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Summary HPI4001 Case 4
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Lecture Case 4: Organization, integration andeconomics (EH)
Sometimes we look at innovation from an organizational perspective. We take organization as unit
of analysis (what we focus on). In the previous case; in the HTA analysis the unit of analysis was an
intervention. However for this lecture we take a look at organizations/firms.
Organization: a decision-making unit engaged in production (Hall)
-Example: Maastricht University
Organizations have boundaries since there is a group of people within and outside the organization
-> Boundaries of the firm: all of activities that the firm engages in -> scope.
= When it is outside the scope of the organization, you go to a consultant for example.
-Example in healthcare: academic hospitals provide common hospital service (=curable services) but
not long term care of home care (you need to go to another organization which does provide this). So
this is a boundary of an academic hospital.
Organizations operate in a supply/value chain: for organizations you need to understand where
input comes from and were output goes.
-Example: Firm A (Minerals: collects ingredients for product) -> Firm B (Pharmaceutical company:
makes product) -> Firm C (Pharmacy: sells product to consumers)
-> So every company has its own expertise and is dependant on other companies and therefore
operates in a line.
-Each step in the line, makes the product closer to the consumer.
In reality the value chain depends on the situation. In healthcare for example, normally you would
first go to the GP before you will be referred to the hospital (in this case the GP is included in the
value chain). However when you go to the emergency room, you will directly go to the hospital (in
this case the GP is not included). So in reality value chains are complex (due to large scope of
different activities that a hospital is involved in).
Institutions: the legal, political social rules of the game. Any type of rule that influences behaviour of
organizations (so it is not the same as organizations).
(Neo) Institutional economics: many economic activities do not take place on the market but e.g.
within organizations, firm or other types of organizational arrangements.
-Many economic activities are embedded in a legal, political, social and economic framework
(‘Institutions’)
-These institutions affect economic activities and economic performance.
So according to (neo) institutional economics: institutions matter
There is a need to question the impact of institutions one economic activities and economic
performance
There is a need to question how economic activities can best be organized to obtain the best
economic performance
1
, Integration: the process of achieving unity of effort among the various subsystems (within the
organization) in the accomplishment of the organization’s task (Lawrence & Lorsch)
-They also established the contingency theory
-How parts of organizations should work as a whole -> so that they are aligned
-Later this definition was also used to integrate parts of the value chain so that different companies
were aligned as well (not only within the organization anymore)
Integrated care: an entire treatment process across entire value chain going from GP to hospital,
home organizations etc
all of this should to go seamless and coordinated: one organization should know what the
other one already has done and should not be unnecessary waiting or hurdles (smoothly)
Object of integration: activities within or between organizations.
Some say it is more about integrating the care
What should we focus on (from patient perspective or organization perspective)
Types of integration:
Structural: actual integrations of organizations within an organizations (physical, operational,
financial or legal ties among organizations -> take-over etc).
-Lets become part of the organization
Functional: formal, written policies and protocols for activities that coordinate and support
accountability and decision making among organizations and individuals
Normative integration: about making sure that cultures between teams/cross-organizations
are similar (should improve care that they have due to common culture)
Interpersonal: about collaboration between different professionals at interpersonal level
from one or more disciplines. Also about collaboration between nonprofessional caregivers
and patients themselves(how does this lead to more integration of care)
Process: processes or specific activities that care is delivered in coordinated manner (to see
patient process as a whole and not separate processes for GP and hospital e.g.)
Conceptual model of integration types:
1. Organizational features: structural and functional integration
2. Social features: normative and interpersonal integration
3. Activities: process integration
These types of integration should lead to intermediate outcome (integrated patient care)
This intermediate outcome leads to different outcomes such as
-Patient experience
-Provider satisfaction
-Patient health
-Efficiency (we focus on this one
because we are in economics course)
For the rest of the lecture, we are going to
look at organizational features and what will
lead to certain types of outcomes.
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