For Multinational Health Care Companies

Topics: Health economics, Health care, Universal health care Pages: 23 (8006 words) Published: January 19, 2013
Lethbridge Globalization and Health 2011, 7:19


Open Access

Understanding multinational companies in public health systems, using a competitive advantage framework Jane Lethbridge
Background: This paper discusses the findings of a study which developed five case studies of five multinational health care companies involved in public health care systems. Strategies were analysed in terms of attitude to marketing, pricing and regulation. The company strategies have been subjected to an analysis using Porter’s Five Forces, a business strategy framework, which is unusual in health policy studies. Methods: This paper shows how analysing company strategy using a business tool can contribute to understanding the strategies of global capital in national health systems. It shows how social science methodologies can draw from business methods to explain company strategies. Results: The five companies considered in this paper demonstrate that their strategies have many dimensions, which fit into Porter’s Five Forces of comparative advantage. More importantly the Five Forces can be used to identify factors that influence company entry into public health care systems. Conclusions: The process of examining the strategic objectives of five health care companies shows that a business tool can help to explain the actions and motives of health care companies towards public health care systems, and so contribute to a better understanding of the strategies of global capital in national health systems. Health service commissioners need to understand this dynamic process, which will evolve as the nature of public health care systems change.

Background Multinational company involvement in public health care systems has been evolving since the late 1980s/ 1990s, with the introduction of compulsory competitive tendering for services such as catering, cleaning and facilities management services. For some companies, this formed the springboard for involvement in formal public-private partnerships for capital projects [1]. However in these two phases, the multinational companies were more likely to be service, property and finance companies, rather than health care companies. More recently, healthcare multinationals have started to become involved in public health care systems as providers of health care [2]. This paper explore the processes involved in this development, which can be argued in Correspondence: Principal Lecturer, Public Services International Research Unit (PSIRU), The Business School, University of Greenwich, UK

another variant of public-private partnerships-or even a further stage in a typology from marketisation to privatisation [3]. This paper aims to explore how a group of health care multinational companies have become part of several national health care systems over the last decade. The characteristics of this group of new global players are varied and reflect the national origins of many companies. They include experience of delivering acute, mental health services, and care services for older people to public providers at national levels, vertical integration of renal care services, and high technology care. Much of the expansion has taken place in Europe, during the last decade. The expansion of renal care companies and high technology care is a more global expansion. Expansion into older care services is beginning to have a global impact in countries with an ageing population. Understanding this process of integration into public health systems will help to provide insights into the

© 2011 Lethbridge; licensee BioMed Central Ltd. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


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doi:10.1186/1744-8603-7-19 Cite this article as: Lethbridge: Understanding multinational companies in public health systems, using a competitive advantage framework. Globalization and Health 2011 7:19.
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