A taxonomy of health networks and systems: bringing order out of chaos.
OBJECTIVE: To use existing theory and data for empirical development of a taxonomy that identifies clusters of organizations sharing common strategic/structural features. DATA SOURCES: Data from the 1994 and 1995 American Hospital Association Annual Surveys, which provide extensive data on hospital involvement in hospital-led health networks and systems. STUDY DESIGN: Theories of organization behavior and industrial organization economics were used to identify three strategic/structural dimensions: differentiation, which refers to the number of different products/services along a healthcare continuum; integration, which refers to mechanisms used to achieve unity of effort across organizational components; and centralization, which relates to the extent to which activities take place at centralized versus dispersed locations. These dimensions were applied to three components of the health service/product continuum: hospital services, physician arrangements, and provider-based insurance activities. DATA EXTRACTION METHODS: We identified 295 health systems and 274 health networks across the United States in 1994, and 297 health systems and 306 health networks in 1995 using AHA data. Empirical measures aggregated individual hospital data to the health network and system level. PRINCIPAL FINDINGS: We identified a reliable, internally valid, and stable four-cluster solution for health networks and a five-cluster solution for health systems. We found that differentiation and centralization were particularly important in distinguishing unique clusters of organizations. High differentiation typically occurred with low centralization, which suggests that a broader scope of activity is more difficult to centrally coordinate. Integration was also important, but we found that health networks and systems typically engaged in both ownership-based and contractual-based integration or they were not integrated at all. CONCLUSIONS: Overall, we were able to classify approximately 70 percent of hospital-led health networks and 90 percent of hospital-led health systems into well-defined organizational clusters. Given the widespread perception that organizational change in healthcare has been chaotic, our research suggests that important and meaningful similarities exist across many evolving organizations. The resulting taxonomy provides a new lexicon for researchers, policymakers, and healthcare executives for characterizing key strategic and structural features of evolving organizations. The taxonomy also provides a framework for future inquiry about the relationships between organizational strategy, structure, and performance, and for assessing policy issues, such as Medicare Provider Sponsored Organizations, antitrust, and insurance regulation. (+info)
The rapidly growing number of disease gene patents--patents that claim all methods for diagnosis of a particular genetic condition--threatens the ability of physicians to provide medical care to their patients. In the past, patented diagnostic tests were made broadly available to the medical community in the form of test kits or licenses to use the patented test. Disease gene tests, however, are being monopolized by a small number of providers. Monopolization of medical testing services: (a) threatens to restrict research activities; (b) creates unacceptable conflicts of interest; (c) may reduce patient access to testing; (d) may lead to inequitable extensions of patent terms on tests and related discoveries; and (e) grants to patent holders the ability to dictate the standard of care for testing, and to otherwise interfere with the practice of medicine. Because of the risks raised by monopolization, amendment of the patent law to require compulsory licensing of physicians providing medical services is recommended. (+info)
The corporate practice of health care ... a panel discussion.
The pros and cons of treating health care as a profit-making business got a lively airing in Boston May 16, when the Harvard School of Public Health's "Second Conference on Strategic Alliances in the Evolving Health Care Market" presented what was billed as a "Socratic panel." The moderator was Charles R. Nesson, J.D., a Harvard Law School professor of 30 years' standing whose knack for guiding lively discussions is well known to viewers of such Public Broadcasting Service series as "The Constitution: That Delicate Balance. "As one panelist mentioned, Boston was an interesting place for this conversation. With a large and eminent medical establishment consisting mostly of traditionally not-for-profit institutions, the metropolis of the only state carried in 1972 by liberal Presidential candidate George McGovern is in one sense a skeptical holdout against the wave of aggressive investment capitalism that has been sweeping the health care industry since the 1994 failure of the Clinton health plan. In another sense, though, managed care-heavy Boston is an innovative crucible of change, just like its dominant HMO, the not-for-profit but merger-minded Harvard Pilgrim Health Care. Both of these facets of Beantown's health care psychology could be discerned in the comments heard during the panel discussion. With the permission of the Harvard School of Public Health--and asking due indulgence for the limitations of tape-recording technology in a room often buzzing with amateur comment--MANAGED CARE is pleased to present selections from the discussion in the hope that they will shed light on the business of health care. (+info)
Sustaining malaria prevention in Benin: local production of bednets.
Through a Benin-Canada participatory research initiative which included both Benin and Canadian non-governmental organizations, a local capacity to produce and market bednets for the prevention of malaria was developed. The development process began following a community-based assessment of local needs and skills. All materials for the manufacture and distribution of the bednets were obtained locally with the exception of the netting which was imported from Canada. The sustainability of the enterprise is enhanced by the community's recognition of the importance of malaria and the culturally acceptable practice of bednet use. (+info)
The relationship and tensions between vertical integrated delivery systems and horizontal specialty networks.
This activity is designated for physicians, medical directors, and healthcare policy makers. GOAL: To clarify the issues involved with the integration of single-specialty networks into vertical integrated healthcare delivery systems. OBJECTIVES: 1. Recognize the advantages that single-specialty networks offer under capitated medical care. 2. Understand the self-interests and tensions involved in integrating these networks into vertical networks of primary care physicians, hospitals, and associated specialists. 3. Understand the rationale of "stacking" horizontal networks within a vertical system. (+info)
Nonprofit to for-profit conversions by hospitals, health insurers, and health plans.
Conversion of hospitals, health insurers, and health plans from nonprofit to for-profit ownership has become a focus of national debate. The author examines why nonprofit ownership has been dominant in the US health system and assesses the strength of the argument that nonprofits provide community benefits that would be threatened by for-profit conversion. The author concludes that many of the specific community benefits offered by nonprofits, such as care for the poor, could be maintained or replaced by adequate funding of public programs and that quality and fairness in treatment can be better assured through clear standards of care and adequate monitoring systems. As health care becomes increasingly commercialized, the most difficult parts of nonprofits' historic mission to preserve are the community orientation, leadership role, and innovation that nonprofit hospitals and health plans have provided out of their commitment to a community beyond those to whom they sell services. (+info)
The effects of group size and group economic factors on collaboration: a study of the financial performance of rural hospitals in consortia.
STUDY QUESTIONS: To determine factors that distinguish effective rural hospital consortia from ineffective ones in terms of their ability to improve members' financial performance. Two questions in particular were addressed: (1) Do large consortia have a greater collective impact on their members? (2) Does a consortium's economic environment determine the degree of collective impact on members? DATA SOURCES AND STUDY SETTING: Based on the hospital survey conducted during February 1992 by the Robert Wood Johnson Hospital-Based Rural Health Care project of rural hospital consortia. The survey data were augmented with data from Medicare Cost Reports (1985-1991), AHA Annual Surveys (1985-1991), and other secondary data. STUDY DESIGN: Dependent variables were total operating profit, cost per adjusted admission, and revenue per adjusted admission. Control variables included degree of group formalization, degree of inequality of resources among members (group asymmetry), affiliation with other consortium group(s), individual economic environment, common hospital characteristics (bed size, ownership type, system affiliation, case mix, etc.), year (1985-1991), and census region dummies. PRINCIPAL FINDINGS: All dependent variables have a curvilinear association with group size. The optimum group size is somewhere in the neighborhood of 45. This reveals the benefits of collective action (i.e., scale economies and/or synergy effects) and the issue of complexity as group size increases. Across analyses, no strong evidence exists of group economic environment impacts, and the environmental influences come mainly from the local economy rather than from the group economy. CONCLUSION: There may be some success stories of collaboration among hospitals in consortia, and consortium effects vary across different collaborations. RELEVANCE/IMPACT: When studying consortia, it makes sense to develop a typology of groups based on some performance indicators. The results of this study imply that government, rural communities, and consortium staff and steering committees should forge the consortium concept by expanding membership in order to gain greater financial benefits for individual hospitals. (+info)
Financial and organizational determinants of hospital diversification into subacute care.
OBJECTIVE: To examine the financial, market, and organizational determinants of hospital diversification into subacute inpatient care by acute care hospitals in order to guide hospital managers in undertaking such diversification efforts. STUDY SETTING: All nongovernment, general, acute care, community hospitals that were operating during the years 1985 through 1991 (3,986 hospitals in total). DATA SOURCES: Cross-sectional, time-series data were drawn from the American Hospital Association's (AHA) Annual Survey of Hospitals, the Health Care Financing Administration's (HCFA) Medicare Cost Reports, a latitude and longitude listing for all community hospital addresses, and the Area Resource File (ARF) published in 1992, which provides county level environmental variables. STUDY DESIGN: The study is longitudinal, enabling the specification of temporal patterns in conversion, causal inferences, and the treatment of right-censoring problems. The unit of analysis is the individual hospital. KEY FINDINGS: Significant differences were found in the average level of subacute care offered by investor-owned versus tax-exempt hospitals. After controlling for selection bias, financial performance, risk, size, occupancy, and other variables, IO hospitals offered 31.3 percent less subacute care than did NFP hospitals. Financial performance and risk are predictors of IO hospitals' diversification into subacute care, but not of NFP hospitals' activities in this market. Resource availability appears to expedite expansion into subacute care for both types of hospitals. CONCLUSIONS: Investment criteria and strategy differ between investor-owned and tax-exempt hospitals. (+info)