The Reducing Hospital Costs through Horizontal Integration

  • Pavla Staňková Department of Management and Marketing, Faculty of Management and Economics, Tomas Bata University, Zlín, Czech Republic
  • Šárka Papadaki Department of Enterprise Economics, Faculty of Management and Economics, Tomas Bata University, Zlín, Czech Republic
  • Ján DVORSKÝ Department of Enterprise Economics, Faculty of Management and Economics, Tomas Bata University, Zlín, Czech Republic
Keywords: Hospitals; Costs; Horizontal integration; Effectiveness; Cost reduction

Abstract

Abstract

Background: This paper investigated the impact of hospitals´ horizontal integration in the Czech Republic on the cost behavior. The aim of the research was to examined the hospitals costs in specific environment of region hospitals at NUTS 3 level (Nomenclature of Units for Territorial Statistics) – Administrative Regions.

Methods: The survey was conducted in the period from April to August 2016 in the Czech Republic. The research was divided into two parts. The first part was based on data obtained from the Institute of Health Information and Statistics of the Czech Republic. We used Statgraphics Centurion XVII for the descriptive statistics and data visualization. Second part of the results was obtained through a survey research focused on managers of the horizontal integrated hospitals and their experiences with the cost behavior.

Results: The results from statistical survey showed that up to 80 percent of the observed region hospitals at NUTS 3 level, the cost of treatment for a patient per day has decreased after integration into an association. Based on primary survey, 73% hospital managers confirm these results and see one of the advantages that it is possible to reduce costs through integration of hospitals. The largest savings, according to hospital managers, are due to central purchasing and investments, together and they have a better negotiation position with suppliers.

Conclusion: We can confirm that horizontal integration of hospitals can lead to reduction of costs and higher efficiency, in the specific environment of region hospitals at NUTS 3 level. 

 

 

References

1. Lake T, Devers K, Brewster L, Casalino L (2003). Something Old, Something New: Recent Developments in Hospital-Physician Relationships. Health Serv Res, 38(1): 471-488.
2. Ackerman FK 3rd (1992). The movement toward vertically integrated regional health systems. Health Care Manage Rev, 17: 81–88.
3. Matysiewicz J (2011). Network Development and Application in Health Care Sector: A Study of Systemic Service. Econ Soc, 4(1): 83-97.
4. Zuckerman AM (2006). Clobber – or col-laborate? Taking a fresh look at your competition. Healthc Financ Manage, 60(11): 68-72.
5. Halverson PK, Kaluzny AD, Young GJ (1997). Strategic alliances in healthcare: Opportunities for the veterans affairs healthcare system. Hosp Health Serv Adm, 42(3): 383-410.
6. Wolper, LF (2004). Health Care Administration: Planning, Implementing, and Managing Orga-nized Delivery Systems. 4th ed. New York: Jones & Bartlett Learning.
7. Cullear AE, Gentler PJ (2006). Strategic inte-gration of hospitals and physicians. J Health Econ, 25(1): 1-28.
8. Baker LC, Bundorf MK, Kessler DP (2014). Vertical integration: Hospital ownership of physician practices is associated with higher prices and spending. Health Aff (Millwood), 33(5): 756-63.
9. Cho NE (2015). Costs of Physician-Hospital Integration. Medicine (Baltimore), 94(42): 1762.
10. Alexander J, Morrisey M (1988). Hospital-Physician Integration and Hospital Costs. Inquiry, 25(3): 388-401.
11. Bazzoli GJ, Dynan L, Burns LR, Lindrooth R (2000). Is provider capitation working? Effects on physician–hospital integration and costs of care. Med Care, 38: 311–324.
12. Büchner VA, Hinz V, Schreyögg J (2015). Cooperation for a competitive position: The impact of hospital cooperation be-havior on organizational performance. Health Care Manage Rev, 40(3): 214-224.
13. Dranove D, Durkac A, Shanley M (1996). Are multihospital systems more efficient? Health Affairs, 15(1): 100-104.
14. Alexa J, Rečka L, Votápková J, van Ginneken E, Spranger A, Wittenbecher F (2015). Czech Republic: Health system re-view. Health Syst Transit, 17(1):1–165.
15. Institute of Health Information and Statistics of the Czech Republic (2004-2016). Eco-nomic information on health care, 2004-2016. Available: http://uzis.cz/en/catalogue/economic-information-health-care
16. Walston SL, Kimberly JR, Burns LR (1996). Owned vertical integration and health care: Promise and performance. Health Care Manage Rev, 21(1): 83-92.
17. Dranove D, Lindrooth R (2003). Hospital Consolidation and Costs: Another Look at the Evidencem. J Health Econ, 22(6): 983-997.
Published
2019-11-03
How to Cite
1.
Staňková P, Papadaki Šárka, DVORSKÝ J. The Reducing Hospital Costs through Horizontal Integration. Iran J Public Health. 48(11):2016-2024.
Section
Original Article(s)