The US health care sector includes more than 780,000 hospitals, doctor offices, emergency care units, nursing homes, and social services providers with combined annual revenue of about $2 trillion. Major companies include Kaiser Permanente, HCA, Ascension Health, and Tenet Healthcare. The sector is highly fragmented: the top 50 organizations generate just 15 percent of revenue.
The sector includes about 6,500 general hospitals; 75,000 nursing homes and residential care facilities; 13,000 diagnostic labs; 30,000 outpatient clinics; 127,000 dentist offices; 220,000 doctor offices; and 150,000 family and social services providers.
Worldwide, health care expenditures total about $5 trillion annually, according to Swiss Re. Total health spending (both public and private) as a portion of GDP ranges from about 7 percent in countries such as Estonia to 17 percent in the US, according to the Organisation for Economic Co-Operation and Development.
COMPETITIVE LANDSCAPE
Demand for health care services is driven by demographics and advances in medical care and technology. The profitability of individual companies depends on efficient operations and, in the case of many nonprofit health care providers, obtaining grants and federal funds. Large companies have advantages in accessing the latest medical research, buying supplies, offering a wide range of services, and negotiating contracts with health insurers. Small institutions can compete successfully by serving a limited geographical area, offering specialized services, or building a local reputation for quality care. Health care is labor-intensive: average annual revenue ...
