Processing of intended and unintended strategic issues and integration into the strategic agenda.

BACKGROUND: Strategic change is needed in hospitals due to external and internal pressures. However, research on strategic change, as a combination of management and medical expertise in hospitals, remains scarce. PURPOSE: We analyze how intended strategic issues are processed into deliberate strategies and how unintended strategic issues are processed into emergent strategies in the management of strategy formation in hospitals. This study empirically investigates the integration of medical and management expertise in strategy formation. METHODOLOGY: The longitudinal character of the case study enabled us to track patterns of intended and unintended strategic issues over 2 years. We triangulated data from interviews, observations, and documents. In accordance with the quality standards of qualitative research procedures, we analyzed the data by pattern matching and provided analytical generalization regarding strategy formation in hospitals. RESULTS: Our findings suggest that strategic issues are particularly successful within the strategy formation process if interest groups are concerned with the strategic issue, prospective profits are estimated, and relevant decisions makers are involved early on. Structure and interaction processes require clear criteria and transparent procedures for effective strategy formation. CONCLUSION: There is systematic neglect of medical expertise in processes of generating strategies. PRACTICE IMPLICATIONS: Our study reveals that the decentralized structure of medical centers is an adequate template for both the operationalization of intended strategic issues and the development of unintended strategic issues. However, tasks, roles, responsibility, resources, and administrative support are necessary for effective management of strategy formation. Similarly, criteria, procedures, and decision-making are prerequisites for effective strategy formation.

Differences in the implementation of diagnosis-related groups across clinical departments: a German hospital case study.

OBJECTIVE: This article aims to examine the implementation process of diagnosis-related groups (DRGs) in the clinical departments of a German hospital group and to explain why some gain competitive advantage while others do not. STUDY SETTING: To investigate this research question, we conducted a qualitative study based on primary data obtained in six clinical departments in a German hospital group between 2003 and 2005. STUDY DESIGN: We chose the case study method in order to gain deep insights into the process dynamics of the implementation of DRGs in the six clinical departments. The dynamic capability approach is used as a theoretical foundation. Employing theory-driven categories we focused on idiosyncratic and common patterns of "successful coders" and "unsuccessful coders." DATA COLLECTION: To observe the implementation process of DRGs, we conducted 43 semistructured interviews with key persons, carried out direct observations of the monthly meetings of the DRG project group, and sampled written materials. PRINCIPAL FINDINGS: "Successful coders" invest into change resources, demonstrate a high level of acceptance of innovations, and organize effective processes of coordination and learning. CONCLUSIONS: All clinical departments only put an emphasis on the coding aspects of the DRGs. There is a lack of vision regarding the optimization of patient treatment processes and specialization. Physicians are the most important key actors, rather than the main barriers.