Professional Integration

Running Head : Professional Integration

Name

Course

Tutor

August 17th , 2010

Introduction

A striking development in health care market place has been of strategic relationship between hospitals and physicians . Hospitals-physicians integration appears to be a response to rapidly expanding managed care health insurance . A number of scholars have hypothesized that hospitals-physician integration likely leads to efficiency gains by facilitating the exploitation of transactions cost economies such as being better able to deal with incomplete contracting challenges and economies of scope (Santere Neun , 2010

Physicians in increasing numbers

are realizing that participation in some form of integration is necessary to not only decrease operating cost of individual 's practices but to effectively compete . There are myriad integration options available to physicians . Choices among the various options depends on expectations , future goals , level of autonomy desired and the degree of risk they are willing to assume to consummate the deal (Cuellar Gertler , 2006

Specifically , integrated organizations have higher prices than stand-alone hospitals and the differences are larger for exclusive arrangements and in less competitive markets . However , integrated organizations are no more efficient than stand-alone hospitals

Discussion

Hospital -physician integration likely reflects providers organizational responses to competitive pressures from rapidly expanding managed care health insurance . Further to this , it has been hypothesized that hospital-physician integration likely leads to Efficiency gains by facilitating the exploitation of transaction cost economies such as being able to deal with incomplete contracting challenges and economies of scope , where the more efficient integrated organization is able to offer lower prices...