Porter’s five forces analysis provides a methodology to evaluate the external markets. Its consideration of substitutes, threats and power of buyer and supplier assists with the development of an integration strategy. A thorough analysis can isolate attractive opportunities in support of building a profitable business model. These strategies can leverage vertical and/or horizontal integration of new business entities. These entities are designed to help with growing market share, increase efficiencies and/or reduce costs. During the 1990’s many hospitals pursued a combination of both vertical and horizontal integration. The goal was to create an integrated delivery network (IDN) designed to improve their economic performance.
In 1988, an information system called the Composite Health Care System (CHCS) was formulated by a company called Science Applications International Corporations (SAIC). Science Application International Corporations won the contract worth $1.02 billion from the Military Health System to design, develop and implement CHCS. Although CHCS information system was designed in 1988, it wasn’t until 1993 that the system was introduced. Since 1993, CHCS has become the biggest medical information system for the military medial facilities. CHCS is the most essential part for the Department of Defense (DoD) for inpatient and outpatient. The system supports 143 military installation worldwide, 1,100 military clinics, and produce thousands of daily
Horizontal integration involves buying out other companies and taking over one single step of an industrial process. It establishes a monopoly because, with horizontal integration, everyone must go the company that has monopolized that step.
Recently, many healthcare organizations are merging and creating partnerships with other health organizations with an aim of ensuring long-term financial feasibility. According to records and statistics, the number of hospitals that merged between 2009 and 2012 doubled significantly. According to an article that was published by the New York Times, the number of hospitals and health facilities merging is expected to increase in the next few years. Mergers have brought about manifold changes in the health sector in terms of connecting data from frantic electronic health records and in making the healthcare systems interoperable (Informatics in healthcare, 1992).
Vertically integrated health care system that I have chosen is the Veterans Administration (VA) it's accountable for a large patient population for military veterans. As stated, The Veterans Health Administration is America’s largest integrated health care system with over 1,700 sites of care, serving 8.76 million Veterans each year (VA.GOV). The services that's provided to veterans is health care, rehabilitation, employment, education, home loan guaranties, and life insurance coverage. VA control costs by buying in bulk and control costs by engaging in a deep, single-source relationship with each patient. The Assistant Secretary for Management oversees all resource requirements, development and implementation of agency performance measures,
There are several different reasons as to why a long term care facility would seek to join either an integrated health system (IHS) or an integrated health network (IHN). The motivation to participate typically comes from either a requirement or eagerness to enhance the organization's situation within the long term care environment. Organization chose to incorporate an integrated system or network when the goals of the whole outweigh the goals of the individual organization's current state.
Over the years Canada has been making efforts to adopt an integrated health care system. There is existence of disconnected sections in the healthcare system that involves hospitals; doctor’s working conditions, community service groups among others. Various provinces in Canada are taking risks and experimenting with different structures and approaches in an effort to provide better services and overall improved healthcare to its residents. Examples include: Regional Health Authorities and Local Health Integration Networks. Despite all these efforts, Canada’s regional health authorities still do not have characteristics of a fully integrated system. (Hospital Management Research Unit 1996, 1997). In contrast to Canada, most developed countries
Health Care Integrator (HCI) met with Alana at her case address to assess and coordinates B2H services for her immediate needs. Alana has been diagnosis with Post Traumatic Stress Disorder and Attention Deficit Hyperactivity Disorder. Currently, Alana receives Skill Building (SB) and Special Needs Community Advocacy (SNCAS). HCI inquired how is it going with assigned Waiver Service Provider (WSP), Jessica Reyes. HCI inquired about Alana’s current living situation. HCI inquired about how she is doing in school. HCI provided Alana’s with several pullups for her son. HCI inquired about how she is doing at work. HCI informed Alana to make a list of task she wants to accomplish for this week. HCI inquired if Alana had any issues that she wanted
Mergers have become normal practice in the health care industry by creating a larger hospital system that provides broader services with the focus on lowering healthcare cost and being economically profitable with keeping in line with regulatory guidance. A merger happens when two or more organizations agree to join together and become one organization. One or more organizations essentially must dissolve for this to happen. Sometimes both organizations dissolve and take on a completely new name as in this case of the merging of the two competing hospitals. (McClure, n.d.) Hospitals along with health systems are following the same trend to merge with other hospitals, this movement has continue to gain momentum and appears to be the future trend in the health care industry due to high operating hospital cost. In a survey done in 2012 regarding hospital maintaining independence only 13% plan not to align with other hospitals or health care systems, while the other 87% plan some type of merger with another hospital or health care system. (Hospital Mergers and Acquisitions, 2013)
Horizontal integrations mean that all services, facilities, and other patient care needs are acquired and merged into the integrated system. An example would be a general hospital acquiring or partnering with other specialized sources of healthcare such as, outpatient facilities, pharmacies, specialty offices, oncology centers, and diagnostic labs and services. A vertical integration means to apply factors that do not directly affect patient care, such as medical supplies and drugs, insurance, financial services, emergency services such as ambulances, and administration responsibilities. A system that can implement both can afford to provide lower cost care while maintaining quality, if the system gets to large enough it can also help curb the availability of care. In the Dallas-Fort Worth area one can see a growth in Texas Health Resources or THR, they own several large general hospitals, along with free-standing ERs, sports medicine offices, a heart hospital, and many other facilities in the
Inter-entity structure and management is used to management structures, processes, and relationships can be put in place to facilitate the coordination of care across services. It is importance for continuum of care because it ensures channels of communication and cooperation. This will establishes clear lines of authority for health care providers and organization to follow. It will require accountability and responsibility for the client services, negotiates budgets and financial trade-offs. Inter-entity will also address issues of risk management and liability, gathers
System integration is called horizontal when hospitals buy other hospitals to become multihospital system (Wolper, 2011, p. 78). Horizontal integration provides many benefits to the hospitals: (a) increased access to capital markets, (b) reduction in duplication of services, (c) economies of scale, (d) improved productivity and operating efficiencies, (e) access to management expertise, (f) increased personnel benefits including career mobility, recruitment, and retention, (g) improved patient access through geographical integration or various level of care, (h) improvement in quality through increased volume of services for specialized personnel, and (i) increased political power to deal with planning, regulation , and reimbursement issues (Wolper, 2011, p. 79). The benefit of horizontal integration is more on the administrative level rather than
Clinical integration by definition represents the “coordination of care across a continuum of services, including preventive, outpatient, inpatient acute hospital care, post-acute including skilled nursing, rehabilitation, home health services, and palliative care to improve the value of the care provided.”
In this paper there will be a brief discussion of three forces that have affected the development of the U.S healthcare system. It will observe whether or not these forces will continue to have an effect on the U.S healthcare system over the next decade. This paper will also include an additional force, which may be lead to believe to have an impact on the health care system of the nation. And lastly this paper will evaluate the importance of technology in healthcare.
The best health care systems in the world offer integrated care. Systems like the Mayo Clinic and Geisinger Health System own hospitals and labs and employ all the physicians and nurses a patient is likely to see, so they can easily integrate a patient’s care. In contrast, patients in North Carolina and throughout America typically obtain their care from a variety of independent providers. Health care expenses are paid by a variety of sources including private insurers, employers, the government and patients themselves. But unlike any other state, or even any large geographic area, North Carolina has the capacity to create a “virtually” integrated system, one that can provide the same integrated care but across an entire state. When patients’ transition between providers and health care settings, the result is often poor health outcomes, medical errors and costly duplication of tests and procedures. Through partnerships with other organizations and providers, NCHQA is seeking ways to better coordinate care and address systemic problems that cause dangerous and costly gaps in care. (NCHQA, 2014)