Academic journal article International Journal of Management

Classifying Healthcare Network Relationships: An Analysis with Recommendations for Managers

Academic journal article International Journal of Management

Classifying Healthcare Network Relationships: An Analysis with Recommendations for Managers

Article excerpt

Healthcare organizations are now facing unprecedented environmental challenges. To adjust to these challenges, healthcare organizations frequently develop inter-organizational relationships to increase the chances of them being able to survival and grow. The healthcare networks that result could become a major trend in how such organizations operate. Despite this, there are few relevant investigations into how such networks should be established and what they should look like, what are optimal structures for such networks. This investigation aims to remedy this deficiency in current research. In this paper we argue that healthcare networks can be described in terms of two basic dimensions, of breadth and depth, from which four types of healthcare network relationships can be identified, these being the Network Cooperation, Network Transaction, Relationship Transaction and Pure Transaction kinds of network structures. Using this classification system as a basis, we develop a number of suggestions, from a review of the relevant literature, for managers of healthcare organizations and policy makers for improving their decision-making about operations and policies.

Introduction

Improvements in medical technology, a greater concern with health issues on the part of the general public, and changes in demand for medical care, have provided hospitals with a challenging environment. We argue that when Healthcare organizations have such an environment that is also uncertain and stressful, as regards dealing with competitors, they need to develop aggressive management strategies if they are to respond effectively. The relevant literature stresses the importance of cooperation among healthcare organizations, as a strategy for dealing with such an environment. Malloy & Skinner (1984) argue that when competition between healthcare organizations is severe, a growing number of hospitals will focus on inter-organizational relationships besides dealing internal management issues. Their hope is that by cooperating effectively with other hospitals organizations, they can assure the survival and growth of their own hospital. When hospitals are facing a highly turbulent environment, Chang et al (1999) suggest they should spare no effort in developing effective vertical and horizontal coalitions with other hospitals, because such coalitions enable them to make more efficient use of their resources. Zhuang (2000) suggests that, based on their particular market, strategic position and competitive advantage, the main task for healthcare organizations is to make good use of these coalitions in order to integrate their service and finance systems and to use the same business management techniques, both of which will enhance their competitive capabilities. We believe that inter-organizational cooperation-between hospitals- will be the most important issue for the Healthcare industry in the future. Furthermore, increases in chronic illness and in social morbidity; e.g., in alcoholism, drug addiction, and homicides, will result in an increased demand for care services that are integrated-forwards and backwards-vertically, not merely horizontally between units or sections operating at the same stage in the Healthcare process. To solve these issues, an integrated Healthcare delivery system must be established to provide better and more solutions. It follows from this that it is important for healthcare organizations to establish effective network relationships and to develop properly integrated healthcare systems. This article aims to develop a taxonomy of such relationships, that will assist managers of healthcare organizations in terms of both their policies and operations.

Taxonomies of Healthcare Relationship Networks

Interactions between organizations and environments determine certain norms of behavior and values. The outcome of the relationship is the "atmosphere" which results from the various exchanges and adaptations. …

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