Tracking the changing provider landscape: implications for health policy and practice.

Throughout the 1990s health care providers were interested in developing organized delivery systems. However, industry observers have increasingly questioned the sense of these efforts. Using an established taxonomy of health networks and systems, we examined whether there was a nationwide trend away from the vertical and horizontal arrangements that serve as the backbone to organized delivery systems. Studying 1994-1998, we found that both health networks and systems became less centralized in their hospital services, physician arrangements, and insurance product development. We did not find a general pathway to disintegration but instead found considerable experimentation in organizational form.

Classifying health networks and systems: managerial and policy implications.

This article illustrates how a new approach to classifying health networks and systems can be used to evaluate the readiness of health care organizations to accept risk. Examples are provided from the Harris-Methodist, Henry Ford, and SSM Health Care Systems. The classification system can also be used to assist executives and physician leaders in making decisions involving the centralization of services, the number of different services to offer, and decisions to enter into various strategic alliances. The classification system can be updated to help track the evolution of the U.S. health care system over time.

A taxonomy of health networks and systems: bringing order out of chaos.

OBJECTIVE: To use existing theory and data for empirical development of a taxonomy that identifies clusters of organizations sharing common strategic/structural features. DATA SOURCES: Data from the 1994 and 1995 American Hospital Association Annual Surveys, which provide extensive data on hospital involvement in hospital-led health networks and systems. STUDY DESIGN: Theories of organization behavior and industrial organization economics were used to identify three strategic/structural dimensions: differentiation, which refers to the number of different products/services along a healthcare continuum; integration, which refers to mechanisms used to achieve unity of effort across organizational components; and centralization, which relates to the extent to which activities take place at centralized versus dispersed locations. These dimensions were applied to three components of the health service/product continuum: hospital services, physician arrangements, and provider-based insurance activities. DATA EXTRACTION METHODS: We identified 295 health systems and 274 health networks across the United States in 1994, and 297 health systems and 306 health networks in 1995 using AHA data. Empirical measures aggregated individual hospital data to the health network and system level. PRINCIPAL FINDINGS: We identified a reliable, internally valid, and stable four-cluster solution for health networks and a five-cluster solution for health systems. We found that differentiation and centralization were particularly important in distinguishing unique clusters of organizations. High differentiation typically occurred with low centralization, which suggests that a broader scope of activity is more difficult to centrally coordinate. Integration was also important, but we found that health networks and systems typically engaged in both ownership-based and contractual-based integration or they were not integrated at all. CONCLUSIONS: Overall, we were able to classify approximately 70 percent of hospital-led health networks and 90 percent of hospital-led health systems into well-defined organizational clusters. Given the widespread perception that organizational change in healthcare has been chaotic, our research suggests that important and meaningful similarities exist across many evolving organizations. The resulting taxonomy provides a new lexicon for researchers, policymakers, and healthcare executives for characterizing key strategic and structural features of evolving organizations. The taxonomy also provides a framework for future inquiry about the relationships between organizational strategy, structure, and performance, and for assessing policy issues, such as Medicare Provider Sponsored Organizations, antitrust, and insurance regulation.