1996
DOI: 10.1377/hlthaff.15.1.7
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Vertical Integration and Organizational Networks in Health Care

Abstract: 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… Show more

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Cited by 206 publications
(115 citation statements)
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“…22 It represents the devolution of a PHO into a holding company structure where the physicians and hospitals contract with each other on a nonexclusive basis rather than seek to create a vertically integrated system. 23 …”
Section: Methodsmentioning
confidence: 99%
“…22 It represents the devolution of a PHO into a holding company structure where the physicians and hospitals contract with each other on a nonexclusive basis rather than seek to create a vertically integrated system. 23 …”
Section: Methodsmentioning
confidence: 99%
“…We agree with Luke that health networks have evolved over time in these ways, but it is important to remember the context in which the taxonomy was developed. During the mid-1990s, health networks were engaged in efforts to develop organized delivery systems and they represented an alternative to tight ownership-based models (Dowling 1995;Robinson and Casalino 1996;Shortell et al 1996).…”
Section: Relevance Of Conceptual Framework To Health Network Versus mentioning
confidence: 99%
“…Two developments are noteworthy. Firstly, these organisations have not been tightly structured like the classical staff model HMO ('vertical integration'), but tied together by internal contracting based around shared information systems ('virtual integration') (Robinson & Casalino 1996). Secondly, they have proceeded to the next step of offering their services directly to funders (that is, large employers), thereby cutting out the third-party intermediaries or, to put it another way, they have moved to take over or internalise the budget-holding function, in the same way as the classical␣ HMOs.…”
Section: Provider Restructuringmentioning
confidence: 99%