PESTLE Analysis of the Hospital Industry

This research is related to understanding the hospital industry of Australia. A strategic cost analysis has been done to find out the factors that increase the strategic cost. PESTEL analysis has been done to know about the impact of various political, environmental, social, technological and legal factors. The main output of the report would be to identify all the social, political, economic, legal and technological factors of the Bethesda hospitals from the Australian hospital industry which may affect its business performance and strategic planning in long run.

RUNNING HEAD: PESTLE Analysis of the Hospital Industry 1
Strategic Cost Management
Contents

PESTLE Analysis of the Hospital Industry 2
Executive summary-....................................................................................................................................3
Introduction-................................................................................................................................................3
Description of the business.........................................................................................................................4
The vision of Bethesda hospital...............................................................................................................4
The mission of Bethesda hospital............................................................................................................5
Core values of organization.....................................................................................................................5
Research Analysis.......................................................................................................................................5
PESTEL analysis of Bethesda Hospital..........................................................................................................6
Recommendation........................................................................................................................................9
Referencing-..............................................................................................................................................11

PESTLE Analysis of the Hospital Industry 3
Executive summary
This research is basically related to understanding the hospital industry of Australia. A
strategic cost analysis has been to find out the factors that are not material and the same results in
increasing the strategic cost. There are many factors that influence the working or operations of
an organization. It includes both production factors and environmental factors. PESTEL analysis
has been done to know about the impact of various political, environmental, social, technological
and legal factors. There are so many hospitals in the industry that are in competition with each
other. Due to that, a competitive analysis has been done to know the strengths and weaknesses of
the competitors. Data has been taken from several government publications related to market
share, trends, growth, and demand for products and services in the market. There are different
government policies of the Australian government that also creates an impact on the cost
management at the organizational level. The main output of the report would be to identify all
the social, political, economic, legal and technological factors of the Bethesda hospitals from the
Australian hospital industry which may affect its business performance and strategic planning in
long run. The Comprehensive and rigorous PESTEL analysis has been implemented to evaluate
the influencing factor of Bethesda hospitals from the Australian hospital industry
Introduction-
With the changes in economic and complex business structure, each and every
organization is using effective strategic planning method. However, the strategic planning for the
organization is highly based on the social, political, economic, legal and technological factors. It
is observed that Strategic cost management is a wider term with wider aspects that refer to
reducing total costs and increasing total value of the business or strategic position of the
business. To achieve that strategic position, an organization needs to find out the importance of
each cost. They have to identify that which cost is important to the organization that actually add
to the profits of the business and which cost is weak in nature that can be avoidable in nature.
This report focuses on the hospital organization and proper Pestle analyses have been taken to
evaluate the business performance and quality of the services offered by the organization. In this
report, Bethesda hospitals from the Australian hospital industry have been selected. This hospital
business and other factors will be assessed in this report to determine its strategic performance

PESTLE Analysis of the Hospital Industry 4
and business situation in the Australian hospital industry. This Australian hospital industry is a
broad industry that is really achieving good growth. If they have to decrease their strategic costs
then they need to do a proper analysis of the competitors and several factors that affect the
operations of the organization.
Description of the business
Bethesda hospital is the very renowned private surgical hospital that provides treatment
of many diseases to their patients like urology, Gynecology, plastic surgery, pain management
and general surgery. It is located in Queensland. Major competition for Bethesda hospital is the
other general hospitals that are providing same facilities to their customers at a cheap rate.
Galindo Martin & Nissan, 2010). These hospitals are Royal Adelaide hospital, The Royal
Melbourne Hospital, and Princess Alexandra hospital. Bethesda hospital was found 125 years
ago. They provide acute- level health care to their patients as well as treat injuries and illness
also that has a long-term effect. In case of long-term acute care patients, the treatment is divided
into two parts. Firstly they provide hospital-level care to the patients and afterward rehabilitation
care has been given to them. They support their patients in social, mental, psychological,
spiritual and physical needs. (Ansari, 2010)They provide special care to the patients who are
suffering from neurovascular conditions, respiratory illnesses, complex medical problems and
physical and behavioral disabilities because these diseases need special care. Further medical
treatments and behavioral management have been done to them. This hospital has been gaining
momentum throughout the time by using its advance treatment care services. However, the main
focus of the company is to deliver the best level of treatment for the patients and consistently
increasing their satisfaction level.
The vision of Bethesda hospital
The main mission of the hospital is to build an effective hospital program for the patients
suffering from neurovascular conditions, respiratory illnesses, complex medical problems and
physical and behavioral disabilities.

PESTLE Analysis of the Hospital Industry 5
It has also developed facility dedicated to physician training program with the state of art
technologies. It will give a new opportunity to the students to learn advanced and new training
program for the patients care.
The mission of Bethesda hospital
It has the mission to develop a people-centric district health service in the Bethesda
catchment area where everyone could grab equal access to quality and comprehensive district
health services.
Core values of the organization
The core value of Bethesda hospital is accompanied by following factors such as open
communication, advance treatment, innovative technologies and commitment to performance to
render best patients care services (Moro Visconti, 2016).
Research Analysis
`There is a trend of Globalization and due to that; the competition within the industry is
getting tougher. In hospital industry of Australia also, a lot of competition exists. There are so
many technological changes and because of that, every hospital has to create new technological
advancement into hospitals also (Etienne, et al. 2014). In Australia, the general hospital is on its
growth stage. Funding of public hospitals has been done by state and federal governments and
private hospitals generate their funds from the health services provided to patients and patient
fees. It has been noticed that in some past years, the number of patients has been increased due to
the quality of services they provide and some of them have opted for membership under private
health insurance. The revenue of the whole industry was $52.9 billion; the number of workers
was $13000. Employment opportunities in hospital industry are also increasing in the country.
(Chung, Gaynor and Richards-Shubik, 2016)
There are some other services too like there is an administrator in the hospital who is
always presented in the hospital. There is a common desk number on which he is available to the
patients and their families. They have an ATM machine in their hospital to provide convenience
to the customers. There are some special services too like valet parking, internet access, financial

PESTLE Analysis of the Hospital Industry 6
assistance, and barber. These are the recent industry benchmarks as these services are provided
by all the other similar hospitals. There are various suppliers for the industry who provides basic
hospital things to the hospitals. There are some medical equipment companies who produce
several machines. So they provide all the necessary equipment to the hospital. (Campbell, 2017)
However, with a view to analysis, all the external factors of the Bethesda hospital proper
PESTEL analysis have been implemented. This analysis will assist in identifying all the
influential factors which Bethesda hospital could undertake before formulating the business
strategies.
PESTEL analysis of Hospital Industry
PESTEL analysis refers to the analysis of the political, economic, social, technological and legal
system of a country in concern to a particular industry or any organization (Nolan, 2015).
1. Political factors- There are different political factors that can hamper the operations of hospital
industry. There are many government policies in reference to the level of intervention in the
country. Sometimes government controls the supply of goods and raw material. In Australia, the
political environment is quite open and stable. It is important for all the hospitals in Queensland
to get the hospital licenses from Queensland Health Private Hospitals Regulatory Unit as they are
responsible to authorize the operations of the hospital. (McDermott, Cashore and Kanowski,
2011). However, after analyzing the political environment of Australia, it is observed that the
political situation of the country is too stable and it reflects positive indicator for the effective business
performance of Hospital industry. Australia is the independent nation that belongs to the
commonwealth (Benzi, and Mastroianni, 2016). The political condition of Australia is very
positive which may play a positive indicator for the Hospital industry for running their business
effectively. It is observed that hospital in the hospital industry could use these political factors to
improve its existing business and expand its business. However, there is the requirement to take
the renewal of licenses yearly. Each and every doctors and nurse working in the hospitals should
be qualified for their position. In addition to this, emergency services of the Hospital industry
will be provided to the patients for 24* 7 hours as per the government guidelines and rules
(Larkin, 2016).

PESTLE Analysis of the Hospital Industry 7
2. Technological factors- As per market research, it has been observed that there is a need for the
integrated healthcare system and easy accessibility of data. Data of the hospitals is confidential
and there is always a concern regarding the confidentiality, safety, and security of data. There are
many new technologies that have been come in past decade so it is necessary to adopt this
technology. There is a technique called cyber psychology that focused on to make clinical
change and infrastructure of technology parallel in hospital industry (Mohanan Nair &
Vijayachandran Pillai, 2009). It is observed that the people in Australia are more inclined
towards the advanced technologies. It is analyzed that the Hospital industry needs to adopt newly
advance technologies and machines in the patient care treatments. If hospital industry has
installed advanced technologies and system then it will increase the quality of the services and
advance work system of the organization. The changing pattern of disease and improvement in
medical and communication technologies are contributing to the momentum for a new approach
which ensures the responsive demand of the 21st century in the hospital and care industry. The
patients care for neurovascular conditions, respiratory illnesses, complex medical problems and
physical and behavioral disabilities could be treated by the advanced machines and treatments.
However, several other organizations such as Royal Adelaide Hospital, Melbourne hospital, and
other big hospitals are using advance international machines and technologies to treat their
patients. If hospitals in the Australia do not install advanced technologies in its hospital care
process then it may negatively impact its hospital care services. Nonetheless, the cyber
computing system is ideally used by the healthcare organization in the project management and
development of the data storage system of the clients (Boyes, & Aylott, 2017).
3. Environmental- There is a focus on Go Green as pollution has been released by many industries
that are really harmful (Igliński, et al. 2016). It has been suggested all the hospitals in Australia
need to use energy-efficient lighting and backup generators so they can be used at the time of
emergency. There are many initiatives has been taken by the hospital to create a common policy
for dumping the hospital wastes in an effective way because hospital waste is hazardous in
nature. The environmental situation of Australia is very positive and central Australia has the dry
climate which may result in increased number patients. The management of the hospitals in
Australia needs to implement proper strategic plans and procedure to mitigate the possible health
care problems and issues. The department of the environment of Australia has set up several
rules and regulation to maintain the clean environment. However, hospitals in Australia need to

PESTLE Analysis of the Hospital Industry 8
assess the factors and enlighten its business process and environmental programs. This hospital
has already taken the licenses and permits from the federal department of the environment for its
care services. However, the importing of drugs from the other country such as hazardous
chemicals and drugs will pass through after taking proper approval from the government
(Adewunmi, 2014).
4. Social – The social factors is determined on the basis of the values, belief, perception, and
outcomes of the patients in Australia. It is observed that the people in Australia are more inclined
towards the sophisticated and advanced technologies for their treatments. However, the
management committee of the hospital industry has been formulating the business process
management program with a view to satisfying patients' needs and increasing their satisfaction
level (Mohanan and Vijayachandran Pillai, 2009). The Wards developed X-ray machines and
operating theaters of the hospitals have been designed in such a way which could add value to
the treatment of the patients in an effective manner. However, with the strength of the 200 staff
members and more than 30 doctors' team, the hospital has formulated a proper health care chain
(Beserra, et al. 2017). Patients want to treat their diseases from the hospital that have expert's
doctors and highly advance technologies and machines in their healthcare process. All the
hospitals have developed the strong brand image in Australia for the treatment of neurovascular
conditions, respiratory illnesses, complex medical problems and physical and behavioral
disabilities and also earned a good value after the successful number of patient's treatment.
Hospitals in Australia seek to deliver its mission in the framework of strong faith-based value
and with the assistance of the dedicated staff team members it has been providing advanced
treatment for the betterment of the patients at large. Nonetheless, in Australia, Universal health
system board provides support to the patients for their treatment. Therefore, hospitals in
Australia have to set up the direct link with the Universal health system board for the
improvement of the existing work performance and increase the value of the patients by
rendering the best quality of the treatment (CHISWELL, COOPER, and PACKHAM, 2015).
5. Economical- As per the statistical data of Australia, the GDP of Australia per capital is 49,927.82
USD (2016) which is 2.7% higher as compared to last three year data. However, the GDP rate of
the country is 2.8% which reflects that purchasing power of the people in Australia is
consistently increasing their income and expenditure. Nonetheless, the public healthcare industry
has the overall turnover of the $192 billion in 2016 which is 5% of the overall GDP of the

PESTLE Analysis of the Hospital Industry 9
country (Gehanno, et al. (2009). It has been observed that all the hospitals in Australia have to
set up strong with the advancement of the technologies and effective healthcare treatment at
large. The growth in the health spending in the country is slowly but in context with the GDP
rate, it is consistently rising. As per the government data, it is observed that the government of
Australia contributing the ($44.4bn) to the health expenditure of the country. This shows that
Australian government is also endeavoring towards supporting patients to take their treatment
from the Australian public healthcare organization instead of tapping international hospitals at
large (Visconti, Doś, and Gurgun, 2017).
6. Legal factors- After analyzing the government statistical data, it is observed that with the
increased use of advanced technologies revolutionizing modern medical practice. Hospitals in
Australia are required to uphold high standards for protecting the patient’s privacy and
increasing the value of the patients. All the drugs imported by the hospitals in Australia from the
outside countries and machines needs be undergone from the healthcare department of Australia.
However, all the healthcare organizations need to comply with the Australian Information
Commissioner's Pound Road Medical Centre for the privacy of the data records of the patients.
It is considered that all the hospitals in Australia have complied with the all the applicable rules
and regulation while rendering the health care services to its clients (Hamdan, 2017).
Recommendation
 All the healthcare facilities in the hospital operations should have proper or appropriate
physical environment
 The proper advance communication cyber system should be used to implement proper
strategic plans to increase the overall outcomes and efficiency for the health care services
for the patients of the hospitals.
 Health facilities need well trained and motivated staff members’ who could provide 24*7
care services to patients.
 Setting measure for the quality and safety program which could track the progress of the
quality improvement of the health care services program of the hospitals.

PESTLE Analysis of the Hospital Industry 10
 All the hospitals in Australia should use proper Six Sigma five-phased process to
improve their existing health care program for the betterment of the patients care
services.
 Implementation of the protocol and adapting the organization culture and work system as
per the needs and demand of the patients.
 Setting strategic alliance with the government and other supporting bodies to promote the
patient treatment with the government intervention support.
 Set new norms and health care policies for the better treatment of the patients in
determined approach.
 Implementation of the cyber computing system and analytical work program to
implement proper health care functioning for the better and efficient treatment of the
patients in Australia.
 Hospitals need to the integrated healthcare system and easy accessibility of data. Data of
the hospitals is confidential and there is always a concern regarding the confidentiality,
safety, and security of data.
 Hospitals should follow common policy for dumping the hospital wastes in an effective
way because hospital waste is hazardous in nature.
 Proper arrangement and advanced technologies should be installed in the hospital
premises so that patients will not be asked to go outside for the further checkup and
treatment.

PESTLE Analysis of the Hospital Industry 11
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PESTLE Analysis of the Hospital Industry 12
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Appendix

PESTLE Analysis of the Hospital Industry 14