Micro and Macro Environmental Analysis of the Health Care Sector in the US and France - Potential Opportunities and Threats

Essay 2007 22 Pages

Business economics - Offline Marketing and Online Marketing



1. Introduction

2.1 Environmental Analysis – USA
2.1.1 The macro environment
2.1.2 The micro environment Customer Analysis Competitor Analysis Collaborator Analysis
2.2 Environmental Analysis - France
2.2.1 The macro-environment
2.2.2 The micro Environment Consumers Analysis Competitor Analysis Collaborator Analysis
2.3 Comparison

3. Standardisation vs. Localisation

4. Conclusion



1. Introduction

The following paper will outline the marketing environments for private healthcare in the US and France. After an environmental analysis considering the macro and the micro environment, strength and weaknesses as well as potential future opportunities and threats will be analysed for both countries.

The author will focus on the insurance sector in private health care in order to provide a focused and narrowed down overview.

In order to understand the topic, a definition of the terms ‘private’ and ‘public’ is given. The Government of Canada (2007) states, the “in general, ‘public’ refers to government involvement, while ‘private’ may refer to involvement by businesses, charitable organisations or individuals.” An illustration is given in appendix one. However, it must be mentioned that private and public are not separate entities, as they are often linked together and closely related. Thus for example, governments sometimes regulate private sector involvement.

2.1 Environmental Analysis – USA

In general, it can be said that the view on the US health care system is one of the most controversial one’s in the world. On the one hand, some people argue it is ‘the best health care system in the world’ due to high-tech facilities and freely available medical sources, but on the other hand it can be argued that the system is highly inefficient as the country spends more than any other country on health care but sill has high proportions of uninsured and uneven quality. (Lalasz, 2007)

The US health care system offers both, private and public insurers, but the private element dominates over the public. Public Health insurances, financed by the federal income taxes, are for example Medicare which covers individuals aged 65 and over, or Medicaid, covering low-income and disabled people. Additionally, there exist several other public systems, like S-CHIP, the State Children’s Health Insurance Program, designed for children whose families make too less money to purchase private healthcare, but too much to qualify for Medicaid.

Furthermore, there exist the private non-group insurances or individual market for the people who are self-employed or retired. Contrasting to the group-market (employer-sponsored insurances), “the individual market allows health insurance companies to deny people coverage based on pre-existing conditions.” (Chua, 2006)

2.1.1 The macro environment

In order to analyse the macro environment and possible opportunities and threats, the private healthcare sector in the US faces, a PEST analysis was conducted, which incorporates “the political and economic, social (including legal and cultural) and technological environment.” (Hooley et al, 2004, p.94)

From the political point of view, it can be said that no real public insurance programme exists in the US for the majority of people. The government only provides coverage for elderly, needy or poor people in its insurance programmes Medicare and Medicaid. The majority of private health insurances are due to the common policies of employer-based private insurances. However, the financing of the US health care system is shared by the government and the private insurance companies, which can be referred to as ‘payers’, and therefore, defines the US as a ‘multi-payer’ system (see Figure 1). (Chua, 2006)

illustration not visible in this excerpt

Figure 1: Multi-payer system of the US

Source: Chua, 2006

The US healthcare costs in 2002 were divided in 44.9% as governmental expenditure and 55.1% from private expenditure.

Considering the economic environment, the US has, with 302.1 million inhabitants an almost remarkable growth of 2.2 % in GDP to a total of $ 13.98 trn, resulting in a GDP per head of $ 46,280 in 2006. (The Economist, 2006) Furthermore, it can be seen in figure 2 that the rate of personal savings is constantly declining, because people are spending their disposable income immediately, which on the other hand ensures sufficient purchasing power.

Figure 2: US Annual Personal Savings per Capita (1966 – 2006)

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Source: US Department of Commerce, Bureau of Economic Analysis, 2006

Figure 3: Public and private expenditure on health in US $ per capita

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Source: OECD Factbook 2007, Environmental and Social Statistics

As it can be seen in figure 3, the US is way ahead of the next highest pending countries in terms of total health spending per capita. (OECD Factbook, 2007) It spends 15 % of GDP on health care. With a total spending of $ 5.635 it was more than twice of the average OECD countries. Private insurance accounts for 37% of total health spending.

Regarding employer-sponsored insurances, it can be mentioned that these are financed by both, the employer and the employee. However, “in 2005, the annual private employer-sponsored insurance premiums averaged $ 4.024 for a single coverage and $ 10.880 for a family of four.” (Chua, 2006) The premiums are in fact increasing and employer-based insured Americans have to bear a greater proportion of premiums as “employers find themselves unable to keep up with such rapidly growing health benefit costs.” (Euromonitor, Healthcare insurance in the USA, 2005)

According to the Euromonitor (Healthcare insurance in the USA, 2005), the US market for health insurance grew by 11.2% by 2003 with a value of $ 200.7 bn in 2004. The largest but also most dynamic sector was PPO (Preferred Provider Organisation), accounting for 55 % of sales in 2004 and grew by 107.5 % from 2000 till 2004. The PPO contract with an insurance company in order to offer the customer discounted rates. Generally speaking, the private health insurance market is forecasted to grow by 80.2. % from 2004 till 2009, to a total value of $ 361.6 bn. This is partly due to the increasing medical expenses and thus the rising premiums the companies have to require. Hence, it seems unavoidable that the government presents solutions in a long-term view.

Concerning the socio-cultural situation it can be mentioned that Hispanics are the group with the most uninsured people (32.7 %), followed by Blacks (19.7%) and Asians (16.8%), compared to 15.7% of total uninsured. Furthermore, young adults between 18 – 24 years represent also a high proportion of uninsured (31.4 %). (Euromonitor, Healthcare in the USA, 2005) Additionally, the life expectancy over the past 40 years increased only by 7.3 years, compared to 14 in Japan and 8. 4 years in Canada. (Chua, 2006)



ISBN (eBook)
ISBN (Book)
File size
545 KB
Catalog Number
Institution / College
University of Sunderland – Faculty of Business and Law
75 % - A
Environmental Analysis Micro & Macro Environment Insurance Sector Private Healthcare USA France Customer Analysis Competitor Analysis



Title: Micro and Macro Environmental Analysis of the Health Care Sector in the US and France  - Potential Opportunities and Threats