Effect of organizational and environmental factors on service differentiation strategy of integrated healthcare networks

Abstract

During the past decade, the missions/goals of medical providers of healthcare services in the United States have shifted - from emphasizing individual, independent illness treatments to focusing on the continuum of care, population-based wellness, and providing the appropriate care in the most efficient way. Integrated healthcare networks (IHNs) - or integrated healthcare delivery systems - have been focusing heavily on their level of various partnership integration (i.e. service differentiation strategy) in order to offer a full continuum of care. The aim of this study, using the individual IHN as the unit of analysis, was to identify organizational and environmental factors that influence IHN administrators to focus on their service differentiation of market lines, including the establishment of third-party payers' contracts, the affiliation of managed-care organizations, and the alliances of various nonhospital medical providers, to provide a continuum of care. The study findings show that tax status of an IHN, its age, and market competition affect its service differentiation strategy in the provision of a full continuum of care.