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Molina Healthcare SWOT & PESTLE Analysis

ID : 52544353| Sep 2020| 15 pages

COMPANY PROFILE -Molina Healthcare

Business Sector :Healthcare

Operating Geography :North America, USA

About Molina Healthcare :

Molina Healthcare, Inc., is a thirty-eight-year-old Fortune 500 company based in Long Beach, California which provides managed health care services under the Medicaid and Medicare programs, through the state insurance marketplaces. It is serving to about 3.8 million members as of December 2018, through Medicaid, Medicare and other government-funded programs in about a dozen states in the United States and Puerto Rico. The business process outsourcing (BPO) solutions provided by Medicaid Solutions segment of the Molina Healthcare provides Medicaid agencies in six states for their Medicaid Management Information Systems (MMIS) and this tool is used to support administration of state health care entitlement programs. Founded by C. David Molina, he is the one who still controls the company through the holdings and trusts. The Affordable Care Act is the main reason for its extremely rapid growth. The strategic priorities including a focus on technology over the last five years have led to Molina’s rapid growth effectively, efficiently, and securely.
By the year of 2018, the two segments through which Molina functioned were: Health Plan and Molina Medicaid Solutions. More than 95% of its revenues comes from Molina's Health Plans segment and these health plans are provided by Molina make use of the medical services available through the state networks of contracted hospitals and physicians who accept it’s health plan coverage which are they are all licensed as health maintenance organizations (HMOs).The Medicaid programs with such offerings as IT development and business processing were administered by The Medicaid Management segment but later they sold this business to DXC Technology in 2018. Its other operations include Pathways, providing behavioral health and social services. Molina Healthcare is standing tall and offering its best to its customer by leveraging technology and automation and is expecting all of this to lead it to its desired growth path.
Molina’s mission as per its annual report is “To provide quality health care services to financially vulnerable families and individuals who are covered by government programs.”

Molina Healthcare Revenue :

Premium Revenue
US$ 17,612 million – FY ended 31st Dec 2018 (year-on-year decrease of 6.58%)
US$ 18,854 million – FY ended 31st Dec 2017

Competitive Analysis of Molina Healthcare

The SWOT analysis of Molina Healthcare is presented below:
1. Strong distribution network
2. Strong brand portfolio
3. Focusing on product innovation
4. Leveraging technological innovations like automation and analytics
1. Gaps in Product Range/Services
2. High turnover rate
3. Poor product demand forecasting
1. New trends in consumer behavior
2. Online channel to acquire new customers
3. Decreasing operation costs
1. Isolationism policies in the United States economy
2. Lack of skilled work force
3. Intense competition in healthcare segment
4. Uncertainty regarding the Affordable Care Act (ACA)
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Detailed SWOT Analysis of Molina Healthcare



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1. Isolationism policies in the American economy: The current government ruled by Donald Trump promoted isolationism as a beneficial policy for employment guarantee to natives but it is not a healthy signal for business houses and the result was evident as stock exchange put its worst performance after the elections in Jan 2017 just after the government released the news of implementing it by banning natives from 7 countries. This would not only affect the globalization process leading to healthy relationships among countries but also affect the diversity and quality of workforce. The customer base to which Molina Healthcare is serving will also be seriously affected by this policy leading to both loss in skilled and talented employees as well as revenue generation. It would also affect the big American brands, tourism as well as service industries like Molina Healthcare. A trade war will start leading to uncertainties in the ecosystem. It would affect the work culture and hence related issues can also arise leading to difficult situations to handle which would affect the core business of Molina Healthcare.

2. Lack of skilled work force: The US healthcare industry is projected to grow at the rate of 18.1% from 2016 to 2026 and a forecast is that a 3.5 million healthcare workers will be needed to fill new jobs in the U.S. from 2016-26.The additional healthcare workers needed to replace workers who will leave the occupation or retire during that time period is 8.1 million. The labor data suggests more than 37,000 physicians; nurse practitioners and physician assistants will be needed in coming decade. The home care and ambulatory care settings are the healthcare sectors are expected to see the fastest growth during this period. A total of 700,000 jobs will be added by 2026 in the Hospital sector job. Over 14 % jobs out of total in US employment are in the healthcare sector or in healthcare occupations. The number of hospital jobs that consisted out of total healthcare employment decreased from 41 percent in 2006 to 39 percent in 2016 and it will be further decreased to 35% by 2026. But the real problem is to get the desired skilled workforce in such humongous numbers. So there should be initiatives from government to train people so as to fulfill this rapidly growing requirement. By already cutting 10% of its workforce in July 2017, Molina Healthcare is running behind the required number of employees to capitalize this rapidly growing healthcare industry. So number of skilled force needed is high in the organization and it need to find human resource as they are the one who create the difference.

3. Intense competition in healthcare segment: The major competitors of Molina Healthcare are United Healthcare, Well Care, Humana, Medi Assist, Centene, Magellan Health and Aetna. The large number of service providers leads to intense battle for customer acquiring as well as retention. The product and service differentiation among the offerings and price are decision factors along with the need of customers. There is not only direct competition in terms of customer’s acquisition but also for resources, technologies, human resources and funding. One solution to this can be merger and acquisitions leading to enhanced core competencies and improved capabilities. Other solutions can be leveraging technologies, diversifying the product portfolio, strengthening the relationships with not only customer but also with intermediaries.

4. Uncertainty regarding the Affordable Care Act (ACA): The terms of the ACA have undergone numerous changes with reduced funding being the most significant. The continuity of several programs under the ACA have thus come under threat. Molina has been directly affected as a planned reduction in Molina's Affordable Care Act exchange enrolment led to a fall of 14.2% memberships over 2017 to reach 3.8 million by the end of December 2018. The changes in the ACA have been a result of a ruling made by a federal judge in Texas in a case in December 2018 involving the state of Texas and nineteen other states, which deemed the ACA’s individual mandate as unconstitutional and therefore the ACA as being unconstitutional. Molina is likely to see adverse effects resulting from the ACA being deemed unconstitutional.

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Check Out Analysis of Other Relevant Companies

References used in Molina Healthcare Analysis Report

1. 2019 US and Global Health Care Industry Outlook -

2. First Look at Health Insurance Coverage in 2018 Finds ACA Gains Beginning to Reverse -

3. Annual Report Insurance Industry 2018- -and-notices/Documents/2018_FIO_Annual_Report.pdf

4. U.S. Health Insurance - Statistics & Facts -

5. 2019 Insurance Industry Outlook -

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Molina Healthcare SWOT & PESTLE Analysis - SWOT & PESTLE.COM

SWOT & (2021). Molina Healthcare SWOT & PESTLE Analysis - SWOT & [online] Available at: [Accessed 07 Mar, 2021].

In-text: (SWOT &, 2021)

Copyrights and Disclaimer

Molina Healthcare SWOT and PESTLE analysis has been conducted by Shraddha Shukla and reviewed by senior analysts from Barakaat Consulting.

Copyright of Molina Healthcare SWOT and PESTLE Analysis is the property of Barakaat Consulting. Please refer to the Terms and Conditions and Disclaimer for usage guidelines.

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