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KMID : 0950020050310010015
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Journal of Health Science & Medical Technology
2005 Volume.31 No. 1 p.15 ~ p.29
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Bankruptcy Situations and Competitive Strategies of Korean Small and Medium Hospitals
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Choi Man-Kyu
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Abstract
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The internal and external environment of the hospital has unfavorably changed in the last several years. That is, there has been a separation of dispensary, review reinforcement on health insurance claim, increase of fixed costs such as personnel cost and managerial cost, increase of medical specialists resigning a present position to open own clinic, lower health insurance fee as compared with consumer price index, institutional inertia of inter-hospital collaboration under medical care delivery system, a excessive tax burden, unification of medical diagnosis fee and prescription fee, credit card payment of medical expenses, and so on. In such difficult situation, many small and medium hospitals which have not properly coped with request of the change have been bankrupted. The rate of bankruptcy has showed over 10% on an average in these seven years. As the reasons mentioned above, most of small and medium hospitals are going through financial difficulty. The function and roles of small and medium hospitals are closely related to the medical welfare of residents as well as the economic effect in small and medium cities. Therefore small and medium hospitals should set up managerial strategies for strengthening their competitiveness in the given situation in order to survive and develop in community. In that respect, this study aims to grasp bankruptcy situations of small and medium hospitals and to suggest managerial strategies for strengthening their competitiveness. This study makes a suggestion the following nine strategies for existence and development of small and medium hospitals. Those suggestions are as follows ; This is, the establishment of the customer(patient)-oriented circumstance ; curtailment of expenditure such as personal(labor) and managerial expenses ; TQM(total quality management) of medical services ; introduction of business renovation techniques such as business re-engineering, the construction of the medical information system, benchmarking, out-sourcing, and so on ; reorganization of the existing hospital setups ; introduction of remuneration system depending on the performance ; an active and aggressive marketing and improvement of hospital image ; the activation of inter-hospital collaboration systems ; the establishment of transparency in hospital business such as decision making processes and operating behaviors especially related to money ; vision business in the long-term viewpoint. Small and medium hospitals must realize that they may not be able to survive unless they implement the above suggestions. For a successful application and practice of above suggestions, it is important for CEO of small and medium hospitals to have a innovative business mind. And the government have to support for activation of medium and small hospitals.
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KEYWORD
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small and medium hospital, bankruptcy, competitiveness, strategic business
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