Vertical integration and organizational networks in health care

Health Affairs

Volumn 15, Issue 1, 1996, Pages

  Robinson, James C ^a   Casalino, Lawrence P ^b  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b STANFORD UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

ARTICLE; COMMUNITY CARE; FINANCIAL MANAGEMENT; GROUP PRACTICE; HEALTH MAINTENANCE ORGANIZATION; HOSPITAL ORGANIZATION; HUMAN; INTEGRATED HEALTH CARE SYSTEM; ORGANIZATION AND MANAGEMENT; PATIENT CARE; UNITED STATES;

CALIFORNIA; COMMUNITY NETWORKS; CONTRACT SERVICES; DELIVERY OF HEALTH CARE, INTEGRATED; GROUP PRACTICE; HEALTH MAINTENANCE ORGANIZATIONS; HOSPITAL-PHYSICIAN JOINT VENTURES; HUMANS; PATIENT CARE TEAM;

EID: 0001802470     PISSN: 02782715     EISSN: None     Source Type: Journal    
DOI: 10.1377/hlthaff.15.1.7     Document Type: Article

References (23)

1. Thomas Hobbes provides an insightful description of first-generation managed care in Leviathan, Part 1, Chapter 13 ("Of the Natural Condition of Mankind, as Concerning Their Felicity, and Misery") (1651; reprint, New York: Penguin Books, 1968).
2. Marion Merrell Dow, Managed Care Digest: HMO Edition (Kansas City: Marion Merrell Dow, Inc., 1994).
3. U.S. General Accounting Office, Medicare Managed Care: Growing Enrollment Adds Urgency to Fixing HMO Payment Problem (Washington: GAO, 1995).
4. E.A. Kerr et al., "Managed Care and Capitation in California: How Do Physicians at Financial Risk Control Their Own Utilization?" Annals of Internal Medicine 123 (1995): 500-547.
5. The information in Exhibit 1 on enrollment, ownership, and relations with hospitals was developed through in-person interviews over a two-year period, checked against available information in the trade press.
6. G.C. Pope and R.J. Burge, "Inefficiencies in Physician Practice," Advances in Health Economics and Health Services Research, vol. 13, ed. R.M. Scheffler and L.F. Rossiter (Greenwich, Conn.: JAI Press, 1992), 129-164.
7. The Advisory Board, To the Greater Good: Recovering the American Physician Enterprise (Washington: The Advisory Board, 1995).
8. For an introduction to the economic literature on transaction costs and organizational boundaries, see O.E. Williamson, "Transactions Cost Economics," in Handbook of Industrial Organization, ed. R. Schmalensee and R.D. Willig (Amsterdam: Elsevier Science Publishers, 1989).
9. For an introduction to the literature on the organizational determinants of innovation, see G. Dosi, "Sources, Procedures, and Microeconomic Effects of Innovation," Journal of Economic Literature 25 (1988): 1120-1171.
10. S. Greenfield et al., "Variations in Resource Utilization among Medical Specialties and Systems of Care," Journal of the American Medical Association 267 (1992): 1624-1630.
11. D.J. Teece, "Economies of Scope and the Scope of the Enterprise," Journal of Economic Behavior and Organization 1 (1980): 223-247.
12. J.C. Robinson and L.P. Casalino, "The Growth of Medical Groups Paid through Capitation in California," The New England Journal of Medicine 333, no. 25 (1995): 1684-1687.
13. J.C. Goldsmith, "The Illusive Logic of Integration," Healthcare Forum Journal 37 (1994): 26-31.
14. R. Kronick et al., "Special Report: The Marketplace in Health Care Reform," The New England Journal of Medicine 328, no. 2 (1993): 148-152.
15. Robinson and Casalino, "The Growth of Medical Groups Paid through Capitation in California;" and Governance Committee, Capitation Strategy (Washington: The Advisory Board, 1994).
16. For an introduction to the economic literature on the vertical integration and the contractual alternatives, see O.E. Williamson, The Economic Institutions of Capitalism (New York: The Free Press, 1985). Also see B. Klein, R. Crawford, and A.A. Alchian, "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics 21 (1978): 297-326.
17. For an introduction to the economic literature on the vertical integration and the contractual alternatives, see O.E. Williamson, The Economic Institutions of Capitalism (New York: The Free Press, 1985). Also see B. Klein, R. Crawford, and A.A. Alchian, "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics 21 (1978): 297-326.
18. In many economic contexts environmental change and uncertainty are too great to permit the explicit treatment of all possible contingencies in formal contracts. Economic agents develop long-term relationships based on bilateral exchange, reputations, investments in nonredeployable assets, and other forms of "credible commitment." These informal features of the relationship support the incomplete formal contractual agreements. For a general treatment of relational contracting, see I.R. Macneil, "Contracts: Adjustments of Long-Term Economic Relations under Classical, Neoclassical, and Relational Contract Law," Northwestern University Law Review 72 (1978): 854-906. For a general treatment of credible commitments, see O.E. Williamson, "Credible Commitments: Using Hostages to Support Exchange," American Economic Review 73 (1983): 519-540.
19. In many economic contexts environmental change and uncertainty are too great to permit the explicit treatment of all possible contingencies in formal contracts. Economic agents develop long-term relationships based on bilateral exchange, reputations, investments in nonredeployable assets, and other forms of "credible commitment." These informal features of the relationship support the incomplete formal contractual agreements. For a general treatment of relational contracting, see I.R. Macneil, "Contracts: Adjustments of Long-Term Economic Relations under Classical, Neoclassical, and Relational Contract Law," Northwestern University Law Review 72 (1978): 854-906. For a general treatment of credible commitments, see O.E. Williamson, "Credible Commitments: Using Hostages to Support Exchange," American Economic Review 73 (1983): 519-540.
20. A.D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Harvard University Press, 1990); E. Penrose, The Theory of the Growth of the Firm (New York: John Wiley and Sons, 1959); and R.G. Eccles and H.C. White, "Price and Authority in Inter-Profit Center Transactions," American Journal of Sociology 94 (Supplement 1988): 17-51. On the impossibility of selective intervention, see Williamson, The Economic Institutions of Capitalism.
21. A.D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Harvard University Press, 1990); E. Penrose, The Theory of the Growth of the Firm (New York: John Wiley and Sons, 1959); and R.G. Eccles and H.C. White, "Price and Authority in Inter-Profit Center Transactions," American Journal of Sociology 94 (Supplement 1988): 17-51. On the impossibility of selective intervention, see Williamson, The Economic Institutions of Capitalism.
22. A.D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Harvard University Press, 1990); E. Penrose, The Theory of the Growth of the Firm (New York: John Wiley and Sons, 1959); and R.G. Eccles and H.C. White, "Price and Authority in Inter-Profit Center Transactions," American Journal of Sociology 94 (Supplement 1988): 17-51. On the impossibility of selective intervention, see Williamson, The Economic Institutions of Capitalism.
23. A.D. Chandler, Scale and Scope: The Dynamics of Industrial Capitalism (Cambridge: Harvard University Press, 1990); E. Penrose, The Theory of the Growth of the Firm (New York: John Wiley and Sons, 1959); and R.G. Eccles and H.C. White, "Price and Authority in Inter-Profit Center Transactions," American Journal of Sociology 94 (Supplement 1988): 17-51. On the impossibility of selective intervention, see Williamson, The Economic Institutions of Capitalism.