Proponents for this Integrated Delivery Network (IDN) system believes that the pivotal benefit of employing such a system is to offer patients a uniformed system comprising all entities and services. Records will be available in one location and all providers collaborate and share patients’ information (Goldsmith, Burns, Sen, & Goldsmith, 2015). Furthermore, IDNs can tackle problematic illnesses such as chronic disease management, which are usually treated by separate entities and thus a comprehensive medical record is not available. It is housed in several silos. According to Devers et al., another benefit of IDNs is that it aids in provider shortages and functions extremely well in ambulatory surgery centers and urgent care centers (as cited
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Administrative task savings are found by utilizing internal hierarchies and controls instead of market transactions to organize activities (as cited in Goldsmith et al., 2015). “These types of efficiency gains are typically considered a key rationale for vertical integration in any setting, resulting from increased centralized control and coordination across stages of production and economics of information and technology, as well as potentially reduced costs of monitoring and negotiation due to gains in mutual dependence and trust from integration” (as cited in Goldsmith et al., …show more content…
For example, some people are skeptical about its use in enhancing market power and competitiveness between them. Also, according to Goldsmith et al.(2015), there is concern that by “consolidating with upstream suppliers gains hospital-physician firms monopoly or quasi-monopoly power, in turn improving bargaining power for negotiations with managed care plans and other insurers and increasing price leverage”. In addition, there is a risk of vertical foreclosure. However, the findings are inconsistent to prove this issue. Some entities suggest that the hospital-physician relationship may create differentiation within the market and it’s a tactic by the hospitals to retain its exclusive clients i.e., its physician referrals. As a result, this will hinder any challengers’ access to these exclusive patients. However, from the hospital’s standpoint, they view this as a protection method which prevents the physicians from competing directly with the hospital. For instance, foiling any physician’s attempt on the hospital outpatient care market. In addition, the hospital hopes to boost the IDNs competitive capability with formidable opponents (like Imaging centers and Ambulatory surgical centers) into the outpatient and the inpatient markets. In contrast, there are others who believe that combining two influential actors (hospital and a medical group)
Administrative task savings are found by utilizing internal hierarchies and controls instead of market transactions to organize activities (as cited in Goldsmith et al., 2015). “These types of efficiency gains are typically considered a key rationale for vertical integration in any setting, resulting from increased centralized control and coordination across stages of production and economics of information and technology, as well as potentially reduced costs of monitoring and negotiation due to gains in mutual dependence and trust from integration” (as cited in Goldsmith et al., …show more content…
For example, some people are skeptical about its use in enhancing market power and competitiveness between them. Also, according to Goldsmith et al.(2015), there is concern that by “consolidating with upstream suppliers gains hospital-physician firms monopoly or quasi-monopoly power, in turn improving bargaining power for negotiations with managed care plans and other insurers and increasing price leverage”. In addition, there is a risk of vertical foreclosure. However, the findings are inconsistent to prove this issue. Some entities suggest that the hospital-physician relationship may create differentiation within the market and it’s a tactic by the hospitals to retain its exclusive clients i.e., its physician referrals. As a result, this will hinder any challengers’ access to these exclusive patients. However, from the hospital’s standpoint, they view this as a protection method which prevents the physicians from competing directly with the hospital. For instance, foiling any physician’s attempt on the hospital outpatient care market. In addition, the hospital hopes to boost the IDNs competitive capability with formidable opponents (like Imaging centers and Ambulatory surgical centers) into the outpatient and the inpatient markets. In contrast, there are others who believe that combining two influential actors (hospital and a medical group)