HOSPITAL ADAPTATION TO RISK-BEARING - MANAGERIAL IMPLICATIONS OF CHANGES IN PURCHASER-PROVIDER CONTRACTING

A number of countries have adopted contracting reforms in which hospit als are placed at financial risk. This risk has stimulated a number of adaptive strategies to achieve organizational success. This paper pre sents a model of six forms of contracting relationships and reviews th e adaptation strategies observed in three health systems: the USA, Eng land and the Netherlands. These strategies include service diversifica tion, improved management information systems, the employment of marke ting and contract managers, the use of clinical pathways, case managem ent and concurrent/retrospective review of hospital stays, quality man agement and quality assurance programs, pre-admission authorization, d ischarge planning, and physician profiling and participation in manage ment. These adaptive strategies have three implications for managers: increased 'partnering' with purchasers, collaboration with medical sta ff, and assumption of managed care roles. Two groups of institutions a re at risk from the changes in hospital contracting: university teachi ng hospitals and inner-city hospitals serving socially deprived popula tions. The paper ends with implications for the education of hospital managers and research on hospital management and adaption to contracti ng. (C) 1997 Elsevier Science Ireland Ltd.