Strategic Responses to Increased Competition in the Healthcare Industry; the Case of Private Health Insurance Sector
Abstract
Indeed, health insurance industry had experienced an unprecedented competition
especially in the unregulated private heath insurance sector. Although the insurance
is broader in perspective, this study was deliberately carried out to determine the
extent to which competition had increased in the private healthcare insurance sector.
The study was also geared towards finding out the strategic responses of the private
healthcare providers to increased competition in the industry.
Data was collected using both the open-ended and closed-ended questionnaires
administered by interviewing all the 14 firms in question. The data was further
analyzed using tables, mean scores, standard deviation and co efficient of variation.
The study revealed that majority of the firms interviewed changed their objectives,
vision, goals and mission statements for the past decade in a bid to increase market
share and improve quality customer service. This changes were also contributed by
increased competition where firms need to adopt to new environments in order to
survive and improve profitability.
The level of competition in the sector was very high with 85.7% of the firms
testifying to this, while attributing it mainly to price undercutting due to rising
healthcare costs.
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The study indicated that there exists an unexploited ability to pay for private health
insurance that requires to be changed into a willingness to pay. Therefore, one way
of achieving this is through public education on the benefits of health insurance and
the perils of being uninsured.
Generally, the study pointed out various strategic responses adopted by firms to
offer quality services to 'nowadays' sophisticated customer and increased
competition.
Citation
Lengopito FD,September 2004;Strategic Responses To Increased Competition In The Healthcare Industry; The Case Of Private Health Insurance Sector;Faculty Of Commerce University Of Nairobi.Publisher
University of Nairobi Faculty Of Commerce University Of Nairobi