Healthcare Strategy: In Pursuit of Competitive Advantage

305 Pages·2004·1.32 MB·English

by  Roice D. Luke

Healthcare
Strategy
(cid:1) (cid:2) (cid:3) (cid:4)
n ursuit of ompetitive dvantage
aupha/hap Editorial Board
Kenneth R. White, ph.d., fache, Chair
Virginia Commonwealth University
Sharon B. Buchbinder, r.n., ph.d.
Towson University
Jeptha W. Dalston, ph.d., fache
AUPHA
Joanne Dochterman, ph.d.
University of Iowa
Kerry E. Kilpatrick, ph.d.
University of North Carolina
Beaufort B. Longest, ph.d., fache
University of Pittsburgh
William C. McCaughrin, ph.d.
Trinity University
Thomas McIlwain, ph.d.
Medical University of South Carolina
Louis Rubino, ph.d., fache
California State University–Northridge
Dennis G. Shea, ph.d.
Pennsylvania State University
Mary E. Stefl, ph.d.
Trinity University
Linda E. Swayne, ph.d.
University of North Carolina–Charlotte
Douglas S. Wakefield, ph.d.
University of Iowa
Frederick J. Wenzel
University of St. Thomas
Healthcare
Strategy
(cid:1) (cid:2) (cid:3) (cid:4)
n ursuit of ompetitive dvantage
Roice D. Luke
Stephen L. Walston
Patrick Michael Plummer
aupha
hap
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not represent the official positions of the American College of Healthcare Executives, of the
Foundation of the American College of Healthcare Executives, or of the Association of
University Programs in Health Administration.
Copyright © 2004 by the Foundation of the American College of Healthcare Executives.
Printed in the United States of America. All rights reserved. This book or parts thereof may
not be reproduced in any form without written permission of the publisher.
08 07 06 05 04 5 4 3 2 1
Library of Congress Cataloging-in-Publication Data
Luke, Roice D.
Healthcare strategy: in pursuit of competitive advantage / Roice D. Luke, Stephen L.
Walston, Patrick Michael Plummer.
p. cm.
Includes bibliographical references and index.
isbn1-56793-215-0 (alk. paper)
1. Medical policy—United States. 2. Health planning—United States. 3. Health care
reform—United States. I. Walston, Stephen Lee. II. Plummer, Patrick Michael. III. Title.
RA395.A3L84 2003
362.1’0973—dc22 2003056608
The paper used in this publication meets the minimum requirements of American National
Standard for Information Sciences—Permanence of Paper for Printed Library Materials,
∞
ansiZ39.48-1984. ™
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J. Karvelaitis; Cover designer: Trisha Lartz
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Brief Contents
Preface xi
Part I: Concepts and Context 1
1. The Concept of Strategy 3
2. Strategy Analysis Framework 29
3. Strategic Intent 59
Part II: The Markets 85
4. Market Structure 87
Part III: Sources of Competitive Advantage 123
5. Pace Strategies 125
6. Position, Potential, and Performance Strategies 147
7. Power Strategies 173
8. Horizontal Expansion 203
9. Vertical Integration 233
10. Organizational Structure 253
Index 277
About the Authors 285
v
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Detailed Contents
Preface xi
Part I: Concepts and Context 1
1. The Concept of Strategy 3
The Evolution of Strategy 4
Concept in Search of a Definition 9
Strategy Note 1.1. Mintzberg’s Concepts of Pattern and 12
Organizational Learning
Strategy Note 1.2. The Case of Food Lion:Using Strategies 17
or Tactics?
Competitive Advantage 18
The Sources of Competitive Advantage 21
29
2. Strategy Analysis Framework
29
Framing Strategy Analysis
30
Strategy Note 2.1. The Porter Perspective Mislabeled
33
Strategy Note 2.2. Definitions
38
Strategy Note 2.3. Monopoly Power or Superior Resources?
43
A Summary Framework for Strategy Analysis
49
Strategy Tool A. SWOT Analysis
54
Strategy Tool B. Scenario Analysis
59
3. Strategic Intent
60
The Development of Strategic Intent
64
Strategy Note 3.1. Utah Challenges Intermountain Health
Care on Tax Status
Strategy Note 3.2.For-Profit Companies and Community 65
Obligations
Strategy Note 3.3. Institutional Theory Applied to 68
Healthcare
Values 69
Mission and Vision 75
vii
viii healthcare strategy
Part II: The Markets 85
4. Market Structure 87
Basic Concepts of Market Structure 88
Key Dimensions of Market Structure 92
Porter’s Five Forces Framework 104
Stages of Market Growth 115
Part III: Sources of Competitive Advantage 123
5. Pace Strategies 125
Pace 126
Strategic Orientation 133
Organizational Culture and Capabilities 142
6. Position, Potential, and Performance Strategies 147
Position 148
Potential 156
Performance 162
7. Power Strategies 173
Absolute Power Versus Relative Power 174
Strategy Note 7.1. Relative Power and the U.S. Military: 176
Two Examples
Types of Power Strategies 178
Corporate Strategy Versus Business Unit Strategy 182
Sequence of Strategic Growth 191
Strategy Tool C. Portfolio Analysis Tools 198
8. Horizontal Expansion 203
Ownership Types 204
Levels and Dimensions of Horizontal Expansion 208
Geographic Configuration at the Company Level 213
Strategy Note 8.1. MedCath: A Specialty System’s 216
Horizontal Expansion
detailed contents ix
Strategy Note 8.2. Kaiser: A Vertically Integrated 217
Organization’s Horizontal Expansion
Geographic Configuration at the Local Level (Urban) 221
Strategy Note 8.3. Is Hierarchical Configuration 225
Horizontal or Vertical?
Strategy Note 8.4. The Texas Medical Center 226
HCA’s Horizontal Expansion Strategies 226
9. Vertical Integration 233
Vertical Integration Basics 234
Limitations 238
Strategy Note 9.1. Humana: Complications with Vertical 241
10. Organizational Structure 253
Organizational Structure Basics 254
Structural Forms 255
Strategy Note 10.1. The Case of Centura Health System: 256
A Failure to Align Structure and
Strategy
Strategy as a Determinant of Structure 269
Index 277
About the Authors 285