Which of the following best explains why home health care agencies that are part of national chains are doing better in the competitive marketplace than individually owned agencies?
a. There is better media coverage and a nationally known "name" recognized by prospective clients.
b. They are able to offer lower quality care using less well-prepared caregivers to ensure maximum profit.
c. The chief executive officer usually has extensive experience and makes wise decisions.
d. There are lower administrative costs and easier negotiating when buying in bulk.
ANS: D
Agencies within chains have a financial advantage over single agencies. The chains have lower administrative costs because a larger single corporate structure provides many services. For example, a multiagency corporation has greater purchasing power for supplies and equipment because they purchase a larger volume. A single corporate office can provide administrative services such as payroll and employee benefits for all chain employees, thereby reducing duplication of these services. It is unlikely that they are doing better because they receive better media coverage, offer less quality care, or have a more experienced chief executive officer.
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