OPPapers.com

Medical Products Inc.

Medical Products Inc.: Developing New Products for the Twenty-First Century

Synopsis

MPI markets medical products and services as well as offers medical support products to its customers. In the mid 1970s, the growth of MPI was the highest attained by any corporation. MPI build a reputation in the field for building high quality products coupled with professional field sales and customer support. New products had to be developed for MPI to stay competitive and profitable in the changing medical industry. But due to the change in the medical equipment industry, MPI had to consider environmental changes that would shape in the future.

MPI entered the 1990s as one of the world's leading suppliers of electronic management, communication and information systems for hospitals, medicals clinics and other health care facilities. Throughout its 30 year history MPI's medical customers were typically medium sized to large hospitals. The 1990s had brought a radical transformation of the manner in which medical care in the U.S. was provided. With medical costs out-pacing inflation by almost four to one, the pressure to control costs mounted. Managed care or health maintenance organization (HMOs) was the primary vehicle used to control these costs.

HMOs integrate the functions of financing and the delivery of medical care. The primary that an HMO uses in controlling costs is its method of reimbursement, which shifts most of the financial risk to providers (doctors and hospitals). Certainly the rise of HMOs coincided with the 1990s slow down of health care costs. Clearly, some of the sectors of the health care industry were winners or losers. It appeared that HMOs efforts to hold down medical costs had relied primarily on three factors which were shifting services away from hospitals and doctors, decreasing funding for technology and research, and shifting services to out patient centers. The great unknown in the future of the health care industry was the role of...