Healthcare Industry In Malaysia

health c be Indus purify In MalaysiaHealthcargon effort in Malaysia is divided into secret and macrocosm sectors. Malaysian society aspires importance on the expansion and uprisement of health billing manufacturing. With a rising and aging population in Malaysia, the Government wishes to reform some a(prenominal) aras in health c atomic number 18 pains including the refurbishment of breathing hospitals, building and outfit sweet hospitals, expansion in polyclinics, and benefits in training and expansion of telehealth.Telehealth is the preservation and communicate of health-related go and instruction via tele talks. It could be as simple as two health c atomic number 18 professionalfessionals discussing unhurrieds precedent over the teleph ane. It similarly whitethorn as sophisticated as doing robotic surgery amongst facilities at contrasting soil. altogether over last few course of instructions, we have ontogenyd our efforts to improve the telehe alth establishments. at any rate that, telehealth also pull up s photographs facilitate in bell of admission to distinctiveness operate for unpolished tolerants and al pocket-sizes the patient to stay in their own community rather than traveling. This is t e truly(prenominal)y with our mission and objective of deliver timberland healthcare operate to our customers expeditiously. government activityal factors admit government regulations and legal issues. It defines both formal and informal rules which a hospital mustiness ope kick per unit. Some examples of political issue are task policy, employment laws and medical examination exam checkup touristry. Medical tourism in Malaysia ranks among the outstrip in the world and most mystic hospitals in the realm have internationally do itd fictional character and standards in medical tourism. In our coun undertake, the twistth rate of medical tourism is evolution rapidly be prepare of low- court usefulness and the improvement of parvenue juicy- tonus healthcare service go outrs equal to rough outside hospital.The healthcare sector in Malaysia is mettlesomely regulated by the Private Healthcare Facilities and Services Act and regulatory approval is ask to goodish deal up a snobbish hospital. It regulates all sequestered healthcare facilities and serve in our coun yield. Under this act, we must get the approval before a saucily private healthcare facility give the axe be established. Government confine the strict rules on the quality of care and safety on patient to ensure that fairness and truth in providing health care to patients. The objectives of the rules are same with our objective of to fork out quality healthcare service with fairness, honesty and earnestness for patients.Political and government rules whitethorn furbish up any ancestry either positively or negatively. So, the changing of government rule or regulation in healthcare pains may cause some t eensy-weensy t erroneous beliefs on KPJ as we are part of it. Actually, it is considered as a affright for KPJ as it may require us to change our parentage strategy due to changing of regulations. It may affect negatively on the undefiled industry as intimately as KPJ healthcare.In budget 2012, government has assigned around RM15 billion for operating expenditure. Simultaneously, they allocated RM1.8 billion for organic evolution expenditure. With the allocation financial support by government, the health industry in our country pass on be enjoying the benefits. therefore, our healthcare industry pass on be issue forth industrious by improving the facility or equipment within hospitals. Eventually it deport increase the level of customer satisfaction as we bear put up weaken quality healthcare services and our reachability allow for be improved.EconomicEconomic conditions for a country are mainly in fluenced by political and government policies. This mean that any d ecision made by government go out indirectly affect the stinting conditions of the whole country. The economic growth in Malaysia has dropped signifi nookietly and KPJ should be aware of this factor. This is because economic condition depart affect KPJ in terms of operation and profitability.Customer expendable income and purchasing force ordain decrease as economic is non performing well. During economic crisis, necessitate most of the customer may try to mow down some expenses on healthcare much(prenominal) as medical splinteringup. Instead of choosing a best healthcare provider, customer directly which is bell sensitive depart much(prenominal) prefer on semipublic hospital that able to provide services to customer with lower price. in that respectfore, it is classical for KPJ in setting an appropriate and lower price to gain securities industry share.During the economy crisis, it is usual for the KPJs shareowner to divest their entire share because they may r efuse to take any put on the line of losing their money. When at that place is having substantial shareholder divesting their share, KPJ may pretermit of capital available to expand the business organization and it volition difficult for KPJ to enclothe in unseasoned technologies which can service to slightness patients. collect to insufficient of capital, KPJ may losses rivalrous profits compared to competitors. In hostelry to gain a combative advantage that could gain a bureau to all the consecrateors, KPJ need to evaluate the cost and benefit for all the expenses and to cut down the unnecessary overhead and expenses such as personnel cost at the same time, which could result in layoffs. However, layoff employee volition lead healthcare professionals who are already lack of time to do their cipher to be overworked since they pull up stakes be expected to do much than work compared to before. Therefore, healthcare professionals volition spend less of time and care for more patients than ever. Due to this, healthcare professionals may become negligent in some grand part and medical error, which can result in an increase in malpractice lawsuits.Inflation in Malaysia is affecting the overall cost for KPJ. This is because inflation pull up stakes push up the material price and also price of get the medical equipment. Other than that, employees for KPJ volition try to negotiate for higher salary. all these factors pass on increase the cost of KPJ in running their business activities. Therefore, KPJ profit margin bequeath be lower as KPJ require to feed more income in paying additional expense.Competitive RivalryPreviously, private practice was just in general practice and there are only have limited number of specialisers. But over the years, there have some changes in healthcare industry structure. Not identical previously which hospitality business is mainly from governgenial hospital. Today, there is increasingly maturation of profit oriented private hospitals. There are a few private hospital which opens in major town and cities in our country.Growth in the industry and increasing number of competitors exit inevitably increase the rivalry for KPJ. However, due to the limitation of 20km distance requirement in the midst of private hospitals recommended by Ministry of Health, direct rivalry among private healthcare groups is bonnie non so significant. Thus, even though there are numbers racket of private healthcare groups competing each former(a) in Malaysia, the rivalry among real firms is considered medium.Although 20 km govern is restricting the competition, rivalry is still system grievous factors to be considered by KPJ. This is because aggressive expansion and competition from existing players such as Parkway and Columbia Asia may hurt KPJ by affecting profitability and also the market share for KPJ. Therefore, it is important for KPJ to develop a better strategy to gain more competitive advantages against rivals.It is lack of differentiation of KPJ because KPJ and separates hospital is providing similar word or services to patient. This will be a holy terror for KPJ as low differentiation cause patient to have low switching cost. Patient may easy switch to parvenue(prenominal)s hospital which they destiny or they feel confidence with it. Nevertheless, low differentiation also means patient will be more priorities on the price of the treatment or services. There will be creating the price competition among existing rivals to attract customers. Therefore, setting lower price on the services provided big businessman earn better competitive advantages against rivals. Moreover, customer service is also an important area which KPJ competing with rivals. Customers will be more prefer to a hospital which able to provide better quality and customer services. Hospital which able to provide speedy and innovative methods in fulfilling customer needs will be the sources of competitive advantages.Besides that, engineering science for healthcare industry is also the factor which KPJ need to consider. This is because of medical advances and specialty services have been driving a strong trend towards private hospitals specializations with more of the industry players are growth a significant competition for niche areas of expertise such as coronary care, eye surgery, mental health care and maternity admissions. It is will be good if KPJ developing a niche areas which distinguish itself with other existing competitors. As KPJ can build up a good genius in particular(a) area, customer loyalty can be conducted and thusly KPJ might not need to lower down the cost to attract customer. hold but not least, intensity of competition between KPJ and others hospital will affecting the profitability and market share of KPJ. Therefore, KPJ should develop and identify a good strategy in station to create sustainable competitive advantage in order to compete w ith existing rivals.SocialNowadays, sense of social on healthcare is raised compared to past as a result of the rising in income and education level of citizens. This will lead to the increases in the demand of good quality healthcare services provided. This will enhanced the development of healthcare industry and therefore increase our industry profitability as well as our KPJ profitability. Hence, our KPJ mission of provide quality healthcare services to customer may be achieved with the development of healthcare industry.As there are more and more concourse having the high level of education, they will more concern on the issues of their body health as they have more knowledge. They also will try to hope the treatment for their healthcare problem as fast as executable due to the awareness on health issue. For example, they will constantly go to hospital either by themselves or bring their family for body check to ensure that they are under a health condition.Besides that, the increases in the income level of society will make them sham toward good quality of healthcare services provided. The stable of economic growth in the country will enhanced the income level of society. That will enable them feel more affordable to spend in private healthcare services which are able to provide more quality healthcare services compare to public healthcare services and this directly drive the society move to private healthcare services.Increases in the percentage of getting some distemper in the society also have impact on the development of healthcare services. Drug abuse and drug addiction issues are make up a big problem in Malaysia, there are increases in abuse of a drug called Ecstasy by Chinese teenagers and youths and this will lead to the increases of HIV/AIDS in the country. The increases of the number of foreign workers that come from rural areas or poor countries will bring diseases wish tuberculosis, bride flu or dengue fever to Malaysia. Then, stressf ul lifestyle like the twitchs sur showcase in the work place will cause high-blood pressure and the risk of getting hearth attack will increases. Besides, the bad habit in the consumption of foods such as alcohol and tobacco will increase the risk of chronic conditions like diabetes, hypertension and cardiovascular diseases. The recent reports of issue Health and Morbidity survey show that 15% of Malaysians are grave which increases 1% from year 2006 to 2010. Almost half of adult Malaysians are overweight. Besides that, breast cancer is one of the main reasons of death in Malaysia as it is common type of diseases among women according to the National Cancer Registry Malaysia, 2002. These factors will give positive impact to the healthcare sector in Malaysia.Furthermore, growing in ageing population in Malaysia also will help in drive the healthcare sector in Malaysia. Malaysias population grow at 2% p.a. and the percentage of the population over 65 years old is expected to rise from 5% to 8% from 2010-2020 regarding to Global Demographics. The growing of older proportion in the population means that there will be increase in age-related disorders like Alzheimers, high blood pressure and heart-related ailment which require long term treatment and rehabilitationReasonably, all these factors can be considered as big opportunities of expansion for healthcare industries such as KPJ which has the mission of provide quality healthcare services to customer. In order to achieve the mission, KPJ with its goal of providing healthcare services with fairness, honesty and sincerity should be done so that they can expand their services more widely as demand of quality healthcare services seen to be increases in future.TechnologyTechnologicalfactor is very important for all type of business, including our healthcare industries. Greater awareness about the technology will help KPJ improve theirefficiency of business operation and quick resolution to the changing environme nt.Healthcare industry needs technology to help them carry out their operation activities more efficiently and effectively.Advancement in IT is enabling KPJ to improve the quality of medical activities provided by them. Healthcare industry need to make a lot of medical records about their patients information.Ifit is done by base record, there are not much storage place to store all the information and will increase the rate of missing important information. To resolve this problem KPJ has follow the Electronic Medical Record (EMR) to reduce the administrative work and error. This is a digital record which can help KPJ to hold all the dilate information about their patients and patients medical history in the system. When a patient enters this system, information can be easily exploreed by the officer compared to paper work. KPJ will then be more efficient in qualification the diagnostic and therapeutic decision to reduce the unnecessary work and in straitened circumstances(p) time. Properly managing the patients medical history is very important.If a mistake occurs, it will lead KPJ to make wrong decision in medical treatment for the patient.It may also curseen the life of their patient.Other than that, KPJ needs the IT system to help them to enhance in the familiar process by establishing an internal network system. IT can act as a mechanism of communication between nurse, rectify and other people who are qualified to access the information system to get the necessary information and information is unendingly updated by using internet. These also help to improve activities of exchanged information between stakeholders. For example, announcement make by internal hierarchy can be quickly received by worker within KPJ by using the internal network system. In addition, doctors can easily place their orders to the nurse, the nurse can then respond quickly to the order and without error due to written order being clearer than oral order.KPJ required a lo t of medical facilities to help them in the process of providing the medical services, the required facilities include MRI scanner, CT Scanning. Without the high technology medical facilities, KPJ may not be able to provide a good care service to patient, because recently medical service has become more reliant on the technology. A good medical facility may help to reduce the time of medical treatment.Technology factor plays an important affair in the healthcare industry.So, KPJ should invest more in the RD to enhance their medical skill and also help them easily change the administrative work to reduce the mistake and error occur that will affect the reputation of their company.Porter five forces panic of new entrantsThe threat of new entrants is the disaster that a new firm will enter the industry. It is a threat for existing business as new entrants will affect the business and inevitably cause existing business to lose profit or market share. Nowadays, there are many potentia l investors trying to invest in healthcare service, thus, causing existing business intheindustrytoface the threat of the new entry.Inorder to exclude new competitors, it needs to create a restriction to the entry. However, KPJ may not have to face the new competitor come in because it is hard for a new healthcare business to enter the industry due to the high initial cost. Before starting the healthcare business, it requires to do necessary research, intensive planning and require a huge summate of initial capital to purchase the facilities, research and development, specialist equipment in order to operate the business. Besides that, to be a medical tourism hub Malaysia has to set a goal requiring all the institutions to use medical devices and procedures.Comparing the other industry and healthcare industry, normally the barriers to enter in healthcare industry are quite high.Itis because of restrictions by government policy. From the past to the present, all the private medical facilities in Malaysia need to get approval to be given under the Private Health Facilities and Services Act 1998 before they can be established and must be compliant to a regulatory body working closely with the Ministry of Health who monitors, regulates and coordinates these hospitals. Moreover, it is heavily government regulated, which is zoning for healthcare industry. The act requires having a minimum distance of 20km between the existing healthcare industries. This means that when one decides to open a new healthcare business, it must make sure there are no other healthcare businesses within the 20 km area. Some more, to prevent the new competitor to enter the market, government restrict the hospital to acquire the healthcare technology, without the specialist equipment that is hard for the private healthcare to survive in the future. shortage of doctors is also a factor which is creating the high barriers of entry. When potential competitors come in, they must make sure th ey have enough medical practician and doctor to carry the routine task. This is because if they dont have all those qualified staff, they might face difficulties in providing services to patients. Moreover, potential customer will only cull to go for a hospital which has specialist in particular areas. Therefore, shortage of specialist doctors will also cause that hospital to lose marketshare. encumbrance in securing private specialists will be the barrier for entry to all the new competitors. As the put out of private specialist is limited, hospital groups with a strong reputation will have better advantage in attracting potential specialist against the new hospital.Record of patient is a priceless asset for the healthcare industry it can create a barrier to entry. KPJ have records of patients who have come before and maintained the medical records in one system.This system enables the doctors to have knowledge of their patients medical history. Because all the patients records are already exists in the hospital, therefore, it will cause inconvenient for patients to regurgitate their medical history to a new doctor. Therefore, it will be hard for the new entrant to compete with the existing healthcare industry.Threat of fill inThreat of substitute means that consumer are available to buy another produce or service that can provide similar benefit to replace our industrys product. Product demand will be affected by price change of substitute product and service. Therefore, threat of substitute for healthcare industry is considered to be low.The threat of substitute for private healthcare provider will be the non-profit healthcare provider. Private health care is normally charge higher medical fees compared to public hospital. Because of this, some people might not be able to pay for the dear(predicate) fees. KPJ is a private healthcare provider that provides a lot of medical service and use medical facilities to enhance their medical skill. Purchases of the medical facilities are considered very expensive because it is high technology equipment designed by professional person and to develop it will use many resources to carry out the necessary research and development activities. For non-profit healthcare provider, most of the funds is come from sponsor, therefore it may be lack of capital to acquire the facilities and equipment. Private healthcare as a profit-oriented company will be easier in raising capital, so private healthcare service will have better competitive advantages against non-profit organization as they is owning the higher technology equipment and medical facilities.Second threat for KPJ is the unexclusive healthcare provider which is supported by government. People often acquire the private healthcare providereven when the service provided will be more expensive is because the services providedis more efficient than public where patient needs to turn back for a long time. Private industry is more focused on e fficiency and effectiveness todeliver the service to customer, so private healthcare provider will employ more doctors and nurses to carry out the service that are of quality.Another substitute for private healthcare could be the acupuncture, massage and spa, many old people are more reliant on and believed in this traditional service, but it is lacking of proves by science and not so safe. Many traditional servicesare promoted as an entertainment service rather than proficient medical service that is provided in legal healthcare company. Sometimes the services provided can be illegal and may be a threat to the patients health. For nowadaysmany people are knowledgeable, they will refuse the traditional medical and chose the more scientific service and that relates to high technology, so the threat for this traditional services is considered low.In healthcare industry, technology acts as a strong substitute to their service, such as e-health. E-health brings a lot of convenient to t he patient that are busy and people that lack easy access to hospital they will be helped by telemedicine. For example,the success story of e-farmasi in Malaysia, computerizing Medical Claims in Korea, and others. Due to insufficient development, this threat to hospital will be low.Therefore, threat of substitute on the private healthcare will be very low. But KPJ still need to plan out the strategies to face the threat of substitute due to economic and environment change that will affect the profit of KPJ.Bargaining Power of BuyersCustomer is one of the sources of profit for a business. It is important for a business to understand what customer needs, and their go down in bargaining with our business. Bargaining world power of customers is considered to be high for healthcare industry. This is because there is having many medical centers in Malaysia. Customer will have the freedom to bring whatever healthcare company and doctors which they feel confidence with. heights power of customer will be a threat for the business as it will be increase competitive intensity in the industry.Most of the hospital in Malaysia is providing similar treatment or services to the patient. This means that it will have a low differentiation between hospitals. Therefore, switching cost for customer will be low and hence customer can easily switch between alternatives healthcare company to get a better deal.Buyers income is also the factors which affecting the bargaining power of buyers. If their income is low, probably they will be more preferred on public hospital as public hospital will able to provide services to patient with lower prices. However, if some of the customer who is having higher income, they campaign to be low price sensitive. They will more prefer on the best healthcare providers which can deliver better services to them alternatively of looking at the price. This group of customer will switch to other healthcare providers when they not satisfy with the serv ices provided.Since KPJ is providing healthcare services to people who are struggling with life-threatening diseases, reputation for KPJ will be an important factor to be considered. In addition, buyers is now aware of alternative supplier and information of healthcare is freely available for the public, therefore KPJ need take care their performance and also quality which deliver to patients. Once patients recognize that KPJ performance is not good or poor quality of services, it will cause patient to switch to other healthcare providers which is more honorable in terms of quality and performance.Availability of substitute for healthcare industry will affect customer power in bargaining with KPJ. As there are having substitutes which is public healthcare, acupuncture, massage and spa. Customer may try to switch for substitute as this will be their alternative methods if they dont want to go for private hospital. Therefore, in order to protect against substitute, it is important for KPJ creating and play up the value and let customers to know the differences between their services and the others.Bargaining power of supplierproviders is playing an important roles in a business. They is the person who render all the materials, services and things which required by an industry. KPJ is relying on many different types of supplier which support biotechnology development, drugs development, supplying medical equipment, and also specialist doctor.Suppliers who supply medical equipment are considered as important suppliers for KPJ. Medical equipment is essential as KPJ is using all the medical equipment in their daily trick activities. However, technology advancement has made a lot of changes for medical equipment. There are a lot of new and updated medical equipment which come with better features. All these latest equipment will helps KPJ to improve their efficiency and effectiveness in carry out their routine job. However, there are having limited sources of s upplier in supplying all these medical equipment, which creating limited opportunities for KPJ to buy the equipment. There are many buyers for all those medical equipments but only a few dominant suppliers. Due to this, suppliers may have substantial nub of power in negotiating with KPJ in terms of pricing and supply conditions. Supplier may set higher price but there is no room for KPJ to negotiate with suppliers.Medical practitioner is also one of the suppliers for KPJ. KPJ needs qualified nurses and specialist doctors to treat their patients. Therefore, bargaining power of medical practitioner is considered high. Having a group of qualified employees will be the sources of competitive advantage for KPJ against competitor. However, there is shortage of specialist doctors in Malaysia. This will cause the competition among hospital in employing qualified specialist. Most of hospital will try their best to award the specialist by offering higher salary, bonuses. If KPJ choose not to be competitive against the competitors, medical practitioner will search other healthcare industry to work. Hence, specialists doctors will be in the best position in negotiate the working conditions and also the pay structures.In terms of drugs development, KPJ is rely on a few supplier which provide them with specialized tools, materials, and equipment that they need to develop their products. Special tools to develop the drugs will be quite technical and lack of substitute products. This mean it will be high switching cost for KPJ to use another suppliers. If suppliers stop supplying, KPJ will face difficulties in their development progress. Therefore, supplier for all those special tools, materials will carry a higher power in negotiate a better price or delivery conditions.Overall, the supplier power is considered to be high as KPJ is relying on a few major suppliers to supply the things which KPJ needed in their daily job. Therefore, it is important for KPJ to maintain a good relationship with all suppliers to ensure the business process goes smoothly.Factor conditions radical factor for KPJ is capital availability, KPJ has enough profit to contribute for their capital for control or globalize their business. KPJ earned its rst annual billion-ringgit turnover in year 2007, with revenue totalling RM1.11 billion in that year. KPJ go alongd in achieve their new revenuerecords in subsequent years. Which are rising to RM1.27 billion, RM1.46 billion and RM1.65 billion in year 2008, 2009 and 2010respectively. KPJ achieved a new recordin 2011 with total revenue of RM1.91 billion and pre-tax prot of RM204.60 million.In elemental factors for medical tourism of KPJ, medical tourism products are better to located in warm, pleasant environments like Malaysia. Therefore, the elementary factorswhich include ideal climatic conditions, natural resources and geographic location, are an advantage for medical tourism in KPJ especially for those visitors from colder cli mates.In addition to these basic factors, there are innovational factors about skill labour In our country.KPJ healthcare had 750 medical consultants, which equals to a 7% share of private doctors in Malaysia and 47% of the countrys medical personnel and professional.This is because of the better paid of salary.Another mod factor is KPJ are driven by innovation and technological advancement.There is a strong regulatory and hospital and healthcare infrastructure in KPJ. KPJ slide bys to invest in the latest equipment with state of-the-art medical technology.This type of technology will help in provide positive patient experience as well as to enhance medical and surgical outcomes.Last pass on factor is we are assisted in the development of medical tourism. These include the world-wide web resources for the communication and marketing of the medical tourism product internationally. In terms of quality, it can be said that there is just little difference in the medical tourism serv ices offered in the advanced western countries and those in the eastern or developing countries like KPJ in Malaysia. But the attractive work conditions and higher salary has helped to staff ourKPJ hospitals with qualified people. Therefore, the quality of such healthcare services are equivalent and the services may better compare to the hospitals in developed countries. engage conditionsDemand conditions are one of the important factors for KPJ in order to gain competitive advantage within the industry. Demands in home country enable KPJ has a better understanding in the needs and desires of the customers thus can response faster to take advantage before the foreign competitors. Therefore, KPJ need to continue to improve competitiveness through innovation and high quality services.Malaysia is one of the fastest-growing nations in Asia although our country has a small population of only 29m.Malaysias population has grew from 23.5m to 29m from 2000-2010 with a CAGR of 2.2%. KPJ need to increases the quality of services provide like bowdlerize the waiting time for patients, provide comfortable place for patients to stay like hygiene condition to meet the increases in demand. Besides that, KPJ need to continue to invest in the latest equipment with state of-the-art medical technology in its effort to provide positive patient experience as well as to enhance medical and surgical outcomes in order to retain as well as attract more customers and strong the position of KPJ in private healthcare industry.Then, the development of health tourism is bestow to curative services by private healthcare services providers. For instance, 450,000 foreign patients obtained treatment from private hospitals for various illnesses as well as utilised diagnostic and therapeut