DISCUSSION

Description

Healthcare Organizational and Market Structures

Note: Before completing this Discussion, please familiarize yourself with the Week 3 Discussion 1 Rubric located in the Course Information area of the course navigation menu.

In an industry as complex as healthcare, organizational and market structures must be carefully considered. For example, hospitals need to have a coordinated care organization model across ambulatory care, acute care, and other settings to participate in accountable care organizations (ACOs) and other value-based care initiatives. Developing these coordinated relationships may require vertical and/or horizontal integration to ensure efficient utilization. Although there are many advantages to integration of organizational and market structures, there are some disadvantages for both the hospital and the providers.

Resources

Be sure to review the Learning Resources before completing this activity.
Click the weekly resources link to access the resources.

WEEKLY RESOURCE

To prepare for these Discussions, first review the following resources for this week:

• Getzen, T. E., & Kobernick, M. S. (2022). Health Economics and Financing (6th ed.). Wiley Global Education US.
  • Chapter 7, “Hospitals” (pp. 136–150)
• • Chapter 11, “Financing and Ownership of Health Care Providers” (pp. 207–228)

• Colla, C. H., Lewis, V. A., Shortell, S. M., & Fisher, E. S. (2014). First national survey of ACOs finds that physicians are playing strong leadership and ownership roles. Health Affairs, 33(6), 964–971.
• Cutler, D., & Scott Morton. F. (2013). Hospitals, market share, and consolidation. Journal of the American Medical Association, 310(18), 1964–1970.
• Fisher, E. S., Shortell, S. M., Kreindler, S. A., Van Citters, A. D., & Larson, B. K. (2012). A framework for evaluating the formation, implementation, and performance of accountable care organizations. Health Affairs, 31(11), 2368–2378.
• Healthcare Financial Management Association. (2014a). An HFMA value project report: Acquisition and affiliation strategies. Westchester, IL: Author. Retrieved from http://www.hfma.org/WorkArea/DownloadAsset.aspx?id…

Then examine the following scenario:

Scenario: You are the chief financial officer (CFO) of a hospital located in a highly competitive, urban market split with two competing hospitals. The hospital is considering purchasing or affiliating with a large physicians’ practice. Your hospital has 30% market share, but does not currently have any owned/employed physicians. Private insurers and Medicare are aggressively pushing value-based reimbursement under ACO contracts, and the one competing hospital has already acquired a large physicians’ practice.

To prepare for this Discussion, analyze the provided scenario. What are the advantages and disadvantages of the vertical integration of the hospital with the physicians’ practice? What economic factors should be considered? Consider strategies for the organizational integration of the hospital and physicians’ practice. Be sure to address the economic factors you identified.

By Day 3, post a cohesive response that includes the following:

• Compare the advantages and disadvantages of the vertical integration of the hospital and physicians’ practice, including economic factors that need to be considered.
• Recommend strategies for the organizational integration of the hospital and physicians’ practice. Defend or argue the merits of your recommendations using economic principles.

General Guidance on Discussion Posts: Your original post, due by Day 3, will typically be 3–4 paragraphs in length as a general expectation/estimate. Refer to the Week 3 Discussion 1 Rubric for grading elements and criteria. Your Instructor will use the rubric to assess your work.

Read a selection of your colleagues’ postings.