Health Care

Term paper on Health Care Reform

The integrated system has become the latest in a series of strategies that are deemed to be essential components of the successful health care system in the future. Unfortunately, too many hospitals and physicians are embarking on such strategies without sufficient understanding of why it is necessary. It seems clear that there are several major reasons why provider integration is absolutely crucial to the health care system of the future. (Aaron & Barry 1994)

• Access to Organized Provider Services. It is exceedingly difficult to develop a systems strategy with entities that are organized as small enterprises (i.e., physician practices). Strategic decisions that affect the overall directions of the corporation are too frequently delayed, and the ability to be responsive to an increasingly prudent buyer is compromised. An organized provider network allows not only for much greater freedom in meeting the expectations of buyers, but also for the addition of substantially better management in • Enhanced Geographic Market Presence and Capacity. A more stable, predictable market share can be sustained through integrated systems. The greater geographic capacity also allows for greater market penetration if strategic plans are implemented in an effective manner. Also, the various subspecialties can be offered a greater degree of protection through collaboration with an organized primary care referral base.

• Managed Care Contracting. Through an integrated provider structure, bargaining clout can be maintained, with an enhanced ability to negotiate price. Furthermore, managed care contracting is a complex enterprise and the managerial talent that can be identified for an integrated system is often much better than for smaller, individual practices. (Bender & Leone 1994)

• Cost Elimination. Capitation, a priori,