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The US Healthcare Industry Is Huge. But, Is There Space For You?
Over 5000 hospitals and 700,000 physicians are part of the trillion-dollar health care industry of the US. The US is known for its expensive healthcare services. CMS stats show that healthcare expenditures account for 17.9% of the US GDP. Most healthcare companies in the US work at mega-scale and earn high profits. However, things are not favorable for the small scale healthcare business. In general, small healthcare providers are struggling hard to survive in this competitive industry. There are 8 common challenges that you are up against.
8 Things Limiting The Growth Of Your Small Healthcare Provider Business
1. Difficulties in Acquiring Advanced Technology
Small healthcare businesses usually work with limited financial resources. These limited resources make it challenging for you to use advanced medical equipment and practices. The US has the highest (40%) share of the global medical device industry. This segment of the US healthcare industry is expected to grow even more at a faster pace. But the incorporation of the latest medical devices is still daunting (and expensive) for small healthcare providers in the US.
2. High Cost of Business
Small healthcare businesses are impacted by high operating and administrative costs. Also, high prices of medicare and healthcare discourages patients in seeking treatments, unless their symptoms are severe. Healthcare providers like chiropractors, nutritionists, and sleep technicians are most likely to suffer. People in the USA are most likely to find DIY solutions for less severe medical ailments.
3. Lack of Investment in IT for Healthcare Industry
Acquisition of information technology is of significant importance to the healthcare industry. Healthcare providers can cut down the high operating cost of their services by using management software. They can save and retrieve their data within a few seconds. Management of patient history and financial accounts reduces the recurring cost of clerical staff. However, professional software with excellent features is often too costly for the small business owner.
4. High Pharmaceutical Costs
Along with the high healthcare costs, the US is also infamous for high pharmaceutical prices. For instance, Insulin prices increased up-to 138% and 270% during 2005-2016, respectively. High insulin prices compelled most patients in the US to buy cheaper insulin from Mexico. Similarly, a price hike of pharmaceuticals can be observed in other medications High pharmaceutical prices are most likely to direct the influx of patients to other countries where medication is cheaper. This affects the business of small scale healthcare providers negatively.
5. Regulatory Changes in the Healthcare System
Regulatory changes affects small healthcare providers adversely. Every new healthcare law or regulation brings with it new standards of eligibility for small healthcare businesses. Most healthcare providers are required to make significant changes in their system according to new laws. These regulatory changes are not cost-friendly. For example, getting an expensive new medical license or equipment may become the reason for the exit for a small scale healthcare provider.
6. Lack of Professional Help
The high pay scale in the US results in the inability to hire and retain skilled workers at prices a small business can afford. A study by National Health Care Retention and RN Staffing reported the highest employee turnover (18.2%) in the healthcare industry of the US. Due to low earnings, small healthcare providers cannot pay reasonably to their staff. Moreover, the underpaid staff keeps on hunting better opportunities.
7. Consumer Behavior and Reputation Management
The Internet is the most significant influencer of the 21st century. According to survey results, 72% of consumers search for medical information through the Internet. Furthermore, 50% of medical inquiries are aimed to find new physicians and their reputations. With the emergence of platforms like Google My Business and TrustPilot, it has become crucial to spend on reputation management. Unfortunately, small healthcare providers often ignore this. Random reviews with low ratings decrease their revenue. This makes it even more challenging to survive.
8. Inadequate Insurance For Healthcare Providers
Working in the healthcare industry is both emotionally and physically demanding. Smaller healthcare providers are especially vulnerable. In a country where lawsuits against healthcare providers are becoming more commonplace, you could face malpractice claims. Don’t add the cost of paying claims to your list of business challenges. These costs could put your small healthcare business out of business. Liability insurance for healthcare providers is coverage that gives financially protection when courts award patients financial damages. However, insurance for healthcare providers must also include coverage for accidents that happen in a small business. Insurance coverage must cover things like theft and property damage.
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