Health Care Management - Research Paper Example

Like any business or an industry driven by healthy competition, the healthcare industry undergoes several stages as it goes through the normal business cycles, such as mergers and acquisitions for consolidation. The idea is that being bigger brings about certain advantages such as economies of scale. Continuing consolidation can also result in concentration that brings about oligopolies. Discussion Health care organizations are no different from any other business entities, so they also enter into strategic alliances to further their chances of success by reducing business risks.

This industry has been in a state of flux due to the recent developments which impacted it; the fairly-recent passage of the healthcare reforms signed by President Barack Obama and called the Patient Protection and Affordable Care (PPAC) Act, or simply as Obamacare, has altered the landscape of the healthcare industry. It has expanded the number of potential clients who are now mandated to get healthcare insurance by approximately 30 million (Pear, 2012, p. 1). Competitive pressures to lower insurance costs will propel new re-alignments and mergers.

Part of the law requires that state health insurance exchanges be put up in every state; it compels insurance firms to offer competitive prices for coverage but hospitals, to remain viable, must still comply with the EMTALA Law despite this provision (Fosmire, 2009, p. 1). This will probably shortcut some of the stages that strategic alliances normally go through. The usual route is the so-called industry life-cycle model that pertains to the various stages of growth, namely emergence, transition, maturity and critical crossroads.

However, there are new changes in the industry operating environment, termed as environmental jolts, which may compel alliances to bypass some stages; an ability to do so depends on leaders who can pull off, by sheer intelligence and pure charisma, a short-circuit route without putting their organizations at risk. The four primary drivers of business success are strategy, execution, culture and, lastly, structure. These four can be supplemented by any of these four secondary management practices, namely talent, leadership, innovation and mergers (or partnerships).

It is clear from the above that it is important to have the right leader at the top, to make this a so-called 4+2 formula work to the best outcome (Nohria, Joyce, & Roberson, 2003, p. 42); a dynamic, inspirational and transformational leader can bring this about by carefully choosing the right healthcare partners, best fit in terms of objectives and cultures. The said leader must focus exclusively on working out the solutions to common problems and overcome resistance to change (Kan & Parry, 2004, p. 468). In this regard, not every strategic alliance has to go through all four phases; the current situation may compel some leaders to go from emergence to maturity without passing through the transition stage to hasten consolidation and capture market shares quickly.

However, success depends on the type of leader and the leadership style. If there is a clear or overriding congruence of goals, good leaders can overcome resistance and achieve good results. Alliances are admittedly very risky undertakings, as evidenced by a high failure rate. It is incumbent on leaders to carefully articulate their