| During recent years, the rapid changes in the health care environment have led to redefinition of the mission of medical organizations. From economic, political, and social perspectives, "integration" is being viewed as a strategy to improve the quality of services and accessibility, enhance product offerings, strengthen customer relationships, improve operating efficiency, and reduce unit costs. In actuality, however, "integration" may not necessarily bear such fruitful results.;Integrated health networks (IHNs), one type of integrated organization, are empirically examined in this study. IHNs are characterized as healthcare facilities, programs, or services vertically and horizontally aligned in order to offer a coordinated continuum of health care to a defined geographic population, and that are willing to be held responsible clinically (i.e., improving quality) and fiscally (i.e., reducing costs) for the health status of that population. Using an integrated health network as the unit of analysis, the aim of this study is to identify the factors affecting IHNs' performance and especially to examine the relationships among the external environment, organizational strategic direction, structural design, and performance.;This study performs a cross-sectional analysis of one hundred integrated health networks that were recognized as America's most integrated health systems in 1997 and listed in the IHN Top 100 Directory (1998). From multivariate analysis of the data, it was found that IHNs' inertial pressures or organizational characteristics show more statistically significant effects on their service differentiation strategies, integrated structural design, clinical efficiency, and financial viability than do environmental factors. Multivariate analysis also revealed that market competition is significantly and positively associated with integrated structural design. Not-for-profit integrated health networks tend to adopt service differentiation strategies, and for-profit integrated health networks tend to have better financial viability. Those with higher percentages of special and intensive services are more likely to have an integrated structural design. Teaching intensity is negatively related to clinical efficiency. The number of member hospitals in an IHN is negatively associated with an IHN's use of the service differentiation strategy.;It was found that a health care system with a higher degree of integration, which boasts of geographic reach and coordinated administrative, clinical, information and financial systems of care, may not have improved its performance in cost and process efficiency and financial viability. In the use of integrated strategy, the tradeoff between improved quality of services and performance in clinical efficiency and financial viability should be further explored. The dilemma that providing an integrated continuum of patient care to improve clinical quality has costs in terms of clinical efficiency and profitability is one that needs to be resolved. New insights through a further study using a panel study design and a larger number of IHNs might give an integrated organization's top decision-makers some guidance for establishing an integrated system that is both effective and efficient. |
