Vertical integration and organizational networks in health care.
This paper documents the growing linkages between primary care-centered medical groups and specialists and between physicians and hospitals under managed care. We evaluate the two alternative forms of organizational coordination: "vertical integration," based on unified ownership, and "virtual integration," based on contractual networks. Excess capacity and the need for investment capital are major short-term determinants of these vertical versus virtual integration decisions in health care. In the longer term, the principal determinants are economies of scale, risk-bearing ability, transaction costs, and the capacity for innovation in methods of managing care.
Robinson
J C
JC
University of California, Berkeley, USA.
Casalino
L P
LP
D002140:California; D019058:Community Networks / Q000458:organization & administration*; D003284:Contract Services / Q000458:organization & administration; D019033:Delivery of Health Care, Integrated / Q000458:organization & administration*; D006123:Group Practice / Q000458:organization & administration; D006279:Health Maintenance Organizations / Q000458:organization & administration*; D006759:Hospital-Physician Joint Ventures / Q000458:organization & administration; D006801:Humans; D010348:Patient Care Team / Q000458:organization & administration