote universal coverage of key areas. Investor interest focused on a significant scale. HCA growth history is a history of the hospital expansion acquisitions, particularly in the early stages. Size of the company is derived from endogenous expansion, mergers and acquisitions and equity. In its heyday, HCA also operates manages 463 hospitals. After the spin-off company through restructuring and business scale has decreased, it is still the nation's largest HCA hospital chain group, regardless of the number of the hospital's revenue size, or are beyond the second, third of the total. Select the quality market. HCA capacity in the market into the fast-growing areas are concentrated, such as population growth rate is higher than the average rate of the region, as well as commercial insurance and a relatively high percentage of Medicare coverage area (commercial insurance and Medicare is relatively good payer) are companies The focus of the market. Focus on developing core hospital. HCA strategically most resources into the core, the higher profitability of the hospital. HCA currently operates in all the hospitals, the former profitability ranking hospitals 15 (only 9% of the total hospital number) income accounted to 28% HCA's total revenue; profitability of the hospital before 40 (the number of companies accounted for hospital 25%) of revenue accounted for 50% HCA total revenue. Strong cost control. HCA adopt flexible employment policies, try to drive down labor costs. HCA main medical staff not its employees, but under contract of part-time staff. By the end of 2010, HCA total medical staff 19.4 million, of which 4.8 million are part-time. In 2010, HCA labor costs accounted for operating income ratio of 40.7%. HCA through self Group Purchasing Organization (GPO) Health Trust, not only for the group itself, but also for third parties to provide the necessary clinical and non-clinical equipment procurement services, improve the bargaining power of upstream suppliers. Health Trust now has 1411 members and 4713 members of the hospital clinic, the total annual purchase of $ 18 billion. Meanwhile, HCA avoid unprofitable services such as disease research and physician training services, will not bring the patient into the public revenue or public welfare hospital for the hospital. HCA these measures are an effective measure to enhance the level of profitability. In addition, HCA also accumulated on the basis of long-term business, to achieve the Combination, involving malpractice insurance fields. This is not only beneficial to maximize HCA improve capital efficiency, while providing $ 50 million Accident Insurance (Industry Average of $ 5,000,000) for the practice of each case is more conducive to maintaining harmony between doctors and patients.