Intellectual Property and Entry Barriers, Essay Example

Health care firms utilize myriad assets and intangibles that help set their services apart from the rest of the competition specifically when considering the private health care sector.  For instance, Absolute Healthcare Services in Cincinnati, Ohio, and Caregivers for Independence in Hamilton, Ohio, are two small private healthcare firms that provide services to clients of all ages from young infants to the elderly.  Each company has its own unique assets that it utilizes to appeal to new patients and their families as well as in the arduous task of marketing their services for consistent patient referrals from doctors.  However, one of the greatest components that often make health care firms feel superior to other organizations are the multitude of intellectual property held and maintained by each company.  Finally, there are several nontraditional barriers that reduce competition to enter into the industry such as staff, monetary and social.

These two home health care organizations would clearly recognize several different types of intellectual property.  For instance, Absolute Healthcare Services has a trademark name on their organization.  Caregivers for Independence would have considered this a form of intellectual property; however, its company name is used by organizations in more than one state which has caused several legal and trademark disputes even leading to the organization being liable for another company’s debts with the same name.  Another form of intellectual property is the unique company logos used on all company brochures, internet and other various marketing materials (Stallman, 2010).  Both companies own the rights to their individually designed logos, which is common among the home health care industry.

There are several nontraditional barriers that can impact the opportunity for organizations to enter this industry.  For instance, home health organizations must not only meet several accreditation and certification criteria, but they must also have knowledgeable, experienced staff who are able to maintain these certifications.  Furthermore, when unfortunately negative events occur, the proper paperwork and notification processes must be filed by the organizational staff.  If these processes and paperwork are not completed properly, there are serious consequences and these consequences are large enough to keep companies from entering into the industry altogether.  Knowledgeable, experienced staff personnel are difficult to find and may also be difficult to afford for a small company.

This also shows that the nontraditional barriers of monetary supplies are crucial to limiting the number of companies and organizations that can enter into this industry.  Without having the appropriate monetary resources to afford staff, office and healthcare supplies, taxes and much more, a company may face the inherent entry barrier.  Home health companies are not always able to maintain a strong positive cash flow and billing is difficult to perform as well as to bypass billing errors through state, foundational and private insurance billing which greatly impacts a company’s financial positioning.  Nurse and health care services are definitely a business and with poor cash flows, it can place unfortunate stress on a company’s budget and ability to maintain normal operations.  This is one reason why many accrediting organizations will require that home health companies show positive financial resources and will not rely on a weekly billing to afford normal business operations.

A final entry barrier for this industry is the social relationships and connections necessary to build a client base.  Medical offices and physicians are solicited constantly to provide patient referrals to home health care organizations.  These referrals are difficult to come by without having connections with professionals in the field; connections that should be in existence prior to entering the industry.  Without these connections and relationships, a company will find it difficult to increase their overall number of patients which effectively reduces the profitability of the organization.  Any barrier similar to this that can have such a highly negative impact on a company’s operations should be highly considered before an organization attempts to enter any industry (Neary Consulting, 2009).

References

Neary Consulting Company (2009). Community building – barriers to entry. Proceedings of the Neary Consulting, http://dneary.free.fr/articles/Community_barriers_to_entry_checklist.pdf

Stallman, R.M. (2010). Did you say “intellectual property”? it’s a seductive mirage. GNU Operating System, Retrieved from http://www.gnu.org/philosophy/not-ipr.html