There are numerous factors in an organization’s macro-environment that naturally affect manager’s decisions. New laws, tax changes, demographic change, government policy and trade barrier changes all have an impact on an organization. This paper analyzes the political environment, economic, social, technological, legal and environmental environments of health care industry in Ontario.
It is evident that there is a growing political pressure on healthcare authorities across provinces. For instance, currently, the Ontario’s government health care stands at 42% of the total program spending. Equally, due to the state’s political stability and the likelihood of an increase in health care costs, the health care is likely to rise to 50%. Health care thus has the opportunity to stand at 50% since healthcare costs currently grow faster than other areas of government spending. With the establishment of the Local Health Networks (LHINs) and the legislative authority, Ontario is presented with an opportunity to effectively decentralize its health systems (World Health Organization, 2008). Stability of the political environment promises excellent environment to many marketplace entrants.
Conversely, the introduction of a decentralized LHIN model is a threat to effective healthcare provision. Basically, it is likely to influence the mechanism of funding and delivery. The new model requires organizations to adapt different approaches to service delivery and funding across the decentralized boundaries. However, many organizations still have inadequate infrastructure.
The government reports in Ontario shows an increase in healthcare expenditure despite the existence the global economic crisis. The state’s strong currency makes easier importation of healthcare products from foreign markets. Similarly, the economy shows positive recovery from the economic crisis. This is likely to boost the growth of national income. In particular, it gives room for the growth of homecare by the private sector. This is demonstrated by opening up of home care among the elderly by private sector. Indeed, it still presents a key business opening in Ontario. Likewise, to effectively provide healthcare services to the elderly, organizations have the opportunity to form mergers and acquisitions so that enough capital required by the health care industry is raised.
The major threat is however the increasing cost of labour in Ontario. This greatly affects the provision of health care services to the increasing number of elderly people. It implies that organizations with smaller amounts of capital my not provide the healthcare services better since health care industry requires high cost of capital. New enterprises intending to venture Ontario need to put in place systems, processes and structures to support cost containment and improved productivity. These economic pressures have resulted into increased growth in strategic buying groups who force down prices (Benjamin, et. al., 2011).
The significant increase in ageing population in Ontario presents a lucrative opportunity. First, it presents ready demand for medicines and healthcare services. The Ontario’s ageing population promises significant increase in health care demand since a person’s health care services significantly increases after the age of 65. According to Ontario Ministry of Health and Long-Term Care, (2012), the largest amount of spending on health care services usually occurs within the last years of life. In fact, with the projection of the doubling of the ageing population by 2030, healthcare service provision specifically for the elderly is an opening for many healthcare providers.
However, there is a threat posed by the ageing population. It perceived that in twenty years time, there will be unequal income distribution in Ontario. This is likely to affect the demand of healthcare services in the future since there are no youth to will be going to work. Similarly, there is a likely deficit in labour pool. Organizations are likely to incur higher costs while outsourcing health care experts.
Digitalization, standardization, de-tethering mobile networks, nanotization and bio genomics are just to mention a few of technological advancements that seem to offer potential shift in provision of health care services. The market for home monitors is expected to grow from the current $500 million to more than $5 billion in ten years (Ontario Ministry of Health and Long-Term Care, 2012). Ageing service device technology is on the rise. All these technologies have the potential of transforming giving home care to the aging population. The current challenge to new entrants is the high cost of adopting technologies since most systems and services are provided by the private sector. New entrants into the marketplace should consider new funding models since new technology pose the risk of creating an economic divide with high-income population getting access to more benefits.
Ontario ministry of labour is placing increased focus on increasing workplace compliance with the requirements of Occupational Health and Safety Act (ASHA) and standards. Therefore, the comprehensive legal framework for organizations established by Ontario presents organizations with an opportunity to competitively bid for health care service to the aging population. Also, the health and safety laws formulated by Ontario government ensure that all companies must provide the required health care service to their employees (CNC News, 2009). This basically opens opportunity for healthcare providers to effectively offer healthcare to the state’s employees’ hence larger demand. There is also opportunity to serve any niche market since there are laws that permit fair competition and distribution of products (Goldstein, et. al., 2007). However, Ontario’s comprehensive legal environment may be a stumbling block to many organizations who do not comply with the all legal requirements of the industry. New entrants in the marketplace which do not equip themselves with occupational health and safety responsibilities under OSHA on their duty of providing health care services to the aging population may find it difficult to enter the industry (Ontario Ministry of Health and Long Term Carr, 2010).
There is growing awareness of environment protection and the key stakeholders are becoming more aware of the being proactive in this field (Goldstein, Groen, & Ponkshe, 2007). In addition, there is increased community awareness on importance of environmental conservation. The Ontario government is introducing new legislation that will give healthcare professionals wider power (CNC News, 2009). New entrants in the marketplace need to ensure that their market and business plans are in line with environmental issues. Businesses therefore have the opportunity to incorporate environmental agenda and aggressively engage themselves in corporate social responsibility. Also, organizations are able to flourish on condition that they make use of eco opportunities in the market place. Such initiatives include safer disposal of used products and constant usage of environment friendly products. Businesses also have an opportunity to undertake green marketing. The major threat is however the higher costs that corporate social responsibility and green marketing come with. New market entrants must thus allocate aside larger amount of capital for maintaining the environment.
Benjamin, K., Edwards, N., Guitard, P., Murray, M., Caswell, W., & Perrier, M. (2011). Factors that Influence Physical Activity in Long-term Care: Perspectives of Residents, Staff, and Significant Others. Canadian Journal on Aging. 30(2), 247-258.
CNC News (2009). New legislation in Ontario will give health-care professionals wider powers. CNC News. Retrieved 16 October, 2012 from http://www.cbc.ca/news/health/story/2009/05/11/ontario-health.html
Goldstein, D. P. J., Groen, S., & Ponkshe, M. W. (2007). Medical Informatics 20/20. Jones & Bartlett Publishing Co.
Ontario Ministry of Health and Long Term Care. (2010). The Excellent Care for All Act. Retrieved 16 October 2012, from http://www.health.gov.on.ca/en/ms/ecfa/pro/legislation/
Ontario Ministry of Health and Long-Term Care (2012). Retrieved 16 October 2012, from http://www.health.gov.on.ca/en/
Pollock, G., Newbold, B., Lafrenière, G. and Edge, S. (n.d)Perceptions of Discrimination In Health Services Experienced By Immigrant Minorities In Ontario. Retrieved 16 October 2012, from http://www.wlu.ca/documents/48207/discrimination_%26_health-final.pdf
World Health Organization (2008). Climate Change and Health. Retrieved 2 October, 2012 from, 2012 from http://www.worldwatch.org/node/5659