Vertical Integration

Over the past six years, I have witnessed Hy-Vee undergo key structural changes, mainly in the pharmacy department. The reorganization process has helped the pharmacies produce more efficient numbers and profits. Structural changes such as a new computer system and a central fill processing facility has improved the work flow. This allows the pharmacist to have more time to help our patients, which is ultimately what our goal is. There were definitely some doubts about whether restructuring would be successful. In order to really comprehend how big of an impact central fill was going to have on our pharmacies, we first need to look at the structure of the Hy-Vee pharmacy and the different components that make it up.

Kaiser Permanente is a not-for-profit integrated health care organization based in Oakland, California, that serves as an umbrella for a federation of for-profit medical groups. The organization was founded in 1945 by industrialist Henry J. Kaiser and physician Sidney R. Garfield.

In the film Escape Fire the Fight to Rescue American Healthcare, there were many insightful examples of why our Unites States healthcare revolves around paying more and getting less. The system is designed to treat diseases rather than preventing them and promoting wellness. In our healthcare industry, there are many different contributors that provide and make up our system. These intermediaries include suppliers, manufacturers, consumers, patients, providers, policy and regulations. All these members have a key role in the functionality of the health care industry; however, each role has its positives and negatives. Each person with an occupation in the healthcare industry is doing their designated job as assigned, but it’s evident that the system’s design is flawed to its core.

Andrew Carnegie used vertical integration in the steel business to great profit. His operation controlled every step of the process from mining the ore, mining the coal, shipping the ore and coal to the foundry, actually making steel from the ores, owning and operating ships and railroads to transport the raw materials and finished goods, etc. What better way to make your business profitable than to arrange for much of the money it spends to be paid to another one of your businesses? Keeps the money in the family, prevents some other company from putting the screws to you by cutting availability or raising prices, and the peripheral businesses (such as railroads and shipping) may be stronger competitors for other business because they have

Physicians and Hospitals go hand in hand when it comes to the medical care of patients, and it is this relationship that allows the patients to receive the care they need and deserve. It is also this relationship that we as health care administrators need to understand. In order to fully understand this relationship we need to define the concept of the integrated physician model. We also need to explain the importance of clinical integration in the strategic planning process, and the dynamics of and controversies surrounding accountable care organizations and alternative approaches to the current health system. I will also explain the advantages and disadvantages for hospitals and physician’s models. All of these things are important for health care administrators to understand about the relationship between a physician and the facility they work at.

A captain of industry can be defined as ¨a business leader whose means of amassing a personal fortune contributed positively to the country in some way.” Andrew Carnegie was an ideal representation of a captain of industry, he was born poor, yet he rose the ranks and became a successful businessman who dedicated his fortune to good causes. Due to his success and innovation in the steel industry and his benevolent donations, Andrew Carnegie was a prosperous businessman who benefited lives across America.

Andrew Carnegie used vertical integration, controlling every step in the process of manufacturing a product, dominating the market. Vertical integration is when the company owns all means of distribution from beginning to end, this makes supplies more reliable and improved efficiency. It controlled the quality of the product at all stages of production. Horizontal integration was used by John D. Rockefeller and is an act of joining or consolidating with one’s competitors to create a monopoly. In Ohio in 1870 he organized the Standard Oil Company. By 1877 he controlled 95% of all of the refineries in the United States. Interlocking directorate is a process of buying out competition and placing officers from one's own banking house on their

There are many stakeholders involved with health care administrations. Those stakeholders can be patients, health care physician, insurance providers, pharmaceutical manufactures, hospital organizations, community clinics and government. Each different stakeholder has their own individual vision of health care administration. This causes conflict due to the nature and differences in vision. which then can cause conflicts among each stakeholder involved. A patient is going to have a different idea of how a health care should be managed. This in contrast to the way a physician may think the administration should be managed. Furthermore, each different stakeholder involved would have their own ideal reasons to why the health care administration

Verizon implements a value chain analysis to understand the parts of the daily operations that create value, and those parts that do not. The value chain analysis is used to determine the level of competition, the type of products and services the consumer needs, and to figure out the ways that Verizon can stay sustainable and remain the market leader in the industry. This is vital because if done correctly Verizon will be able to gain high returns within the telecommunications industry by creating greater value to the customer. Verizon breaks their value chain into primary and support activities. The primary activities are research and development, infrastructure, marketing and sales, and customer

Based on this case the cost driver is to properly distribute the direct cost among the different divisions. Dr. Julian would like to control her departments costs by having them distributed fairly among the divisions without affecting the hospital’s reimbursement/revenue. Carroll University Hospital is currently using the standard costing unit, which is based on the cost of bed/day for inpatients. Currently the present cost accounting system that is being used at CUH takes the total direct cost of the departments, then allocates the indirect costs and distributes it among the departments evenly regardless of the actual resources being used in those departments, and without considering that there may be some patients in these divisions that may require more resources than others, this method does not seem to recognize the different activities,

This includes what services are produced and the ways services are produced in the healthcare system. The healthcare system is considered efficient if there is a high number of satisfied patients. This is possible due to shorter waiting times and faster diagnosis and treatment. Therefore an efficiency advantage for the healthcare system due to gatekeeping is the reduction of both cost and unnecessary patients that are seeing specialist, resulting in longer waiting times are therefore later diagnosis and treatment. This reduction in patients will also ensure specialists are able to see more complex cases with more available time. Another efficient advantage is due to the fact that on average primary level health care are less expensive compared to secondary and tertiary health care such as specialists. This means that due to gatekeeping, patients that don’t require specialist (secondary health care) do not get to see them, reducing in cost majorly. For example, a study that was conducted in 2014 found that since Austria is not subjected to gatekeeping, patients in Austria tend to seek specialist 4 times more compared to countries that are subjected to gatekeeping (Laura, 2015). This means that cost is higher due to higher over-utilization of

As the healthcare landscape continues to shift, medical providers and hospitals are continuously being challenged to develop clear and concise visions and redesign care delivery in ways that will usher proper transitions to value-based care. As value-based healthcare continues to take root, more and more hospitals and providers are finding themselves with little option but to join the movement. However, the jump from previously utilized fee-for-service models to value-based healthcare is not an easy one, and many healthcare organizations are finding it difficult to do so. The greatest challenge lies in successfully making the transition from volume to value-based healthcare in ways that are financially stable. Such inherent difficulties faced by those within the healthcare system are what have necessitated strategic

Under direct contracting, providers must go beyond their traditional roles as suppliers of care to owners of integrated financing and delivery systems. This transition can be difficult for employers to compile and manage actuarial and legal mandates. A physician group can be presented as a threat to health plans, as it does business by obtaining an insurance license. This is because the subcontractor is a competitor. Providers must become active managed care partners with employers, instead of being reactive adversaries of managed care organizations on a contractual basis.

Mednax is an independent group practice in the United States specializing in the delivery of neonatal, pediatric subspecialty, and anesthesia services across the country. As one of the largest accountable care organizations of its kind, the company benefits from geographic and economic scale, enabling it to spread out administrative costs across a wide network of practice locations. Its increasing scale gives it strong negotiating leverage with hospitals, especially as the company 's intangible assets the high degree of specialization of its physician workforce are in high demand and difficult to replicate (Wisner, 2016). A network effect appears to be at play, both in the company 's widening practice base and through its own proprietary