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Integrated delivery systems reposition for reform.

As policy-makers debate the ultimate design for health care reform, the pace of change in the fundamental structure for health care financing and delivery is accelerating, writes John Cochrane. State governments, employers, HMOs, insurers, hospitals, physicians and vendors are aggressively changing the way they are organized and do business. Cochrane's message to anyone involved in health care: "The revolution is now!"

Economic Competition↗
PubMed1993

Untangling healthcare competition.

Traditional approaches to competition may be inappropriate for healthcare providers. Neoclassical economics makes the implicit assumption that a single actor embodies consumption, compensation, and benefit from a transaction. In healthcare, this assumption does not hold. Instead, such actions are accomplished by three separate actors--consumers (physicians), customers (third-party payers), and clients (patients). A hospital simultaneously competes in three arenas. Hospitals compete for physicians along a technological dimension. Competition for third-party payers takes on a financial dimension. Hospitals compete for patients along a marketing dimension. Because of the complex marketplace interactions among hospital, patient, physician, and third-party payer, the role of price in controlling behavior is difficult to establish. The dynamics underlying the hospital selection decision--that is, the decision maker's expectations of services and the convenience of accessing services--must also be considered. Healthcare managers must understand the interrelationships involved in the three-pronged competitive perspective for several reasons. This perspective clarifies the multiple facets of competition a hospital faces. It also disentangles the actions previously fulfilled by the traditional single buyer. It illuminates the critical skills underlying the competition for each audience. Finally, it defines the primary criterion each audience uses in sorting among hospitals. Recognition of the multifaceted nature of competition among healthcare providers will help demystify market behavior and thereby improve internal organizational communication systems, managers' ability to focus on appropriate activities, and the hospital's ability to adapt to changing market conditions.

Catholicism↗
PubMed1993

All together now.

Integrated health plans, in which doctors, hospitals and insurers join forces to manage care, are a cornerstone of the "managed competition" approach to health care reform. But it's not clear that these longtime adversaries are ready to work together--or that consumers will be happy if they do.

Choice Behavior↗