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Globalization of Physician Owned Hospitals and Learning through Strategic Alliances

Globalization of Physician Owned Hospitals and Social Entrepreneurship
The concept of innovative capabilities refers to a firm’s ability to develop new products, services and or markets through aligning strategic innovative behaviors and processes. Dynamic capabilities approach consists of key processes such as identified learning, reconfiguration and coordination/integration of processes. Learning is ability to acquire, assimilate, transform and exploit existing knowledge to integrate and generate new knowledge. The ability to articulate knowledge plays a critical role in innovation process. Continual experimenting and learning activities can evolve in response to feedback and stimuli from the external environment. The Patient Protection and Affordable Care Act prohibit future physician investment in hospitals. This new law restricts existing physician owned hospitals from adding beds, procedure rooms, and operating rooms. Physician owned hospitals have a limited ability to grow under the federal law. The health care bill grandfathered any new and existing physician owned hospitals that earn Medicare certification by Aug 1, 2010. The restrictions on physician owned hospital went into effect immediately.
The growth and expansion of physician owned hospitals in United States are in jeopardy. The physician owned hospitals have achieved high scores in quality of care, patient satisfaction and safety as measured by Centers for Medicare and Medicaid Services (CMS), HealthGrades, Consumer Reports and Press Ganey. These quality measures outrank other community hospitals across the country. These hospitals are for profit hospitals and provide easy access to critical health care services, preserve patient choice and protect jobs in the communities. In order to overcome these regulatory hurdles and restrictions, physician owned hospitals should review new strategies of exploiting external sources of innovation. These hospitals should discover innovative ways of forming cross border acquisition or joint venture to expand their services and grow in international health care market. The hospitals should identify the target hospital, perform due diligence inquiry and establish parent target organization. Driven by regulatory pressures, lowered trade barriers and advances in medical technology, physician owned hospitals should expand their services in countries outside United States by joint ventures or through acquisition. These cross border alliances will create potential synergy and likelihood of success is great when the alliance partners have complimentary core competencies, knowledge and human capital. The goal should consist of developing a combined organization providing health care services by trained, skilled and empowered employees in countries where the access to quality of health care is hard to find. This also enables transfer of modern medical technology to the outsourced organization which brings about social entrepreneurship, increasing market share, growth and expansion of services offered by physician owned hospitals. The emergence of a global marketplace creates an energized innovative service processes in the physician owned hospitals that will enable them to compete in the global marketplace. The hospital will face wide variety of personnel in this combined organization with different cultural backgrounds and therefore the company must adapt in innovative ways to renew and review human resource policies and procedures that brings about harmony and synergy between parent and the target organizations. This innovative approach by Physician Owned Hospitals will enable them to improve their market share in health care field, enriches human and social capital of the organization.

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