Adapting a Model of Alliance Evolution to the Health Care Sector

1
Adapting a Model of Alliance Evolution to the
Health Care Sector

• Rebecca Wells, Penn State
• Bryan Weiner, UNC

2
What We Know about Alliances

• Interorganizational cooperation
• Two or more organizations formally seek common
  interests
• Visibility
• Bargaining power
• Economies of scale
• Partners remain legally autonomous

3
What We Dont Know

• Functioning after formation
• How do they achieve their goals?

4
Dozs Learning-Based Model

• 6 new product development efforts within 3
  corporate alliances
• Comparing successful to unsuccessful efforts
• Grounded theorizing

5
Integrative Evolution in the Corporate Sector Doz
1996
Initial Conditions
Learning about
Re-Evaluation
Member Readjustments
Cooperative task definition
Environment
Efficiency
Task
Facilitate/ hamper
Partner routines
Equity
Commitment/ Withdrawal
Success/ Failure
Process
Cooperative structure
Adaptability
Skills
Partner expectations
Goals
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Why Health Care Alliances May Differ

• Environments
• Heavily regulated
• Highly fragmented
• Organizations often
• Nonprofit
• Small, less
• Alliances
• Multilateral
• Different strategic objectives

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Community Health Center Alliances as Extreme
Cases

• Federal, state payer dominance
• Nonprofits, user majority boards
• Small, thin total margins
• May have gt 1 dozen partners
• Operational goals

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Study Sample

• 5 matched pairs of community health center
  efforts to integrate core operational functions
• 5 successful 5 challenging
• Managed care contracting (1 pair)
• Information systems (1 pair)
• Human resources (1 pair)
• Clinical improvement (2 pairs)
• Median age of integration effort 2.5 years

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Study Sample

• Integration efforts nested within 6 community
  health center alliances
• Throughout US
• All but 1 non-profit
• Range of member organizations 7-18
• 2-8 integrated functions in each
• Median alliance age 5 years

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Data Collected

• Interview 39 individuals (3-8 per integration
  effort range of levels, roles within alliances)
• Archival
• Observational
• Follow-up 2 years later with key informants about
  integration progress

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Analyses

• Narrative case summary
• Visual process map
• Coding, iterating from start list
• Analysis of coded data
• Frequency (relevance) of each code (factor)
  across integrations
• Comparisons between challenging and successful
  overall, within matched pairs
• Assessment of successful vs. unsuccessful path
  divergence

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Integrative Evolution among CHCs Adapted from Doz
1996
Initial Conditions
Learning about
Re-Evaluation
Member Re-Adjustments
Integrative Outcome
Cooperative task definition
Environment
Efficiency
Task
Momentum/ Stagnation
Cooperative structure
Success /Failure
Commitment/Withdrawal
Equity
Processes
Adaptability
Partner expectations
Goals
Stakeholder/ regulatory environment
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Initial Conditions Cooperative Task Definition

• Salient in 6 efforts
• Problematic in 3 of 5 challenging
• Unrealistic
• Peripheral
• Positive in 3 of 5 successful
• Central
• Perception of previous failure

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Initial Conditions Partner Routines

• Salient in 6 efforts
• Negative in both some successful and challenging
• Successful used network staff credibility to
  overcome front line resistance
• Challenging struggled with discrepant routines

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Initial Conditions Cooperative Structure

• Almost total correspondence between initial
  structure and /- outcomes
• Low initial time investment in challenging
  efforts
• Active engagement in successful

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Initial ConditionsPartner Expectations

• Salient in 9 out of 10 efforts
• At least partly in 4 of 5 challenging efforts
• in 4 of 5 successful efforts
• Trust, realism, openness

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Initial Conditions External Environment

• New
• Uncertainty affected later learning in 3 of 5
  challenging efforts

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Learning about Environment

• Negative for 4 of 5 challenging efforts
• Market, legal constraints
• for only 2 successful
• Market opportunities
• Government pressure to stay engaged

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Learning about Tasks and Processes

• Generally negative for challenging
• Sparse for successful
• Operational integration foci

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Learning about Skills

• Uniformly negative when relevant
• Front line staff skill deficiencies about
  existing processes

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Learning about Goals

• Negative for 3 challenging at least partially
  for 4 successful
• Commonality key
• Previous work relationships may have masked

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Re-evaluation

• Efficiency most salient
• The money aspect is always going to be the root
• Equity less salient, but linked to efficiency
• Adaptability in turn linked to equity

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Momentum

• New
• Salient problem in all 5 challenging
  integrations mixed in successful
• Safety net relevance
• Resource scarcity
• Operational integration

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Implications for Management Policy

• Know your market
• Beware of divergent interests
• Plan for sustainability, aware of fragility
• Policy makers consider paying for public goods

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Implications for Theory

• In general, Dozs model applies to an extreme
  case in the health care safety net
• Some modifications
• Pre-existing routines, member skills more
  uniformly problematic
• Cooperative structure, goals may help overcome
• Study contributes operational definitions

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Next Steps

• More specificity
• What types of integration yield what benefits for
  whom?
• More process studies
• How, under what conditions, over what time frames?