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Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

Case Study SWOT Analysis Solution

Case Study Description of Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments


Explains how managed care organizations use capitation as a payment method for providers.

Authors :: Regina E. Herzlinger, Thomas Nagle

Topics :: Finance & Accounting

Tags :: Corporate governance, Financial management, Health, SWOT Analysis, SWOT Matrix, TOWS, Weighted SWOT Analysis

Swot Analysis of "Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments" written by Regina E. Herzlinger, Thomas Nagle includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Capitation Care facing as an external strategic factors. Some of the topics covered in Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments case study are - Strategic Management Strategies, Corporate governance, Financial management, Health and Finance & Accounting.


Some of the macro environment factors that can be used to understand the Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments casestudy better are - – there is backlash against globalization, increasing household debt because of falling income levels, there is increasing trade war between United States & China, increasing inequality as vast percentage of new income is going to the top 1%, supply chains are disrupted by pandemic , increasing government debt because of Covid-19 spendings, increasing energy prices, increasing commodity prices, central banks are concerned over increasing inflation, etc



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Introduction to SWOT Analysis of Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments


SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Capitation Care, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Capitation Care operates in.

According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.




SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix


SWOT analysis of Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments can be done for the following purposes –
1. Strategic planning using facts provided in Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments case study
2. Improving business portfolio management of Capitation Care
3. Assessing feasibility of the new initiative in Finance & Accounting field.
4. Making a Finance & Accounting topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Capitation Care




Strengths Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The strengths of Capitation Care in Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments Harvard Business Review case study are -

Ability to recruit top talent

– Capitation Care is one of the leading recruiters in the industry. Managers in the Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments are in a position to attract the best talent available. The firm has a robust talent identification program that helps in identifying the brightest.

High switching costs

– The high switching costs that Capitation Care has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.

Successful track record of launching new products

– Capitation Care has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Capitation Care has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.

Low bargaining power of suppliers

– Suppliers of Capitation Care in the sector have low bargaining power. Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Capitation Care to manage not only supply disruptions but also source products at highly competitive prices.

Operational resilience

– The operational resilience strategy in the Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.

Sustainable margins compare to other players in Finance & Accounting industry

– Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments firm has clearly differentiated products in the market place. This has enabled Capitation Care to fetch slight price premium compare to the competitors in the Finance & Accounting industry. The sustainable margins have also helped Capitation Care to invest into research and development (R&D) and innovation.

Analytics focus

– Capitation Care is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Regina E. Herzlinger, Thomas Nagle can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.

Learning organization

- Capitation Care is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Capitation Care is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments Harvard Business Review case study emphasize – knowledge, initiative, and innovation.

Effective Research and Development (R&D)

– Capitation Care has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.

Ability to lead change in Finance & Accounting field

– Capitation Care is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Capitation Care in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.

Training and development

– Capitation Care has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.

Cross disciplinary teams

– Horizontal connected teams at the Capitation Care are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.






Weaknesses Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis

The weaknesses of Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments are -

Interest costs

– Compare to the competition, Capitation Care has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.

Slow decision making process

– As mentioned earlier in the report, Capitation Care has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Capitation Care even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.

Need for greater diversity

– Capitation Care has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.

Skills based hiring

– The stress on hiring functional specialists at Capitation Care has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.

Slow to strategic competitive environment developments

– As Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments HBR case study mentions - Capitation Care takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.

Workers concerns about automation

– As automation is fast increasing in the segment, Capitation Care needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.

High cash cycle compare to competitors

Capitation Care has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.

High dependence on star products

– The top 2 products and services of the firm as mentioned in the Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Capitation Care has relatively successful track record of launching new products.

Employees’ incomplete understanding of strategy

– From the instances in the HBR case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments, it seems that the employees of Capitation Care don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.

High operating costs

– Compare to the competitors, firm in the HBR case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Capitation Care 's lucrative customers.

Low market penetration in new markets

– Outside its home market of Capitation Care, firm in the HBR case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.




Opportunities Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The opportunities highlighted in the Harvard Business Review case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments are -

Lowering marketing communication costs

– 5G expansion will open new opportunities for Capitation Care in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Finance & Accounting segment, and it will provide faster access to the consumers.

Reforming the budgeting process

- By establishing new metrics that will be used to evaluate both existing and potential projects Capitation Care can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.

Low interest rates

– Even though inflation is raising its head in most developed economies, Capitation Care can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.

Manufacturing automation

– Capitation Care can use the latest technology developments to improve its manufacturing and designing process in Finance & Accounting segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.

Building a culture of innovation

– managers at Capitation Care can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Finance & Accounting segment.

Increase in government spending

– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Capitation Care can use these opportunities to build new business models that can help the communities that Capitation Care operates in. Secondly it can use opportunities from government spending in Finance & Accounting sector.

Changes in consumer behavior post Covid-19

– Consumer behavior has changed in the Finance & Accounting industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Capitation Care can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Capitation Care can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.

Developing new processes and practices

– Capitation Care can develop new processes and procedures in Finance & Accounting industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.

Better consumer reach

– The expansion of the 5G network will help Capitation Care to increase its market reach. Capitation Care will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.

Loyalty marketing

– Capitation Care has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.

Leveraging digital technologies

– Capitation Care can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.

Using analytics as competitive advantage

– Capitation Care has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Capitation Care to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.

Remote work and new talent hiring opportunities

– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Capitation Care to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Capitation Care to hire the very best people irrespective of their geographical location.




Threats Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis


The threats mentioned in the HBR case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments are -

Learning curve for new practices

– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments, Capitation Care may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Finance & Accounting .

Increasing wage structure of Capitation Care

– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Capitation Care.

Stagnating economy with rate increase

– Capitation Care can face lack of demand in the market place because of Fed actions to reduce inflation. This can lead to sluggish growth in the economy, lower demands, lower investments, higher borrowing costs, and consolidation in the field.

Technology disruption because of hacks, piracy etc

– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.

New competition

– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Capitation Care in the Finance & Accounting sector and impact the bottomline of the organization.

Easy access to finance

– Easy access to finance in Finance & Accounting field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Capitation Care can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.

High level of anxiety and lack of motivation

– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Capitation Care needs to understand the core reasons impacting the Finance & Accounting industry. This will help it in building a better workplace.

Trade war between China and United States

– The trade war between two of the biggest economies can hugely impact the opportunities for Capitation Care in the Finance & Accounting industry. The Finance & Accounting industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.

High dependence on third party suppliers

– Capitation Care high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.

Shortening product life cycle

– it is one of the major threat that Capitation Care is facing in Finance & Accounting sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.

Capital market disruption

– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Capitation Care.

Regulatory challenges

– Capitation Care needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Finance & Accounting industry regulations.

Consumer confidence and its impact on Capitation Care demand

– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.




Weighted SWOT Analysis of Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments Template, Example


Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants. We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –

First stage for doing weighted SWOT analysis of the case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.

Second stage for conducting weighted SWOT analysis of the Harvard case study Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.

Third stage of constructing weighted SWOT analysis of Note on Managed Care Reimbursement of Health Care Providers: Case-Based, Per Diem, and Capitation Payments is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Capitation Care needs to make to build a sustainable competitive advantage.



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