Business model of HCA (Hospital Corporation of America)

Customer Segments

HCA Healthcare primarily serves the general consumer population, providing a range of healthcare, psychiatric, and rehabilitation services to sufferers of various conditions and acute health concerns.

HCA Healthcare receives payments for patient services from the federal government under the Medicare program, state governments under their respective Medicaid or similar programs, managed care plans (including plans offered through American Health Benefit Exchanges), and directly from patients. HCA Healthcare additionally receives payments from private medical insurers that provide health coverage to general consumers.

HCA Healthcare primarily serves patients in the US, where the bulk of its hospitals are located.  It also serves patients in the UK, through several medical facilities in England.

Value Propositions

HCA Healthcare provides value to its customers in the following ways:

• Professional and Experienced Medical Practitioners – HCA Healthcare seeks to differentiate itself from other healthcare operators in the US by offering consumers high-quality medical care from well-trained and experienced physicians, skilled clinical personnel, and other health care professionals;
• Efficient and Varied Healthcare Services – HCA Healthcare offers a broad range of healthcare services to patients suffering from a variety of medical conditions – including acute and chronic conditions, rehabilitation services, and psychiatric care – seeking to treat its patients quickly and efficiently;
• Extensive Network of Facilities – HCA Healthcare operates an extensive network of facilities across the US and in the UK, seeking to ensure that patients are able to access necessary health care services from within their communities;
• Cooperation with Government Programs – HCA Healthcare collaborates with US federal and state government bodies to ensure that consumers benefitting from medical aid programs can access high-quality care; and
• Name Recognition and Reputation – HCA Healthcare is one of the largest and most established for-profit healthcare operators in the US, with a positive reputation and established track-record for providing high-quality health care services to patients efficiently and effectively.

Channels

HCA Healthcare provides its services primarily through its network of health care facilities located across the US and in the UK. At 31st December 2017, this network included 179 hospitals – comprising 175 general and acute care hospitals, three psychiatric hospitals, and one rehabilitation hospital. The company also operates an additional 120 freestanding surgery centers.

In addition to its hospitals and surgery centers, HCA Healthcare also serves its customers through a network of outpatient health care facilities, freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, comprehensive rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices and others.

Customer Relationships

HCA Healthcare seeks to establish longstanding relationships with patients by providing high-quality, reliable, and efficient services across its facilities. The company instills trust through its workforce of qualified and experienced medical practitioners and clinical staff, who work closely with patients, providing treatment and advice, handling questions, and providing in-person assistance.

HCA Healthcare operates a corporate office through which it employs teams to handle its cooperation with federal and state government medical aid programs, as well as its collaboration with insurers. These relationships are handled by designated personnel who meet with relevant parties in person who communicate over the phone.

HCA Healthcare operates a website at www.hcahealthcare.com, through which it provides information to patients on a self-service basis. This information includes pricing and financial, the location of relevant facilities, information on the company and its employees, and information on its cooperation with government programs. HCA Healthcare also has a contact line through which patients are able to garner information directly from the company’s employees.

HCA Healthcare is additionally able to communicate directly with customers through its various social media accounts, including with LinkedIn, Facebook, Twitter, and YouTube, as well as through its own blog hosted on its website.

Key Activities

HCA Healthcare Company is a provider of medical services. Through its subsidiaries it owns and operates a network of hospitals and related healthcare entities. The company organizes its operations into two business groups organized geographically: the National Group, which comprises 84 hospitals located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia; and the American Group, which comprises 86 hospitals located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. The company also operates six hospitals in the UK, the operations of which are included in the company’s Corporate and Other business group.

Key Partners

HCA Healthcare, its subsidiaries, and facilities have established a range of partnerships in the US and the UK that are designed to ensure that patients have access to reliable and efficient care in their communities. The key partners include:

• Vendor Partners, comprising suppliers of medical equipment and consumables for use across the company’s network of medical facilities – including medical equipment manufacturers and distributors and drug companies – as well as third-party providers of corporate and medical services;
• Medical Program Partners, comprising federal and state-level governing bodies and programs, as well as other non-governmental organizations, that seek to ensure consumers have adequate medical coverage. This includes the US Medicare and Medicaid programs, as well health maintenance organizations and preferred provider organizations;
• Insurance Partners, comprising various leading medical and general insurance providers in the US and in the UK, that make their coverage schemes compatible with the services and facilities operated by HCA Healthcare; and
• Joint Venture Partners, comprising companies and organizations that work closely with HCA Healthcare, operating certain facilities or projects in partnership.

Key Resources

HCA Healthcare’s principal resources are its network of medical facilities, its medical equipment and infrastructure, its suppliers and supply chain, its personnel, its partnerships, and its IT infrastructure. The company’s reputation is particularly dependent on the quality of the care it provides. As such its teams of medical practitioners, clinicians, and administrators are key in maintaining the company’s profile as a reliable are provider.HCA Healthcare’s network of hospital and outpatient facilities are also a vital component of its business model. The company currently operates 179 hospitals and 120 surgery centers across the US and the UK.

Cost Structure

HCA Healthcare’s principal costs relate to the purchase and distribution of medical supplies and equipment, the payment of salaries and benefits to its workforce, and the payment of property and general utility costs – including water and electricity. In 2017, the company’s largest cost was in the form of salaries and benefits, which totaled more than $20 billion for the year. HCA Healthcare also incurs costs concerning the maintenance of its IT and communications infrastructure, the management of its partnerships, and the procurement of external services.

Revenue Streams

HCA Healthcare generates revenue through the provision of medical care and health services to patients in the US and in the UK. Specifically, the company’s revenues depend on inpatient occupancy levels, medical and ancillary services ordered by physicians and provided to patients, volume of outpatient procedures, and the charges for such services. The company receives payments directly from patients, as well as from the federal and state government medical aid programs, managed care plans, and private insurers.

In 2017, HCA Healthcare generated revenue for the year totaling $43.61 billion. The company’s American Group accounted for revenue of $20.91 billion, while its National Group accounted for $20.77 billion. The remaining revenue was attributed to the Corporate and Other group, which includes the company’s UK operations.