The Competitive Forces Facing E-Health
Nilmini Wickramasinghe (Stuart Graduate School of Business, USA), Santosh Misra (Cleveland State University, USA), Arnold Jenkins (Johns Hopkins Hospital, USA) and Douglas R. Vogel (City University of Hong Kong, China)
Copyright: © 2009
Superior access, quality and value of healthcare services has become a national priority for healthcare to combat the exponentially increasing costs of healthcare expenditure. E-Health in its many forms and possibilities appears to offer a panacea for facilitating the necessary transformation for healthcare. While a plethora of e-health initiatives keep mushrooming both nationally and globally, there exists to date no unified system to evaluate these respective initiatives and assess their relative strengths and deficiencies in realizing superior access, quality and value of healthcare services. Our research serves to address this void. This is done by focusing on the following three key components: 1) understanding the web of players (regulators, payers, providers, healthcare organizations, suppliers and last but not least patients) and how e-health can modify the interactions between these players as well as create added value healthcare services. 2) understand the competitive forces facing e-health organizations and the role of the Internet in modifying these forces, and 3) from analyzing the web of players combined with the competitive forces for e-health organizations we develop a framework that serves to identify the key forces facing an e-health and suggestions of how such an organization can structure itself to be e-health prepared.
Traditional Competitive Forces
The starting point for understanding the competitive forces facing any e-health initiative lies in understanding the fundamentals of traditional competitive forces that impact all industries and then how the Internet as a disruptive technology has impacted these forces.
The strategy of an organization has two major components (Henderson and Venkatraman, 1993). These are 1) formulation – making decisions regarding the mission, goals and objectives of the organization and 2) implementation – making decisions regarding how the organization can structure itself to realize its goal and carryout specific activites. For today’s healthcare organizations the goals, mission and objectives all focus around access, quality and value and realizing this value proposition for healthcare then becomes the key (Wickramasinghe, N. et al, 2004). Essentially, the goal of strategic management is to find a “fit” between the organization and its environment that maximizes its performance (Hofer, 1975). This then describes the Market-based view of the firm and has been predominantly developed and pushed by the frameworks of Michael Porter. The first of Porter’s famous frameworks is the generic strategies (Porter, 1980).