Political Factors

The Political impact on the healthcare industry performance changes

because of the changing government regulations.

The political factors like changing tax laws, employment regulations,

consumer protection laws and insurance mandates can impact the
healthcare industry.

In addition to this, changes in the importing policies of drugs as well as

strikes of health experts because of irregularities in salary are core political
issues that affect healthcare companies.

Economic Factors
Unemployment, interest rates, credit availability and inflation are economic
factors that affect healthcare industry performance and operation.
For example, increasing interest rates may fail many investors in the health
sector.

Social Factors
Socio-cultural factors focus on issues like gender preference, aging
population, reduced fertility along with beliefs, values and norms that a
particular customer segment holds. It is very important for organizations to
determine the culture of their consumers so as to avoid violation of values
and beliefs.
For example,

The increasing level of obesity amongst the population and the health
risks associated with it is another point of concern. People are now more
inclined towards eating lesser artificial sugars or processed chemicals.

People are now more informed. There is a great change in their

expectations and now they have become more demanding. Hospitals and
healthcare professionals can benefit from these changing and progressive
trends.

Technological Factors
Resourcefulness and novelty stand at the heart of technology.
Technological advancement in the healthcare industry can affect the
performance of key players.

Medical companies are engaged in healthcare distribution as well as

healthcare technology solutions.
Environmental Concerns
Healthcare organizations should constantly improve their methods of
disposing waste. Specifically, the aim is to meet population’s concerns
about the environment. Therefore, they should include such measures into
strategic planning.

Legal Factors
taxation laws are that affect healthcare organizations.

Should davita even try?

BEFORE MAKING THE DECISION WHETHER DAVITA SHOULD TRY
OR NOT, HERE ARE THE
Risks that davita should consider which MAY negatively impact its business in the
future
1. reduction in government payment rates under the government-based programs,
2. the impact of disruptions in federal government operations and funding,
3. changes in pharmaceutical pricing,
4. legal compliance risks
5. The company’s ability to maintain contracts with physician medical directors,
changing affiliation models for physicians, and the emergence of new models of care
introduced by the government or private sector.
6. the risk that they might invest material amounts of capital and incur significant costs
in connection with the growth and development of the international operations
7. the risk that reductions in reimbursement rates that may negatively impact davita’s
business, revenue and profitability,
8. the risk that HCP may not be able to successfully establish a presence in new
geographic regions or successfully address competitive threats that could reduce its
profitability,
9. the risk that a disruption in HCP's healthcare provider networks could have an
adverse effect on the business

Is it worth the risk of merging? Will it actually be successful?

 Acquiring dialysis centers and businesses that own and operate dialysis centers,
as well as other ancillary services and strategic initiatives has been DaVita’s
preferred business strategy over the past several years.
 Expanding sizes and numbers of clinics and centers is the root of expanding
revenues . More clinics means more machines sales, more services provided and
more patients attracted.
 Acquiring clinics instead of building ones by Davita can be seen as a wisely cost-
saving strategy.
 By this merger, the company can increase its total outpatient dialysis centers by
145, and in the first half of 2013, DaVita can be able to acquired 11 centers and
open 45 centers in the U.S. It also can also acquire and open 13 centers outside
the U.S.
 Its Merger with HealthCare Partners will support and augment the company’s
primary care and specialty physician services as well as hospital and other
healthcare services.
 This merge will bring about a network of 667,000 patients and 700 physicians
under DaVita’s umbrella, better positioning the company to deal with uncertain
changes in Medicare industry in the future.

And that brings us to the end. Thank you so much for your attention.