Transcript Document

Inter-Organizational
Arrangements:Alliances,
Mergers & Integrated Systems
Escola Nacional de Saude Publica Sergio Arouca
Fundacao Oswaldo Cruz
Rio de Janeiro, RJ
June 2004
Arnold D. Kaluzny, Ph.D.
Professor of Health Policy and Administration
Inter-Organizational
Arrangements
• What we know
• What we think we know
• What we should know
What we know!!
What we know
“One can count on Americans to
do the right thing, once they
have exhausted all other
alternatives.”
Attributed to Sir Winston Churchill
Evolution of Health Care Delivery Forms
Hospital
Horizontal Systems
Systems
Vertical
Accountable Alliance Community Care
Health Plans
IDS
Networks
Community
Health Care
Management
Systems
Hybrid
Organizations
The “Alliance” Continuum
Hierarchy
Merger
and
Acquisitions
(IDS)
Market
Joint
Ownership
Joint
Venture
Formal
Cooperative
Group/Alliance
Informal
Cooperative
Venture/
Alliance
Organized (Integrated) Delivery Systems
A network of organizations that
provides or arranges to provide a
coordinated continuum of services
to a defined population and is
willing to be held clinically and
financially accountable for the
outcome and the health status of the
population served
(Shortell et al, 1993)
Cooperative Ventures/Alliances
A loosely coupled arrangement
among existing organizations
designed to achieve some long term
strategic purpose not possible by
any single organization
Emergence of IDS’s:
Mergers & Acquisitions
• 1995 –51% private acute care hospitals
part of hospital systems
• 2000- 57% private acute care hospitals
part of hospital systems
• Little research on the effect on the effect
of joining
– Improved patient care?
– Improved/more efficient operations?
Do “Hospital Systems” Improve
Quality & Efficiency
•Who Joined Systems?
– For-profit hospitals 10 times more likely
– Hospitals with high managed care patient loads
– Hospitals where managed care was growing
•System formation has served to:
–
–
–
–
Increase market share
No indication of improved quality of care
No indication of improved operations
No change in charity care provided
» Cuellar & Gertler, Health Affairs,2005
Strategic Alliances: Enthusiasm vs. Reality
• Easier to have X –in house– than do in cooperation with
partner
• Easier to manage own “personnel” than coordinate with
others
• Easier to make quicker decisions in own organization
than to check first with partner
• Easier to implement X in a homogeneous organization
than to implement X in a cooperative venture
Alliances in Health Care:
Why is it?
The reality is!
“If an increasing amount of
economic
(health
service)activity continues to
occur across, rather than within,
the boundaries defined by
formal ownership of one firm,
managers
will
have
to
understand (learn)how to work
with
partners
rather
than
subordinates.”
Kanter, 1989
Alliances in Health Care:
What We Know
• Alliances are legion
–Airlines
–Automobiles
–Telecommunications
–Pharmaceuticals
Alliances in Health Care:
What We Know
• Alliances arise out of mutual
need and willingness
...to share risks and costs
...to share knowledge and
capabilities
...to reach common objectives
Strategic Alliances:
Application and Illustrations
• Hospital – Hospitals
– Purchasing Alliances/Premier
• Hospital – Health Department
– Carolinas Health Care-Mecklenberg Health Dept
• Physician –University
– Quality in Pediatric Subspecialty Care (QPSC)
–
ABP,AAP,UNC
Strategic Alliances:
Application and Illustrations
• Public- Private
– Quintiles-UNC Hospitals
– Early Detection Research Network(EDRN)
– Community Clinical Oncology Program (CCOP)
• HMO- Integrated Delivery Systems
– Cancer Research Network
• University – Integrated Delivery Systems
– Center for Health Management Research(CHMR)
What we think we know??
Strategic Alliances:
Distinguishing Characteristics
• A process – stages/factors/tasks
• Commitment, not control
• Factors affecting success / failure
Life Cycle of “Alliance”
Factors
Environment
Centralization
Recognition &
Member Benefit
Motivation
Alliance
& Dependency
& Dependency
Stages
Emergence
Transition
Maturity
Tasks
Define Purpose
Establish
Criteria
Hire Mgmt.
Objective &
Coordination
& Control
Achieve
about Future
Sustain
Commitment
Crossroads
Strategic Alliances:
Commitment, NOT Control
Good partnerships, like good marriages,
don’t work on the basis of ownership or
control. It takes effort and commitment
and enthusiasm from both sides if either is
to realize the hoped for benefits. You
cannot own a successful partner any more
than you can own a husband or a wife.
(Ohmae, 1989)
Alliances in Health Care:
Factors
What We Think We Know
• Sustaining Over Time
–Select the right partners
–Trust and commitment: underlying
glue
–Explicit operating rules
–Mutually agreed upon and understood
expectations
–Partners must learn from and be
strengthened -- “value added”
Alliances in Health Care
• Characteristics of an Effective Alliance:
(The “Six I’s)
–Alliance is IMPORTANT
–Alliance is long term INVESTMENT
–Partners are INTERDEPENDENT(mutual
benefit)
–Alliance is INTEGRATED
–Alliance members are INFORMED
–Alliance is INSTITUTIONALIZED
– Kanter,89
Alliances in Health Care:
What We Know
• Reasons for Failure
– Judging success by short-term financial
results rather than long-term strategic
objectives-NOT a “quick fix”
– Lack of trust among partners
– Uneven commitment and unbalanced
power
Alliances in Health Care
What We Know
• Reasons for Failure
–Uninformed middle/lower managers
–Misunderstood motivations and
expectation
–Lack of mutually accepted
performance measures
Managing a Strategic Alliance:
Special Challenges
• Ambiguities in Relationships
• Simultaneous Cooperation &
Competition ( eg CCOP in Iowa)
• Managerial Mindsets Hostile to
Sharing /Control and Command
Managing a Strategic Alliance:
Special Challenges
• Multiplicity of Details
• Emergence of Complex Networks
Composed of Multiple Alliances
What we think we know:
The Case of CCOP
Community Clinical Oncology Program
Integral to NCI Clinical Trials Network
Cancer
Centers
CCOPs
Cooperative
Groups
Community Based Cancer Care:
Challenge
•
•
•
•
•
•
80% care in community
Questionable quality
Treatment, prevention and control
Indeterminate/dynamic technology
Guidelines not effective/CHOP
Changing delivery system
Community Clinical Oncology Program
What is a CCOP?
– A Group of Community Hospitals and
Physicians
– Funded by a Peer Reviewed Cooperative
Agreement
– To Participate In NCI-approved Cancer
Treatment, and Cancer Prevention and
Control Clinical Trials
Intra-CCOP Relations
Hospital
Component
1
Component
2
Hospital
Component
4
Hospital
CCOP
Central Office
Hospital
Component
3
Community Clinical Oncology Program
What is a Minority-Based CCOP (MB-CCOP)?
– Hospitals and Physicians with > 40% New
Cancer Patients from Minority Populations
– University Hospitals are Eligible to Apply
– Funded by a Peer-Reviewed Cooperative
Agreement
– Participate in NCI-approved Cancer Treatment,
and Cancer Prevention and Control Clinical
Trials
Community Clinical Oncology Program
What is a CCOP Research Base?
– An NCI-designated Cancer Center or Cooperative
Group
– Funded by a Peer- Reviewed Cooperative Agreement
– Develop and Conduct Cancer Prevention and
Control Clinical Trials
– Supports Development of Cancer Prevention Science
Intra-Research Base Relations
Research
Base Central
Operations
Office
Unit
1
Unit
2
Cancer
Control
Committee
Unit
3
Unit
4
Components of the Community
Clinical Oncology Program
Figure 2.1. Components of the Community Clinical Oncology Program
National Cancer Institute
_______________________
Overall Direction
Program Management
Funding
Research Bases
________________________
Development of Protocols
Data Management
and Analysis
Quality Assurance
CCOPs
____________________
Accrual to Protocols
Data Management
Quality Control
Cancer Patients and
Subjects at Risk for Cancer
CCOP - A “Strategic Alliance”
(A Classic Example)
A loosely coupled arrangement
among existing organizations
designed to achieve some long
term strategic purpose not
possible by any single
organization
Community Clinical Oncology Program
MISSION
Bring the advantages of state-of-the-art cancer
treatment, prevention, and control research to
individuals in their own communities by:
• Involving community physicians and
their patients in NCI-approved clinical
trials
• Involving primary health care providers
in research process
• Increasing minority participation
CCOP - Objectives
• Conduct treatment and cancer
prevention & control trials in the
community
• Improve community practice patterns
• Diffuse state-of-the-art cancer
management
CCOP - Methods
• Increase access to clinical trials
• Involve community physicians
(including primary care physicians) in
clinical research
• Establish a clinical network for
prevention & control research
Community Clinical Oncology Program
• 50 CCOPs
(31 States)
• 11 MBCCOPs (8 States, DC & Puerto Rico)
• 12 Research Bases
Community Clinical Oncology Program
Participating Physicians (4,037)
– 2,505 Physicians Accrue Trial Participants
– 1,532 Physicians Refer Trial Participants
Participating Hospitals (403)
Community Clinical Oncology
Program
CCOP & MBCCOP
Primary Care
12%
Urologists
7%
All Others
1%
Surgeons
13%
Med Onc/Hem
51%
Rad Onc
16%
Community Clinical Oncology Program
CCOP Funding
FY2002
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
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CCOPs
MBCCOPs
Research Bases
Prevention Members
Large Prevention Trials
• SELECT
• STAR
• PCPT
$91.3 Million
$32.8 million
$ 4.6 million
$14.1 million
$ 2.9 million
$15.8 million
$13.9 million
$ 7.2 million
Practice
Patterns
Time
Community Based Cancer Care:
LESSONS
•
•
•
•
•
No diffusion effect
Change practice patterns - breast
Need “relevant” protocols
Involve support personnel
Uneasy interactions
– University/Community
– Providers/Social Science
Managing Strategic Alliances:
Action Guidelines
• Explicit Participation Strategy
• Sequential Implementation
• Consensus Among Participants
• Align Incentives
• Prerequisite Skills
• Realistic Time Expectations
Managing A Strategic Alliance:
Explicit Participation Strategy
• Manage Participant Selection &
Relationships
• Manage the Adaptation Process:
Role of Boundary Spanners. Eg nurses
Managing a Strategic Alliance:
Aligning Incentives
• Risk Sharing Among Participants
• Shared Vision consistent with
Financial and Procedural Realities
• Monetary only one incentive to
influence behavior
“Before
we begin today, may I say that both my client
and I were astonished that Your Honor was not
nominated for the Supreme Court.”
Managing A Strategic Alliance:
Using Sequential Implementation
• Follow the Theory of “Small Wins”
– Provide Visible Accomplishments
– Encourage Others
– Lower Resistance to Future Efforts
– Change Frame of Debate
Managing a Strategic Alliance:
Ensure Consensus Among Participants
• “Single Loop” Learning-knowledge of
basic definitions & relationships
• “Double Loop” Learningunderstanding of basic assumptions
underlying definitions and
relationships
Managing a Strategic Alliance:
Provide Prerrquisite Skills
• Vision beyond the Institution
• Negotiation – Win/Win vs Win/Lose
• Trust – “If you don’t have trust, you
must build it”
Managing a Strategic Alliance:
Set Realistic Time Expectations
• Individual Involvement
• Implement & Institutionalize
What we should know!!
What we should know!!
• Methodological
– Need Definition-Need for a Taxonomy
– Need Qualitative Case Studies
– Need Indictors of Performance
What we should know!!
• Substantive
– Outcomes & Impact
•
•
•
•
What forms are more effective?
Does performance influence structure?
What feedback loops are available?
Does prior experience/prior relationships predict
success/failure
• Etc.
What we should know!!
• Substantive
– Structure & Process
• What are the organizational/environmental predictors of
success and performance?
• What are the appropriate governance structures?
• What information systems can best cope with the demands
of quality,sharing and accountability
• What are the antitrust issues involved?
• Etc.
– Formulation
• What competencies are required?
• What is the role of needs assessment?
I suspect >>>>>>>>>>>>>
“We have not succeeded in answering all
of your problems/questions – indeed, we
have not completely answer any of them.
The answers we have provided only serve
to raise a whole new set of questions. In
some ways we feel as confused as ever,
but we hope that we are confused on a
much higher level,... about more
important things.”