What has been the impact of horizontal, vertical, and virtual integration on healthcare organizations?
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Horizontal integration is best described as the acquisition of another organization that produces products or services in the same niche as the organization taking it over. An example outside of health care would be if a particular automobile manufacturer merged with another manufacturer that develops cars very similar to its own.
In health care, if this were to happen, essentially the organization grows far larger and gains a greater monopoly over it’s consumer base. Since horizontal integration involves two organizations that offer the same services/products, by integrating, an organization has basically drastically increased its capacity to offer that particular service/product to a consumer base. The impact for health care organizations is usually in the form of greater revenue generation simply by increasing the consumer base. So if a hospital group acquires another hospital, they’ve essentially set up a new location where they can access more patients, the hospitals’ consumers. That said, merging with another organization often comes with expenses and troubleshooting such as streamlining any inefficient or duplicate processes between the two organizations, dealing with employee relations who are nervous about losing their jobs as …
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