Health Systems Administration Essay Example | Topics and Well Written Essays - 750 words

Health Systems Administration - Essay Example These industries require a specific type of integration specifically based on the standards followed, such as HIPPA (healthcare), UCCnet (retail), RossettaNet (high-tech), and GSTP (finance). Horizontal integration is type of integration, which is universal to all the industries, such as basic integration services including transformation, routing, adapters, flow control, etc. Vertical integration strategies are related to higher levels of managed care penetration within the market. Further, hospitals espousal vertical integration strategies reveal that they have more chances of formalization of integration activities than horizontally integrated facilities. An attractive feature of the horizontal model is that it allows one readily to infer the effect of a merger on price and cost. Horizontal consolidation, by definition, increases market concentration, so one can estimate the impact of consolidation simply by examining the effect of increases in market concentration. ... But, in spite of this fact, there is a paradigm shift from one system to another, for number of complexities existing in both the type of systems. As a result of this, many organizations follow both the type of integration systems. Excess provider capacity, specially in the form of over bedding and an oversupply of specialists, has established a new market for medical services in which insurers can rent physician and hospital services at the cost which is far less then the average costs associated with them as in case of vertically integrated system. Less opportunities of expansion in vertical integrated system diverts the insurers to concentrate on health plan management. The creation of an effective electronic medical record is extremely messy process. The emergence of new technologies helps the insurers to track and report individual provider performance against peer group and regional/national norms. Technology has therefore provided an alternative to outright insurer ownership o f physicians and hospitals as a means of reducing administrative costs. A critical basis of competitive advantage that was originally postulated for vertically integrated health plans -- superior clinical outcomes quality -- has therefore gone largely untested, in terms of both whether integrated companies can actually produce these differentiated results and whether customers will change their enrollment patterns based on them. The current stage of evolution in the supply and demand of "health care quality," then, hasn't supported the need for vertical integration between payers and providers The pure horizontal model, however, is not well equipped to explain the impact of hospital