Table of Contents
Sometime back organizational integration was apparent all throughout the healthcare industry as just a panacea with regard to all the ills of the competitive healthcare marketplace. At the very least, integration was assumed the most appropriate method when it was the question of increment of access to capital and patients, and at this instant it would assist in ensuring entity's continued viability.
Owing to the healthcare market's approach of integration, most of the organizations have grown and expanded and this is seen especially when one tries to compare their nature formerly and currently. Yet, it is worth noting that increase in the size and also complexity of the same organizations has proved to be an insufficient criterion when it comes to determining whether a given organization is genuinely integrated. Genuine integration can take place only when an organization has two characteristics; being committed to and also at least making an attempt to carry out each and every phase with regard to the entire integration process effectively succeeding in integrating physicians into the same healthcare system is a particularly crucial part of the same process (Gertler, 2001).
It is quite relevant to try and dig out some facts in order to come up with the true integration. The fact that some organizations claim to be integrated and further call themselves an integrated system does guarantee them to be truly integrated. Still, legally merging a couple of entities into a common corporate structure does not approve an organization for it to become a truly integrated one. Even though the given effort prerequisite to develop and even file the requisite legal documents may appear much huge, it is interesting to note that this given phase has been proved the easiest portions of the whole process. The true integration may be much simple to define as apparently it is actually not an end point, but rather it is a continuum, an ongoing process being carried out and also changing with each organization. Integration is said to be much more even than an organizational chart. Actually it is said to be as a result of philosophy. Without even considering the specific organizational model that is involved, the genuine integration tends to embody various core cultural attributes and even some operational approaches (Sciences., 2011).
The Integration Process
In order to ensure that genuine integration has been met, healthcare organizations need to maintain some specified facts;
Development of a unifying concept and culture for that particular organization:
This is the first phase. An example is when the management of a certain organization needs to be able to determine whether it will take a team oriented, the given consensus based approach when it is a question of decision making and the degree to which it will encourage individual entrepreneurship just among the organization's affiliates. Even though this particular objective may appear somehow dimple to achieve, it calls for commitment and even some strong leadership, and this may also include overcoming of some serious obstacles.
Definition of organizational and administrative structures
This given phase involves determination of the governance with regard to the organization and even development of a specific organizational chart. Some other aspects like sharing of administrative support services may also be included. It is quite relevant to note that many of the organizations that claim to be integrated have completed this particular phase.
Integrate funds and other assets
Having gone through a couple of them, financial integration has proved to be the most difficult to achieve. Considering this phase, the IDS tend to assume ownership of the entire resources and finally develop given budgeting process that ultimately reflects the entire organizational objectives. Apparently this phase appears to pose more challenges than the previous as the most entities within the IDS find it quite demanding to abandon control over finances among some other assets (JAAN SIDOROV, 2003).
Develop synergistic operations
The most important step in this phase includes the relatively straight forward task of control of the administrative support operations assumption, the likes of medical records, accounting and then billing. The other step, however, assumption of the control over scheduling, the patient flow and then the physician practices and productivity, appears quite challenging owing to the fact that physicians often regard their particular control of these places as sacrosanct.
Hayward (2002) stated that while most of the people undertaking mergers and acquisitions tend to have a greater opportunity to learn from their given experiences, that they seldom do. This particular author found out that forms that happen to have smaller losses in prior acquisitions are normally stimulated to learn from their performance and then outperform on subsequent acquisitions. Considering the other side, the firms that have been associated with great success or even great failure tend to find it quite challenging to learn from that experience.
By contrast, Hayward (2002) finds that given acquisition experience being not enough to be in a position to generate some kind of superior acquisition performance; but forms appear more successful after they acquire companies in an almost similar business. Further claims by the same author have it that acquirers who make acquisitions successfully are not in a position to outperform companies that acquire infrequently. Hayward (2002) states that the best results only comes from those organizations who tend to take a modest break in the process of their acquisition processing, that is, a break that is long enough for management to be able to consolidate key lessons, not really so long to a position that the lesson are forgotten (Punwar, 1994).
Guest et al. (2004) stated that having owning at least a successful merger tends to be a predicator of a declining performance in the ensuing acquisitions. This is totally different from what Haywaard (2002) put across, as he found out that acquirers who happen to unfortunately have an unsuccessful first merger tend to learn from their mistakes and this consequently improves their following performance. Though the same acquirers learn from their mistakes, they often never make an attempt of catching up with the organizations successful with regard to their first acquisition. Guest winded up by alleging that if ones first merger is not in a position to succeed, it may not be sensible to pursue future mergers.
Considering the U.S, most of the healthcare organizations are actually being converted to some bigger integrated delivery systems, though the empirical evidence that is currently available is not in a position to provide a strong or even unequivocal support for or even against vertical integration. It is however unfortunate that the manager is not in a position to delay the changes in an organization and this may only happen only when further research has been completed, and especially when the further research is not able to show single, or even the correct solution designed for the diverse healthcare systems that are normally in existence. It is therefore the managers' task to prudently evaluate the obvious effects of integration with regard to their individual organizations. The vertical integration may be quite suitable if at all conditions that face the healthcare organization ensure provision of opportunities for the efficiency gains and this is through the re-organization attempts. There are a couple of things that the managers ought to consider;
(1) the way in which variations in the healthcare have impacted the dynamics with regard to production efficiency and even the transaction cost;
(2) the possibility that the existing integration strategies will be in a position to achieve some increases in efficiency or even reductions in the transactions costs; and
(3) How vertical incorporation will shape further costs, and whether the reimbursement gained will overshadow extra costs and competence losses. This given article makes an attempt to present reimbursement systems as just an example the way current changes in the commerce may be impacting the existing dynamics and even the efficiency with regard to production. The evaluation of the impacts of vertical integration should permit for logical alteration time, but apparently ineffective strategies should not be followed or even maintained, whatsoever.