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Vertical and Horizontal Integration in Health Care Organizations

Many organizations engaged in vertical and horizontal integration in the 1980s and 1990s. At the beginning of the new century the pace of integration slowed. Why have vertical and horizontal integration become less popular for health care organizations?

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Vertical integration involves controlling as many processes or steps in a chain as a possible.
Horizontal integration involves taking over an organization that performs the same or similar services.
In healthcare, many organizations attempted to take over multiple steps of a process, in order to gain a
competitive edge over other companies within the industry. Often both types of integration have been
viewed as a means of increasing revenues and increasing market share. For example, hospitals
integrated medical laboratories, physical/occupational therapy, and home health nursing services into
their organizations. Consider how having multiple revenue streams affects an organization's ability to
perform )
Vertical integration is often viewed as a means of controlling the life cycle of a service. By
changing the process to fit the needs of the organization and its customers, a healthcare organization
can improve service, become more efficient, and control costs. Horizontal integration is viewed ...

Solution Summary

The expert examines vertical and horizontal integration in health are organizations. Why have vertical and horizontal integration become less popular for health care organizations is determined.

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