Integration as networks and systems: A strategic stakeholder analysis

Abstract

Vertical and horizontal integration has transformed the organization and delivery of health services, with hundreds of systems or networks providing a range of services to regional populations by the late 1990s. The advantages and disadvantages of vertical integration are well known in other industries, with most strategists suggesting that it is inherently less competitive than virtual and other arrangements. This paper explores the advantages of conjoining integrated delivery systems (IDSs) with integrated delivery networks (IDNs). An historical overview of health delivery organization integration illustrates how three external forces — managed care penetration and competitiveness, legislative and reform activity, and anti-trust issues — have determined the various forms of integrated delivery organizations (IDOs). Empirical research comparing the financial performance of hospitals in system versus network organizations generally favors systems over networks. A strategic stakeholder analysis of both IDN and IDS forms of organizations identifies key stakeholders and their interests; classifies the relationships of these stakeholders with the IDO; and assesses the extent to which the array of stakeholder relationships create a benevolent or hostile environment for the IDO. This strategic analysis indicates that networks have more benevolent stakeholder relationships than systems. We discuss the environmental conditions favoring, and the managerial challenges facing, IDOs that embody both systems and networks.

Citation

Savage, G.T. and Roboski, A.M. (2001), "Integration as networks and systems: A strategic stakeholder analysis", Advances in Health Care Management (Advances in Health Care Management, Vol. 2), Emerald Group Publishing Limited, Leeds, pp. 37-62. https://doi.org/10.1016/S1474-8231(01)02022-5