Upload
kamrul-kams
View
229
Download
4
Embed Size (px)
Citation preview
ASIAN CASE RESEARCH JOURNAL, VOL. 15, ISSUE 1, 123–148 (2011)
�������E\�:RUOG�6FLHQWLÀF�3XEOLVKLQJ�&R�� '2,����������6����������������
ACRJ
This case was prepared by Prof. Jui-fen Rachel Lu of Chang Gung University, Prof. Terence Tsai and Research Associate Shubo Philip Liu of China Europe International Business School as a basis for class discussion rather than to illustrate either effective or ineffective han-dling of an administrative or business situation.
$OO� RI� WKH�ÀJXUHV� LQ� WKLV� FDVH�are disguised. The research work associated with this case was supported by research grants from the China Europe International Business School and National Science Council (NSC96-2416-H-182-001-MY3) in Taiwan. We also acknowledge the support of China Europe International Business School Case Devel-opment Center.
Please send all correspon- dence to Prof. Terence Tsai, China Europe International Business School Case Develop- ment Center and Department of Management, China Europe International Business School, 699 Hongfeng Road, Pudong, Shanghai, P.R. China. E-mail: [email protected]
Building a Hospital Alliance — Taiwan Landseed Medical Alliance
In a popular scene from the classic Chinese historical novel “Romance of the Three Kingdoms”, the Wei Kingdom tries to gobble up its weaker neighbors, the Shu and Wu Kingdoms. Neither of the latter two realms is able to deter the Wei attacks on its own. Facing invasion, they agree to become allies and support each other as a defensive strategy. They go on to defeat the Wei’s fearful army with their allied forces. In contemporary Taiwan, following the strategy of the Shu and Wu emperors, a group of small hospitals has formed an alliance and prospered in a cut-throat environment.
'U�� 9LFWRU� &KDQJ� ZDV� RQH� RI� WKH� IRXQGHUV� DQG� LV� FXUUHQWO\�&KLHI� ([HFXWLYH� 2IÀFHU� �&(2�� RI� WKH� 7DLZDQ� /DQGVHHG�0HGLFDO� $OOLDQFH (TLMA��� %HIRUH� HVWDEOLVKLQJ� TLMA�� KH�ZDV DQ� H[SHULHQFHG� LQWHUQLVW� ZKR� KDG� ZRUNHG� DW� &KDQJ�*XQJ� 0HPRULDO� +RVSLWDO� �&*0+�� DQG� WKH� 1DWLRQDO� 7DLZDQ�8QLYHUVLW\� +RVSLWDO� DV� D� FOLQLFDO� IHOORZ� DQG� WKHQ� DV� DQ�DWWHQGLQJ� SK\VLFLDQ�� ,W� ZDV� D� W\SLFDO� GD\� IRU� 'U�� &KDQJ� DW�/DQGVHHG�+RVSLWDO��ZLWK� D� IXOO� VFKHGXOH��+H�ZDV� UHDGLQJ� WKH�ÀQDQFLDO� VWDWHPHQWV�RI�TLMA�KRVSLWDOV� IRU� WKH�SDVW� IHZ�\HDUV�DQG�PXOOLQJ�WKLQJV�RYHU��3HUIRUPDQFH�DSSHDUHG�WR�EH�ODJJLQJ��HVSHFLDOO\� LQ� WKH� UDWHV� RI� UHWXUQ� �VHH� ([KLELW� ���� 'U�� &KDQJ�DQG� KLV� FROOHDJXHV� KDG� WR� ÀQG� DQ� DSSURDFK� WR� HQKDQFH� WKHLU�UHWXUQ�RQ�WKHLU�FDUHIXOO\�GHYHORSHG�LQYHVWPHQW��
S0218927511001496.indd 123 7/21/2011 4:30:22 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
124 ACRJ
INTRODUCTION TO TAIWAN LANDSEED MEDICAL ALLIANCE
The Taiwan Landseed Medical Alliance (TLMA) includes eight mostly district hospitals. Established in 1993, it initially comprised several private hospitals (see Exhibit 2). Despite Taiwan’s continuously changing healthcare policies and the competitive healthcare market, these small- to medium-scale private hospitals had gradually expanded their networks and formed a stable alliance.
The ÀUVW� eight hospitals in the early stage of TLMA had survived and succeeded LQ�D�ÀHUFHO\�FRPSHWLWLYH�KRVSLWDO�market because of the alliance. The TLMA group, with the common goal of “keeping pace with medical advancement and leading management trends,” was incorporated in 1991 to upgrade hospital management and service quality, improve the medical environment, and promote good hospital practice. It had demonstrated good performance and assumed a leading role in hospital management development in small and mid-sized hospitals, which account for the majority of hospitals in Taiwan.
PREFACE TO TLMA — IN THE EARLY 1980S
Taiwan was a newly industrialized country and seen as one of the four Asian Tigersa. As a result of the booming economy in the 1980s and 1990s (see Exhibit 3), more resources were pumped into the healthcare sector to satisfy the increasing demand for medical care. The government also encouraged private investment. This attracted new entrants to build hospitals while incumbents seized the opportunity to expand and upgrade their facilities. The two TLMA founding member aIn the twentieth century, many countries in East and Southeast Asia, including South Korea, Taiwan, Singapore, Japan, the Philippines, and Thailand, were called newly industrialized countries. Asian Tigers referred to the highly developed economies of Hong Kong, Singapore, South Korea, and Taiwan�� 7KHVH� UHJLRQV�ZHUH� WKH� ÀUVW�newly industrialized countries noted for maintaining exceptionally high growth rates and rapid industrialization between the early 1960s and 1990s. By importing technology and deploying armies of low-paid but often well-educated workers, they were able to undercut competitors’ prices in markets all over the world.
S0218927511001496.indd 124 7/20/2011 3:37:18 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
KRVSLWDOV��$�+RVSLWDO�DQG�%�+RVSLWDO��ZHUH�HVWDEOLVKHG�GXULQJ�WKLV� ERRP�� DQG�ZHUH� LQYHVWHG� LQ� DQG�PDQDJHG� E\� SK\VLFLDQV�ZLWK�OLWWOH�H[SHULHQFH�LQ�KRVSLWDO�PDQDJHPHQW��
7/0$� PHPEHUV� UHPLQLVFHG� DERXW� WKH� VWDUW� RI� WKH�DOOLDQFH�LQ�D�JURXS�LQWHUYLHZ�
0DQ\� SHRSOH� PLJKW� ZRQGHU� ZK\� ZH� VZLWFKHG� IURP�DFDGHPLD� WR� PDQDJHPHQW� …� LW� KDV� VRPHWKLQJ� WR� GR�ZLWK� WKH� HUD�� DQ� HUD� IXOO� RI� RSSRUWXQLWLHV�� DQG� DQ� HUD� IRU�DGYHQWXUHUV�…
'U��&KDQJ�VDLG�
'U�� +XDQJ�� RQH� RI� P\� IULHQGV�� FDPH� WR� PH� DQG� DVNHG� LI�,� ZDV� ZLOOLQJ� WR� KHOS� KLP� WR� WDNH� RYHU� $� +RVSLWDO� DV� DQ�LQYHVWRU�� ,W� ZDV� LQ� ������:LWKRXW� KHVLWDWLRQ�� ,� DFFHSWHG� KLV�LQYLWDWLRQ��
,W� ZDV� KDUG� WR� GHFOLQH� WKH� LQYLWDWLRQ� IURP� D� IULHQG�� LQ�DGGLWLRQ��LW�ZDV�DQ�RSSRUWXQLW\�WR�PDQDJH�D�KRVSLWDO�RI�RXU�RZQ�
,W� ZDV� GLIÀFXOW� LQ� WKH� EHJLQQLQJ�� ZLWK� SUREOHPV� DULVLQJ�LPPHGLDWHO\� IRU� WKH� 7/0$� DGPLQLVWUDWLRQ�� )RU� H[DPSOH�� WKH�GD\� DIWHU� $� +RVSLWDO� ZDV� WDNHQ� RYHU� E\� 'U�� +XDQJ�� KH� KDG�WR� WXUQ� WR� 'U�� &KDQJ� IRU� SHUVRQQHO� VXSSRUW�� 0RUH� WKDQ� KDOI�RI� WKH�KRVSLWDO·V�HPSOR\HHV�KDG�GHFLGHG�WR�UHVLJQ�EHFDXVH� WKH�WDNHRYHU� PHDQW� D� QHZ� PDQDJHPHQW� WHDP�� DQG� WKH\� GLVOLNHG�WKH� QHZ� UXOHV� DQG� ZHUH� GLVVDWLVÀHG� ZLWK� WKH� QHZ� VDODU\�V\VWHP��+DOI�RI� WKH�QXUVHV� LQ� WKH�'LDO\VLV�&HQWHU� OHIW��/XFNLO\��'U��&KDQJ�ZDV�DEOH�WR�ÀQG�QHZ�VWDII�DQG�VDYHG�WKH�GD\��
-XVW� OLNH� 'U�� &KDQJ�� PRVW� RI� WKH� SK\VLFLDQV� GLG� QRW�KDYH� DQ\� SURIHVVLRQDO� H[SHULHQFH� LQ� KRVSLWDO� PDQDJHPHQW��$SSDUHQWO\�� KRZHYHU�� MXVW� EHLQJ� D� SK\VLFLDQ� GLG� QRW� VDWLVI\�WKH� DPELWLRQV� RI� 'U�� &KDQJ� DQG� KLV� FROODERUDWRUV�� DQG� WKH\�ZHUH� SLQQLQJ� D� ORW� RI� KRSH� RQ� WKHLU� FDUHHU� WUDQVLWLRQ� LQ� WKH�SURVSHURXV�KHDOWKFDUH�LQGXVWU\��
7ZR� \HDUV� DIWHU� 'U�� &KDQJ� KDG� HPEDUNHG� RQ� KLV� QHZ�FDUHHU� LQ� KRVSLWDO�PDQDJHPHQW�� KH�ZDV� YRWHG� VXSHULQWHQGHQW�RI� %� +RVSLWDO�� DIWHU� KH� DQG� KLV� IULHQGV� WRRN� LW� RYHU�� +H� TXLW�KLV� SRVLWLRQ� DV� D� SK\VLFLDQ� DW� &*0+� DQG� FRPPLWWHG� KLPVHOI�WR�D�QHZ�VWDUW�
$OWKRXJK� PRVW� QHZO\� HVWDEOLVKHG� KRVSLWDOV� GLG� ZHOO�ÀQDQFLDOO\� LQ� WKHLU� HDUO\�SHULRG�� WKH\�FRXOG�QRW�RYHUWDNH� WKHLU�
S0218927511001496.indd 125 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
FRPSHWLWRUV� LQ� WKH� PDUNHW�� 3ULYDWH� GLVWULFW� KRVSLWDOV� ODFNHG�HFRQRPLHV� RI� VFDOH�� DQG� WKXV� WKHLU� GHYHORSPHQW� ZDV� OLPLWHG��7KH� 7/0$�PHPEHU� KRVSLWDOV� RULJLQDOO\� WHDPHG� XS�ZLWK� RQH�VLPSOH� JRDO�� WR� PDNH� MRLQW� SXUFKDVHV� WR� DFKLHYH� HFRQRPLHV�RI� VFDOH�� 7KH� DOOLDQFH� ZDV� HVWDEOLVKHG� WKDQNV� WR� 'U�� &KDQJ·V�JUHDW� HIIRUWV� DQG� OLDLVRQ� VNLOOV�� %\� ZRUNLQJ� LQ� KRVSLWDOV� IRU�PDQ\� \HDUV�� KH� KDG� GHYHORSHG� DQ� H[WHQVLYH� QHWZRUN� RI� SHHU�SK\VLFLDQV� IURP� GLIIHUHQW� KRVSLWDOV�� +H� UHDFKHG� RXW� WR� KLV�SHHUV� DQG� IRUPHU� FROOHDJXHV� DQG� SHUVXDGHG� WKHP� WR� MRLQ� WKH�DOOLDQFH�� %HIRUH� 'U�� &KDQJ� MRLQHG� %� +RVSLWDO� VHYHUDO� RI� KLV�IULHQGV� KDG� LQYLWHG� KLP� WR� EH� WKH� VXSHULQWHQGHQW� RI� WKHLU�KRVSLWDOV��'U��&KDQJ�VDLG��
,� WKRXJKW�DERXW� WKHLU� LQYLWDWLRQV�DQG�WKH� LGHD�RI�DQ�DOOLDQFH�FDPH� LQWR� P\�PLQG�� ,� EHJDQ� WR� ORRN� DURXQG� WR� ÀQG� RWKHU�VPDOOHU�KRVSLWDOV�WKDW�ZHUH�WKH�PRVW� ORJLFDO�SDUWQHUV�WR� MRLQ�XV�� :H� KDG� EHHQ� FROOHDJXHV� DQG� IULHQGV� IRU� TXLWH� D� ZKLOH�DQG�NQRZQ�HDFK�RWKHU�ZHOO�� ,W�ZRXOG�QRW�EH�GLIÀFXOW� IRU�XV�WR�FRRSHUDWH�IXUWKHU��
A NEW ENVIRONMENT — IN THE 1990S
7DLZDQ·V� 1DWLRQDO� +HDOWK� ,QVXUDQFH� �1+,�� V\VWHP� �VHH�([KLELW� ��� ZDV� LPSOHPHQWHG� LQ� ������ PHUJLQJ� WKUHH� PDMRU�VRFLDO� LQVXUDQFH� SURJUDPV, QDPHO\� *RYHUQPHQW� (PSOR\HH�,QVXUDQFH�� /DERU� ,QVXUDQFH�� DQG� )DUPHU� ,QVXUDQFH� �VHH�([KLELW� ���� DQG� H[SDQGLQJ� LQVXUDQFH� FRYHUDJH� WR� LQFOXGH� WKH�XQLQVXUHG, ZKR� DFFRXQWHG� IRU� QHDUO\� ���� RI� WKH� SRSXODWLRQ. 7DLZDQ·V� 1+,� SURJUDP� RIIHUHG� HYHU\� FLWL]HQ� QHDUO\� HTXDO�DFFHVV� WR� FRPSUHKHQVLYH� KHDOWK� VHUYLFHV� DQG� SURYLGHG� DOO�FLWL]HQV� ZLWK� ÀQDQFLDO� ULVN� SURWHFWLRQ� IURP� ODUJH� PHGLFDO�H[SHQVHV�� $W� WKH� VDPH� WLPH�� LW� DOORZHG� SDWLHQWV� WR� IUHHO\�FKRRVH� WKHLU� SURYLGHUV�� DQG� KRVSLWDOV� DQG� SK\VLFLDQV� WR�IUHHO\� FKRRVH� WKHLU� SUDFWLFH� PRGH� DQG� EH� SDLG� PDLQO\� RQ�D� IHH�IRU�VHUYLFH� EDVLV�� 7KH� SURJUDP� HQMR\HG� DQ� XQXVXDOly KLJK� VDWLVIDFWLRQ� UDWH� ������ VLQFH� LWV� LQFHSWLRQ�� DQG� UHFHLYHG�ZRUOGZLGH� UHFRJQLWLRQ�� 3DXO� .UXJPDQ�� WKH� ZHOO�NQRZQ� HFR�� QRPLFV� SURIHVVRU� IURP� 3ULQFHWRQ� 8QLYHUVLW\� DQG� ���� Nobel 0HPRULDO� 3UL]H� ODXUHDWH� LQ� (FRQRPLFV�� SUDLVHG� WKH� WHQ�\HDU� H[SHULHQFH� RI� WKH� SURJUDP�� ´7KH� RULJLQDO� SXEOLF� LQVXUDQFH�
S0218927511001496.indd 126 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
VFKHPHV�LQFOXGLQJ�JRYHUQPHQW�HPSOR\HHV·�LQVXUDQFH��ODERUHUV·�LQVXUDQFH�� DQG� IDUPHUV·� LQVXUDQFH� RQO\� FRYHUHG� DERXW� ����RI�WKH� WRWDO� SRSXODWLRQ�� +RZHYHU�� WKH� LPSOHPHQWDWLRQ� RI� 1+,�KDV� UHVXOWHG� LQ� XQLYHUVDO� FRYHUDJH�� ZKLOH� LQ� HFRQRPLF� WHUPV��UHDO�PHGLFDO�FRVWV�KDG�RQO\�ULVHQ�VOLJKWO\b�µ
7KH� LQWURGXFWLRQ� RI� WKH� 1+,� VFKHPH� RSHQHG� XS� PRUH�RSSRUWXQLWLHV� IRU� KRVSLWDOV�� ZKLFK� FRXOG� RIIHU� D� EXIIHW� RI�VHUYLFHV� EHFDXVH� RI� WKH� IDVW�JURZLQJ� GHPDQG� DQG� IHH�IRU�VHUYLFH� SD\PHQW� PHWKRG�� 0DQ\� SK\VLFLDQV� VWDUWHG� WR� LQYHVW�LQ� WKH� KHDOWKFDUH� LQGXVWU\�� ,Q� WKH� HDUO\� GD\V� RI� WKH� VFKHPH��QHDUO\� DOO� KRVSLWDOV� ZHUH� DEOH� WR� JHQHUDWH� VXUSOXVHV�� 7KH�IXWXUH� ORRNHG� JRRG�� 'U�� +XDQJ�� WKH� VXSHUintendent� RI� $�+RVSLWDO�VDLG��
$V� RQH� RI� WKRVH� ZKR� MRLQHG� WKH� WUHQG�� ZH� GLG� QRW� HYHQ� GR� ÀQDQFLDO� HYDOXDWLRQ� EHFDXVH� ZH� EHOLHYHG� ZH� ZRXOG� be DEOH�WR�FRQWLQXH�WR�JHQHUDWe�VXUSOXVHV�LQ�WKH�IXWXUH��
:H� GLG� DQ� DSSUR[LPDWH� IRUHFDVW� RI� H[SHQGLWXUH� EHIRUH�ZH�GHFLGHG�ZKHWKHU�RU�QRW� WR� WDNH�RYHU�D�KRVSLWDO��:H�GLG�VR� RQO\� LI� WKH� KRVSLWDO�ZDV� SUHGLFWHG� WR� EUHDN� HYHQ�ZLWKLQ�ÀYH� \HDUV�� 6LPLODUO\�� ZH� VHW� XS� D� QHZ� KRVSLWDO� RQO\� LI� LW�ZDV� SUHGLFWHG� WR� EH� DEOH� WR� JHQHUDWH� D� VXUSOXV� LQ� HLJKW� WR�WHQ�\HDUV��
$FWXDOO\��ZH�GLG� QRW� KDYH�PXFK� H[SHULHQFH� LQ�PDQDJH�PHQW� DW� WKDW� WLPH�� DQG� ZH� HYHQ� PDGH� PLVWDNHV� LQ� RXU�FDOFXODWLRQ� RI� SURÀW�� :H� VXUYLYHG� WKDQNV� WR� WKH� ERRPLQJ�PDUNHW� LQ� WKDW� SHULRG�� $OPRVW� DOO� SOD\HUV� ZHUH� JHQHUDWLQJ�VXUSOXVHV�LQ�WKH�IUHH�IRU�DOO�KHDOWKFDUH�PDUNHW�
+RZHYHU�� WKH� LPSURYHG� DFFHVV� WR� KHDOWKFDUH� TXLFNO\�LQWHQVLÀHG�PDUNHW� FRPSHWLWLRQ�� ,Q�DGGLWLRQ��QRW� ORQJ�DIWHU� WKH�LPSOHPHQWDWLRQ�RI�WKH�1+,�VFKHPH��KHDOWKFDUH�FRVWV�VWDUWHG�WR�RXWSDFH� SUHPLXP� LQFRPH� LQ� ����� DQG� WKH� JRYHUQPHQW� IDFHG�PRXQWLQJ� SUHVVXUH� GXH� WR� HFRQRPLF� FKDQJH� DQG� ÀQDQFLDO�FRQGLWLRQV� �VHH� ([KLELW� ���� 7KH� VFKHPH� FXPXODWLYHO\� LQFXUUHG�ODUJH�GHÀFLWVc.
bKWWS���ZZZ�� 1KL�JRY�WZ�(QJOLVK�ZHEGDWD�DVS"PHQX ��PHQXBLG ���ZHEGDWHBLG �����,V3ULQW �c7��0��&KHQJ�� ������ 7DLZDQ·V� QHZ�1DWLRQDO�+HDOWK� ,QVXUDQFH� SURJUDP��*HQHVLV� DQG�H[SHULHQFHV�VR�IDU��Health Affairs����������–���
S0218927511001496.indd 127 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
ENVIRONMENTAL CHANGE — AFTER 1995
$� JUHDW� QXPEHU� RI� SK\VLFLDQV� IURP� SXEOLF� KRVSLWDOV� VDZ�WKH� KXJH� SRWHQWLDO� RI� WKH� KHDOWKFDUH� PDUNHW� LQ� 7DLZDQ� DQG�SOXQJHG� LQWR� WKH� EXVLQHVV� DUHQD�� EXW� IHZ� RI� WKHP� FRQVLGHUHG�DOOLDQFHV�
)URP� WKH� ODWH� ����V�� WKH� QXPEHU� RI� SULYDWH� KRVSLWDOV�VWHDGLO\� GHFOLQHG�� EXW� WKH� VSHHG� RI� WKDW� GHFOLQH� DFFHOHUDWHG�DIWHU� WKH� LQWURGXFWLRQ� RI� 1DWLRQDO� +HDOWK� ,QVXUDQFH� �1+,��SURJUDP� LQ� ����� �([KLELW� ���� 7KH� LPSOHPHQWDWLRQ� RI� 1+,��ZKLFK� VLJQLÀFDQWO\� UHGXFHG� WKH� PRQHWDU\� FRVW� ERUQH� E\� WKH�LQVXUHG��LQWHQVLÀHG�FRPSHWLWLRQ�LQ�WKH�KRVSLWDO�PDUNHW��3HRSOH�ZKR� RSWHG� IRU� VWDWH�RI�WKH�DUW� PHGLFDO� WHFKQRORJ\� FURZGHG�LQWR� WHUWLDU\� PHGLFDO� LQVWLWXWLRQV�� HYHQ� IRU� PLQRU� LOOQHVVHV��2WKHUV�SUHIHUUHG�JHQHUDO�SUDFWLWLRQHUV� LQ�QHLJKERUKRRG�FOLQLFV� IRU� WKH� VDNH� RI� FRQYHQLHQFH� DQG� HDV\� DFFHVV�� +HQFH�� WKH�GHPDQG� IRU� FDUH� SURYLGHG� DW� WKH� WZR� H[WUHPHV� RI� WKH� VSHF�WUXP� �PHGLFDO� FHQWHUV� YHUVXV� FOLQLFV�� FRQVLVWHQWO\� LQFUHDVHG��$W� WKH� VDPH� WLPH�� WKH� SXEOLF� WUDQVSRUWDWLRQ� V\VWHP� PDGH�WUDYHOLQJ� WR� PHGLFDO� FHQWHUV� LQ� WKH� FLW\� HDVLHU�� DQG� WKH�GHPDQG� IRU� VHUYLFHV� DW� VPDOO� ORFDO� KRVSLWDOV� ZLWKRXW� EUDQG�UHFRJQLWLRQ�EHJDQ�WR�VKULQN�UDSLGO\��VHH�([KLELW�����
$� IXUWKHU� HQYLURQPHQWDO� FKDQJH� RFFXUUHG� ZKHQ� WKH�%XUHDX� RI� 1DWLRQDO� +HDOWK� ,QVXUDQFH� �%1+,�� GHFLGHG� WR�IRFXV� RQ� FRVW� FRQWDLQPHQW� DQG� LPSOHPHQWHG� YDULRXV� UHIRUPV��6LQFH� WKH� LPSOHPHQWDWLRQ� RI� 1+,� DSSUR[LPDWHO\� ���d RI�KRVSLWDOV� KDG� EHHQ� FRQWUDFWHG� XQGHU WKH� NHI� SURJUDP�� 7KH�LQVXUHG� FRXOG� FKRRVH� ZKLFK� KRVSLWDO� WR� DWWHQG�� ZKLFK� OHG�WR� FRPSHWLWLRQ� DPRQJ� KRVSLWDOV�� :LWK� WKH� UHIRUP�� D� *OREDO�%XGJHW� �*%�� V\VWHP� LPSRVHG� DQ� RYHUDOO� VSHQGLQJ� FDS� WKDW ZDV SURVSHFWLYHO\� VHW� DQG� DJUHHG� XSRQ� WKURXJK� QHJRWLDWLRQV�EHWZHHQ� FRQVXPHU�� SURYLGHU,� DQG� LQVXUHU� UHSUHVHQWDWLYHV�LQ� WKH� SUHYLRXV� \HDU�� ,I� WKH� VHUYLFH� YROXPH� JUHZ� IDVWHU� WKDQ�H[SHFWHG�� WKHQ� WKH� XQLW� SULFH� Iell� DFFRUGLQJO\�� )ROORZLQJ�LPSOHPHQWDWLRQ� RI� WKH� V\VWHP�� KRVSLWDO� FRVW� OHYHOV� UHPDLQHG�KLJK� EXW� UHLPEXUVHPHQW� UDWHV� GURSSHG�� ZKLFK� PDGH� WKH�VLWXDWLRQ� RI� SULYDWH� KRVSLWDOV� GLIÀFXOW�� $� JUHDW� QXPEHU� RI� d6WDWLVWLFV� RI� *HQHUDO� +HDOWK�� ����� DQG� ������ 'HSDUWPHQW� RI� +HDOWK��([HFXWLYH�<XDQ��5�2�&���7DLZDQ��
S0218927511001496.indd 128 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
VPDOO� SULYDWH� KRVSLWDOV� FORVHG� GRZQ� EHFDXVH� RI� GHFOLQLQJ�VHUYLFH� YROXPHV� DQG� XQEDODQFHG� FKHFNERRNV �VHH� ([KLELW� ��. 'U��+XDQJ��RQH�RI�WKH�7/0$�GLUHFWRUV��VDLG�
7KH� 1DWLRQDO� +HDOWK� ,QVXUDQFH� V\VWHP� ZDV� LQ� ÁX[��+RVSLWDO� UHLPEXUVHPHQWV�ZHUH� QR� ORQJer� DV� JHQHURXV�� DQG�WKH� %1+,� VWDUWHG� WR� DFWLYHO\� FRQWDLQ� KHDOWK� H[SHQGLWXUHV��:LWK�WKH�ODXQFKLQJ�RI�WKH�*OREDO�%XGJHW�V\VWHP, oXU�QHZly HVWDEOLVKHG�KRVSLWDO�� OLNH�RWKHU� VPDOOHU�KRVSLWDOV� LQ�7DLZDQ��IDFHG�VLJQLÀFDQWO\�WRXJKHU�controlV��
'U��+XDQJ�VDLG��
$IWHU� WKH� UHIRUP� RI� WKH� 1+,� V\VWHP�� WKH� SHUFHQWDJH� RI�/DQGVHHG·V� SURÀW� IURP� SULYDWH� KHDOWKFDUH� VHUYLFH� URVH�IURP� ���� WR� ����� KRZHYHU�� WKHUH� ZDV� EDUHO\� DQ\� SURÀW�IURP�1+,�SDLG�VHUYLFHV�RQ�VRPH�RFFDVLRQV��DQG� WKH�PRQH\�HDUQHG� IURP� VHOI�SD\� VHUYLFHV� QHHGHG� WR� PDNH� XS� IRU� WKH�LQVXIÀFLHQW�IXQGLQJ�RI�1+,�FRYHUHG�VHUYLFHV�
:LWK� OLPLWHG� UHVRXUFHV� DQG� KLJK� H[SHFWDWLRQV� RI� KHDOWKFDUH�TXDOLW\� IURP� WKH� LQVXUHG�� ZKDW� PHDVXUHV� FRXOG� SULYDWH�KRVSLWDOV�WDNH�WR�PHHW�WKLV�FKDOOHQJH"
THE ALLIANCE IN A CHANGING ENVIRONMENT — FROM THE 1980S TO 21ST CENTURY
TLMA� KHOSHG� PHPEHU� KRVSLWDOV� QDYLJDWH� WKH� XSKHDYDO�UHVXOWLQJ� IURP� WKHVH� SROLF\� FKDQJHV�� &RRSHUDWLRQ� LQ� MRLQW�SXUFKDVLQJ� EHFDPH� D� GHFLVLYH� DGYDQWDJH� DV� FRPSHWLWLRQ�EHFDPH�LQWHQVH�DQG�JRYHUQPHQW�VXSSRUW�GHFOLQHG��
'U��+XDQJ�FRPPHQWHG��
)RUWXQDWHO\�� EHIRUH� 1+,� ZDV� LQ� SODFH�� ZH� KDG� DOUHDG\�IRUPHG� WKH� DOOLDQFH�� EXW� ZH� KDG� GRQH� LW� PDLQO\� IRU� MRLQW�SXUFKDVLQJ� DQG� FRVW� FXWWLQJ�� $W� WKDW� WLPH�� WKH� RWKHU�PHP�EHUV� RI� WKH� DOOLDQFH� ZHUH� QRW� WKDW� DPELWLRXV� WR� HVWDEOLVK� D�KRVSLWDO� FRQVRUWLXP� DQG� FROODERUDWH� LQ� RWKHU� ZD\V�� :KDW�WKH\� ZDQWHG� ZDV� WR� NHHS� GRZQ� WKH� FRVWV� LQFXUUHG� E\� RXU�DOOLDQFH�
7R� DWWUDFW� SDWLHQWV�� ZH� KDG� WR� DFKLHYH� D� KLJK� FXUH�UDWH�� DQG� WKH� KLJK� UDWH� ZDV� EDVHG� RQ� WKH� PHGLFLQHV� ZH�SXUFKDVHG� DQG� XVHG�� 7KDQNV� WR� WKH� DOOLDQFH�� ZH� FRXOG�
S0218927511001496.indd 129 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
130 ACRJ
EDUJDLQ� IRU� DQG�SXUFKDVH�KLJK�HQG�PHGLFLQHV�RWKHU�GLVWULFW�KRVSLWDOV�FRXOG�QRW�DIIRUG�
2QH�7/0$�PHPEHU�DGGHG�
)RU� PDUNHWLQJ� SXUSRVHV�� WKH� DOOLDQFH� KHOSHG� PHPEHU�KRVSLWDOV� HVWDEOLVK� D� EUDQG� QDPH� DV� D� FDUH� LQVWLWXWLRQ�ZLWK�D� VWURQJ� UHSXWDWLRQ�� $OVR�� RXU� KRVSLWDO� DOOLDQFH� HQMR\HG�HFRQRPLHV�RI� VFDOH� LQ�EXON�SXUFKDVLQJ� �HVSHFLDOO\� IRU�GUXJV�DQG�VXQGULHV��DQG�RQ�MRE�WUDLQLQJ�SURJUDPV�
7KLV� OHYHO� RI� FRRSHUDWLRQ�� KRZHYHU�� ZDV� VWLOO� QRW� VXIÀFLHQW�LQ� WKH� FKDQJLQJ� PDUNHW� HQYLURQPHQW�� :KHQ� 'U�� &KDQJ�EHFDPH� VXSHULQWHQGHQW� RI� %� +RVSLWDO�� KH� GHYRWHG� KLPVHOI� to UHLQIRUFLQJ� DQG� EXLOGLQJ� RQ� FRQQHFWLRQV� ZLWK� RWKHU� TLMA PHPEHU KRVSLWDOV� +H� SHUVXDGHG� WKRVH� LQYROYHG� WKDW� E\�HVWDEOLVKLQJ� D� ODUJHU� KRVSLWDO� V\VWHP� DQG� PDLQWDLQLQJ� D�PDUNHW� VKDUH� IRU� WKH� V\VWHP� DV� D� ZKROH�� D� ELJJHU� SRUWLRQ� RI�WKH� PDUNHW� FRXOG� EH� FDSWXUHG� DQG� 7/0$� PHPEHUV� ZRXOG�KDYH�JUHDWHU�EDUJDLQLQJ�SRZHU�ZLWK�WKH�BNHI�� WKXV�DWWUDFWLQJ�PRUH�SDWLHQWV.
The Growth of TLMA
6KRUWO\� DIWHU� WKH� LQWURGXFWLRQ� RI� WKH� *%� V\VWHP�� LQ� UHVSRQVH�WR� WKH� LQFUHDVHG� FRPSHWLWLRQ�� 'U�� &KDQJ�� DORQJ� ZLWK� KLV�DVVRFLDWHV��EHJDQ�WR�WKLQN�DERXW�IXUWKHU�FROODERUDWLRQ�
7KH� HQYLURQPHQW� ZDV� DOZD\V� FKDQJLQJ� DQG� RXU� SRVLWLRQ�ZDV� QHYHU� VHFXUH�� ,Q� WKH� ÀHUFHO\� FRPSHWLWLYH� 7DLZDQHVH�KHDOWKFDUH� PDUNHW�� ZH� QHHGHG� WR� DOO\� ZLWK� PRUH� KRVSLWDOV�WR�EH� D� FRXQWHUEDODQFLQJ� IRUFH� DJDLQVW�ZHOO�HVWDEOLVKHG�DQG�DPELWLRXV�KRVSLWDOV�
,Q� P\� RSLQLRQ�� KRVSLWDO� PHUJHUV� KDUGO\� HYHU� SURGXFH�WKH� H[SHFWHG� EHQHÀWV�� +HQFH�� ,� LQWHQGHG� WR� GHYHORS� D�KRVSLWDO� DOOLDQFH� WKURXJK� ZKLFK� ZH� FRXOG� KDYH� PRUH�HIIHFWLYH� DQG� ÁH[LEOH� FROODERUDWLRQ�� 7KH� DOOLDQFH� ZRXOG�DOVR� HVWDEOLVK� D� JRRG� UHSXWDWLRQ� DQG� PDLQWDLQ� JRRG�UHODWLRQVKLSV�ZLWK�JRYHUQPHQW�DQG�RWKHU�KRVSLWDOV�
5HDOL]LQJ� WKH� LPSRUWDQFH� RI� FRRSHUDWLRQ� DQG� EDVHG� RQ� LWV�HDUO\� FROODERUDWLRQ� H[SHULHQFH�� TLMA LQYLWHG� PRUH� KRVSLWDOV�WR� MRLQ� LW� DQG� EHJDQ� WR� FROODERUDWH� LQ� PRUH� DUHDV�� LQFOXGLQJ�
S0218927511001496.indd 130 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
+5�PDQDJHPHQW�� DQG� DFDGHPLF�� FOLQLF�� IDFLOLW\�� DQG� UHVRXUFH�VKDULQJ��
7KH� TLMA KRVSLWDOV� ZHUH� ORFDWHG� LQ� GLIIHUHQW� DUHDV�RI� 7DLZDQ�� ZLWKRXW� RYHUODSSLQJ� PDUNHWV� DQG� QRW� LQ� GLUHFW�FRPSHWLWLRQ� ZLWK� HDFK� RWKHU�� ,Q� DGGLWLRQ�� WKH� DOOLDQFH� SUR�YLGHG�PHPEHU�KRVSLWDOV�ZLWK� FRPSOHPHQWDU\� UHVRXUFHV��7KH\�FRXOG� EDFN� XS� HDFK� RWKHU� ZLWK� WKHLU� VSHFLDOWLHV� DQG� REWDLQ�UHVRXUFHV� WKDW� QR� VLQJOH� PHPEHU� KRVSLWDO� FRXOG� KDYH�� $V�VPDOO� FRPPXQLW\� KRVSLWDOV�� WKH\� ZHUH� QRW� DEOH� WR� FRPSHWH�ZLWK� UHJLRQDO� KRVSLWDOV� LQ� WHUPV� RI� IDFLOLWLHV� DQG� YDULRXV�VHUYLFHV�� )RU� H[DPSOH�� D� VLQJOH� FRPPXQLW\� KRVSLWDO� FRXOG�QRW�DIIRUG� D� &7� ���� PDFKLQH� IRU� LQ�GHSWK� KHDOWK� FKHFN� VHUYLFHV��EXW� WKURXJK� TLMA,� PHPEHUV� FRXOG� SXUFKDVH� WKH� HTXLSPHQW�DQG� VKDUH� WKH� FRVW�� 7KH� DOOLDQFH� DOVR� HQDEOHG� PHPEHU�KRVSLWDOV� WR� HVWDEOLVK� D� UHSXWDWLRQ� IRU� RIIHULQJ� JRRG� KHDOWK�FDUH� VHUYLFHV�� ,Q� DGGLWLRQ�� WKH� PHGLFDO� ZDVWH� IURP� DOOLDQFH�KRVSLWDOV�ZDV�FROOHFWHG�DQG�GLVSRVHG�RI�LQ�EDWFK�WUHDWPHQW�
%\� ������ TLMA� LQFOXGHG� HLJKW� KRVSLWDOV� DV� ORQJ�WHUP� PHPEHUV�� WKUHH� RI� ZKLFK� ZHUH� RZQHG� E\� WKHLU� PDQDJHPHQW��'U�� &KDQJ� ZDV� HOHFWHG� &(2 RI� TLMA�� DQG� RXWVLGH� RI� WKH� DOOLDQFH� KH� WRRN� PXOWLSOH� SRVLWLRQV� LQ� PHGLFDO� DQG� JRYHUQ�PHQWDO� RUJDQL]DWLRQV�� )RU� H[DPSOH�� KH� KDV� EHHQ� D cRPPLWWHH�PHPEHU� RI WKH� +RVSLWDO� $FFUHGLWDWLRQ� SURJUDP�� 3UHVLGHQW�RI� WKH� $VVRFLDWLRQ� RI� &KLQHVH� +HDOWKFDUH� 0DQDJHPHQW� DQG�7DLZDQ� 5HJLRQDO� +RVSLWDO� $VVRFLDWLRQ�� DQG� DQ� DXGLWLQJ�SK\VLFLDQ�DW�WKH�%1+,�
7R�PDQDJH� WKH�DOOLDQFH�ZHOO��KH� WUHDWHG�HDFK�KRVSLWDO� LQ�D�IDLU�PDQQHU��
,� WUHDWHG� DOO� 7/0$� PHPEHU� KRVSLWDOV� HTXDOO\�� 5HJDUGLQJ�UHSRUWLQJ� WUDQVSDUHQF\�� WKH� HDUQLQJV� DQG� DFFRXQWV� RI� DOO�DOOLDQFH� KRVSLWDOV�ZHUH� DYDLODEOH� WR� DOO� RI� RXU�PDQDJHPHQW�WHDP�PHPEHUV�
2WKHU� PHDVXUHV� ZHUH� DOVR� QHFHVVDU\� WR� HQVXUH� WKH� FRQWLQXHG�VXFFHVV�RI�WKH�DOOLDQFH��
A Firm Yet Flexible Alliance Structure
0RVW� RI� WKH� ÀUVW� 7/0$� PHPEHU� KRVSLWDOV� GLG� QRW� KDYH�SURSHUW\�ULJKWV�IRU�WKHLU�KRVSLWDO�EXLOGLQJV�nRU�RIÀFHV�EHFDXVH�
S0218927511001496.indd 131 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
132 ACRJ
RI� LQVXIÀFLHQW� IXQGLQJ�� ,W� ZDV� GLIÀFXOW� WR� JHW� FUHGLW� IURP�EDQNV�� DQG� WKH� PRVW� UHOLDEOH� DQG� FRQYHQLHQW� ZD\� WR� UDLVH�PRQH\�ZDV�WKURXJK�SHUVRQDO� ORDQV�WDNHQ�E\�WKH�VKDUHKROGLQJ�GRFWRUV��8QGHUVWDQGDEO\�� WKHQ�� HDFK�KRVSLWDO�ZDQWHG� WR� UHWDLQ�RZQ�LGHQWLW\�
8QOLNH� LQ� RWKHU� PHUJHU� DQG� DFTXLVLWLRQ� FDVHV�� 7/0$�PHPEHU� KRVSLWDOV� GLG� QRW� QHHG� WR� DGRSW� D� QHZ� FXOWXUH� RU�PDQDJHPHQW� VW\OH� WR� ZRUN� WRJHWKHU�� 5DWKHU�� HDFK� KRVSLWDO�PDLQWDLQHG� LWV� LQGHSHQGHQFH� LQ� ERWK� PDQDJHPHQW� DQG�ÀQDQFH�� +RZHYHU�� WKH\� GLG� KDYH� VRPHWKLQJ� LQ� FRPPRQ�� D� FRUSRUDWH� LGHQWLW\� V\VWHP� �&,6��� $OO� PHPEHU� KRVSLWDOV� ERUH�WKH� VDPH� ORJR� DQG� VORJDQ�� DQG� VWDII�PHPEHUV�ZRUH� WKH� VDPH� XQLIRUPV�� TLMA� KRVSLWDOV� DOVR� FR�SXEOLVKHG� D� KRVSLWDO� PDQ��DJHPHQW� SHULRGLFDO�� Landseed Hospital Management Newsletter. TLMA� DWWDFKHG� JUHDW� LPSRUWDQFH� WR� WKH� UROH� RI� LWV� &,6�� 'U��&KDQJ�VDLG�
:H� QHHGHG� WR� KDYH� VRPHWKLQJ� LQ� FRPPRQ�� VXFK� DV� D�VKDUHG�QDPH�DQG� ORJR��:H�VSHQW�QHDUO\�ÀYH�\HDUV�EXLOGLQJ�RXU� DOOLDQFH�� 'XULQJ� WKLV� SURFHVV�� VRPH� GUDJJHG� WKHLU� IHHW�EHFDXVH� WKH\� FRXOG� QRW� DFFHSW� P\� PDQDJHPHQW� LGHDV��ZKLOH� FRPSHWLWLRQ� UHVXOWHG� LQ� RWKHUV� FORVLQJ� GRZQ�� 7KRVH�ZKR�ZLWKVWRRG� WKH�GLIÀFXOWLHV�ZHUH�ZLOOLQJ� WR�ZDON� IXUWKHU�ZLWK� PH� …� 7KH� &KLQHVH� VD\LQJ� ´2QH� QHYHU� KLGHV� RQH·V�QDPH� QR�PDWWHU�ZKDWµ� VKRZV� WKH� SULGH� RQH� WDNHV� LQ� RQH·V�QDPH�DQG�RULJLQ�� ,�ZDV�ZLOOLQJ�WR� OHW�KRVSLWDOV�FKDQJH�WKHLU�QDPHV� WR� EHDU� D� ´VKLQµ� WR� VLJQDO� /DQGVHHG� PHPEHUVKLS��7KLV� ZDV� DOVR� D� ZD\� WR� GHPRQVWUDWH� RXU� GHWHUPLQDWLRQ� WR�EH� DOOLHG�� 6HYHUDO� SRWHQWLDO� PHPEHUV� ZDONHG� RXW� EHFDXVH�WKH\�ZRXOG�QRW�FKDQJH�WKHLU�KRVSLWDO�QDPHV��
TLMA� DOVR� LPSOHPHQWHG� D� QXPEHU� RI� PHDVXUHV� WR� HVWDEOLVK�D� XQLÀHG� LGHQWLW\�� 7KHUH�ZHUH� WKUHH� LPSRUWDQW� DQQXDO� HYHQWV�WR� EROVWHU� WKH� VHQVH� RI� EHLQJ� SDUW� RI� D� WHDP�� D� VSRUWV� GD\��D� FXOWXUDO� IHVWLYDO�� DQG� D� \HDU�HQG� SDUW\�� +RVSLWDO� VXSHU� LQWHQGHQWV� PHW� HYHU\� WKUHH� PRQWKV� WR� UHSRUW� RQ� WKHLU�KRVSLWDOV� WR� 'U�� &KDQJ� DV� &(2� 'XULQJ� WKH� PHHWLQJV�� WKH� VXSHULQWHQGHQWV� JRW� WR� NQRZ� HDFK� RWKHU� DQG� VKDUHG� LQIRU�PDWLRQ�RQ�SROLF\�FKDQJHV�DQG�PDUNHW�WUHQGV��DQG�ZRUNHG�RXW�FRPPRQ�VWUDWHJLF�JRDOV��$Q�DQQXDO�UHWUHDW�ZDV�DOVR�RUJDQL]HG�IRU�KRVSLWDO� VXSHULQWHQGHQWV� DQG�PDQDJHUV��ZLWK� OHFWXUHV� DQG�ZRUNVKRSV�LQ�KRVSLWDO�PDQDJHPHQW�KHOG�
S0218927511001496.indd 132 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
,Q� ������ TLMA� HVWDEOLVKHG� /DQGVHHG� +RVSLWDO� DV� LWV�ÁDJVKLS� KRVSLWDO� LQ� D� WRZQ� DERXW� KDOI� DQ� KRXU·V� GULYH� IURP�7DR\XDQ� ,QWHUQDWLRQDO� $LUSRUW�� 'U�� &KDQJ� ZDV� YRWHG� E\�KLV� FROOHDJXHV� WR� EH� WKH� VXSHULQWHQGHQW� RI� WKH� QHZ� KRVSLWDO��+H� SODQQHG� WR� PDNH� LW� D� UHSXWDEOH� UHJLRQDO� KRVSLWDO�� DQG�WRRN� FKDUJH� RI� DOO� RI� WKH� FRQVWUXFWLRQ� GHWDLOV�� 'U�� &KDQJ·V�FROOHDJXHV�FRPPHQWHG��
+H� MRLQHG� LQ� WKH� DUFKLWHFWXUDO� GHVLJQ� DQG� HYHQ� SOD\HG� WKH�UROH� RI� SURMHFW� VXSHUYLVRU� DQG� FDPH� RQ� VLWH� HYHU\� GD\��VSHQGLQJ� D� JUHDW� GHDO� RI� WLPH� WR� RYHUVHH� WKH� SURJUHVV� RI�FRQVWUXFWLRQ��
+H� LV� D� YHU\� HQHUJHWLF� SHUVRQ�� IXOO� RI� SDVVLRQ� DQG�LQWHUHVWLQJ� LGHDV�� /DQGVHHG� +RVSLWDO� ZDV� KLV� LGHD�� +H�ZRXOG�VRPHWLPHV�FRQWLQXH�ZRUNLQJ�IRU�PRUH�WKDQ����KRXUV�D�GD\�oQ�WKH�FRQVWUXFWLRQ�VLWH�…�+LV�ZRUNLQJ�VW\OH�WR�VRPH�H[WHQW�KDV�PDGH�PDQ\�RI�RXU�SODQV�FRPH�WUXH��
+H� LV� D�ZRUNKRUVH�� $IWHU� WKHVH� \HDUV�ZRUNLQJ� WRJHWKHU��ZKDW� ZH� KDYH� VHHQ� LV� WKDW� &KDQJ� ZLOO� DOZD\V� VHW� KLV�VKRXOGHU� WR� WKH� ZKHHO�� +LV� KLJK� GHYRWLRQ� WR� ZRUN� KDV�HQDEOHG�XV�DOO�WR�WUXVW�KLP�DQG�IHHO�WKDW�KH�LV�UHOLDEOH��
(DFK�TLMA PHPEHU�KRVSLWDO�FRQWULEXWHG�WR�WKH�HVWDEOLVKPHQW�DQG� GHYHORSPHQW� RI� WKLV� JHQHUDO� KRVSLWDO� DQG� EDFNHG� LW�XS� ZLWK� DGYDQFHG� PHGLFDO� WHFKQRORJ\� DQG� HTXLSPHQW� �VHH�([KLELW� ���� 6XSHULQWHQGHQWV� DQG� SK\VLFLDQV� IURP� TLMA KRVSLWDOV� UDLVHG� PRQH\� E\� DSSO\LQJ� IRU� SHUVRQDO� ORDQV�� DV�WKH\� IHOW� FRQÀGHQW� LQ� LQYHVWLQJ� WKHLU�RZQ�PRQH\� LQ�/DQGVHHG�+RVSLWDO� DQG� KDG� JUHDW� KRSHV� IRU� LWV� VXFFHVV� XQGHU� 'U��&KDQJ·V�OHDGHUVKLS�
'U�� &KDQJ� FRQVLVWHQWO\� HPSKDVL]HG� LPSURYLQJ� VHUYLFH�TXDOLW\�DQG�KRVSLWDO�PDQDJHPHQW��/DQGVHHG�+RVSLWDO�ZDV� WKH�ÀUVW� PHGLFDO� LQVWLWXWLRQ� LQ� $VLD� WR� EHFRPH� UHJLVWHUHG� WR� WKH�,62� ����� TXDOLW\� PDQDJHPHQW� DQG� ,62� ������ HQYLURQPHQWDO�PDQDJHPHQW� VWDQGDUGV�� $OO� RWKHU� TLMA PHPEHU� KRVSLWDOV FRXOG� EX\� LPSRUWHG� KLJK�HQG� PHGLFLQHV� DW� D� SULFH� PXFK�ORZHU� WKDQ� PDUNHW one� EHFDXVH� WKH� WUDQVDFWLRQ� FRVWV� ZHUH�UHGXFHG�WKURXJK�/DQGVHHG·V�FRRSHUDWLYH�SXUFKDVLQJ�SURJUDP��/DQGVHHG�+RVSLWDO�ZDV� DOVR� WKH� WUDLQLQJ� DQG�DFDGHPLF� FHQWHU IRU� TLMA PHPEHU� KRVSLWDOV�� ZLWK� HDFK� VHQGLQJ� LWV� QHZO\�UHFUXLWHG� VWDII� WR� WKH� KRVSLWDO� WR� DWWHQG� DQQXDO� WUDLQLQJ�
S0218927511001496.indd 133 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
SURJUDPV�� 2WKHU� GHYHORSPHQW� SURJUDPV� LQFOXGHG� PLGGOH��DQG�KLJK�OHYHO�PDQDJHU�DQG�RQ�MRE�WUDLQLQJ��
,Q� ������ 'U�� &KDQJ� DQG� KLV� DOOLHV� HVWDEOLVKHG� WKH�/DQGVHHG� 0HGLFDO� $OOLDQFH� $VVRFLDWLRQ�� 7KH� VXSHULQWHQGHQWV�IURP� WKH� HLJKW� PHPEHU� KRVSLWDOV� EHFDPH� ERDUG� PHPEHUV��WDNLQJ� WXUQV� DV� SUHVLGHQW� RI� WKH� DVVRFLDWLRQ�� 'U�� &KDQJ� ZDV�DSSRLQWHG� WKH� DVVRFLDWLRQ·V� VHFUHWDU\�JHQHUDO�� $OO� TLMA WUDLQLQJ� DQG� UHVHDUFK� DFWLYLWLHV� ZHUH� FDUULHG� RXW� WKURXJK� WKH�DVVRFLDWLRQ��
7/0$� PHPEHU� KRVSLWDOV� REWDLQHG� VXSSRUW� IURP� HDFK�RWKHU� WKURXJK� WKH� DOOLDQFH�� 0RVW�� IRU� LQVWDQFH�� KDG� OLPLWHG�KXPDQ�UHVRXUFHV�LQ�WKHLU�PHGLFDO�XQLWV��:KHQ�D�SK\VLFLDQ�OHIW�RU� UHVLJQHG�IURP�D�KRVSLWDO��RQH� IURP�DQRWKHU�TLMA�KRVSLWDO�ZDV� UHORFDWHG� to VXSSRUW� VHUYLFH� GHOLYHU\� WHPSRUDULO\�� 6HQLRU�VWDII� LQ� ERWK� DFDGHPLF� DQG� PDQDJHPHQW� SRVLWLRQV� ZHUH�WKXV� UHFRJQL]HG� E\� DOO� TLMA� PHPEHU� KRVSLWDOV�� ZKLFK� DOVR�SURYLGHG�FDUHHU�ÁH[LELOLW\�DQG�VHFXULW\��DQG�NHSW�WKH�WXUQRYHU�UDWH�ORZ��
'U��+XDQJ�FRPPHQWHG�DW�WKH�WLPH�
$� KRVSLWDO� KDV� RQO\� D� PRGHVW� SODFH� LQ� WKH� PDUNHW�� EXW�ZH� IHHO� VDIH� DQG� FRQÀGHQW� WRJHWKHU� ZLWK� RWKHU� PHPEHUV�EHFDXVH� HDFK� PHPEHU� KDV� LWV� RZQ� VSHFLDOW\� DQG� VWUHQJWK�LQ� RQH�ÀHOG��%\� FRPELQLQJ�RXU� VWUHQJWKV� DQG� H[SHUWLVH��ZH�KDYH�D�VSHFWDFXODU�DOOLDQFH�WKDW�VXSSRUWV�HDFK�PHPEHU��DQG�ZH�DUH�XQEHDWDEOH��
+RZHYHU�� +5� DUUDQJHPHQWV� ZLWKLQ� WKH� TLMA� JURXS� ZHUH�VRPHWLPHV�VWUDLQHG��HVSHFLDOO\�ZKHQ�D�KRVSLWDO�KDG�WR�SURYLGH�SHUVRQQHO� HYHQ� WKRXJK� LW� ZDV� LWVHOI� H[SHULHQFLQJ� D� VWDII�VKRUWDJH��
Leadership and Shared Value in the Alliance
TLMA� ZRUNHG� ZHOO� EHFDXVH� RI� LWV� HIIHFWLYH� FRRSHUDWLRQ�PHFKDQLVPV� DQG� 'U�� &KDQJ·V� KDUG� ZRUN� DQG� FRQVFLHQWLRXV�PDQDJHPHQW�� 7KH� &KLHI� 'LUHFWRU� RI� WKH� 3XEOLF� +HDOWK� 2IÀFH�VSRNH�KLJKO\�RI�'U��&KDQJ�
+H�KDV�JRRG�PDVWHU\�RI� WKH� ODWHVW�SROLFLHV�DQG�XQGHUVWDQGV�ZHOO�WKH�FKDQJLQJ�KHDOWKFDUH�PDUNHW�LQ�7DLZDQ�
S0218927511001496.indd 134 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
One BNHI VWDII�PHPEHU�VDLG�RI�'U��&KDQJ�
+H� FRPHV� WR�PDQ\�PHHWLQJV�KHOG�E\�XV� DQG�RWKHU�PHGLFDO�DVVRFLDWLRQV� VR� KH� XQGHUVWDQGV� ZHOO� 7DLZDQ·V� SROLWLFDO�HQYLURQPHQW� DQG� WKXV� LV� ZLOOLQJ� WR� DFWLYHO\� ZRUN�ZLWK� XV�… +H� LV� JRRG� DW� FRPPXQLFDWLQJ� DQG� FRRUGLQDWLQJ�� :KHQ�KH� ZDV� FKDLU� RI� WKH� +RVSLWDO� &R�PDQDJHPHQW� &RXQFLO�� KH�ZDV� DEOH� WR� QHJRWLDWH� ZLWK� DOO� WKH� VXSHULQWHQGHQWV� RI� WKH�KRVSLWDOV�ZLWKLQ�1RUWKHUQ�'LYLVLRQ�RI�%1+,��
'U��&KDQJ·V�FROOHDJXHV�FRPPHQWHG��
1RERG\�ZDQWV� WR� FRPSHWH�ZLWK�'U��&KDQJ� IRU� WKH�SRVLWLRQ�RI� &(2� RI� TLMA,� EHFDXVH� WKH� ZKROH� DOOLDQFH� V\VWHP� ZDV�HVWDEOLVKHG�E\�KLP��DQG�KH�EXLOW�WKH�EULGJHV�WKURXJK�ZKLFK�ZH�EHJDQ� WR�NQRZ�HDFK�RWKHU� DQG� VWDUWHG� WR� FROODERUDWH … :H� KDYH� REWDLQHG� PRVW� RI� RXU� RXWVLGH� YHQWXUH� FDSLWDO�WKURXJK�KLV�SHUVRQDO�QHWZRUNV�
'U��&KDQJ�KLPVHOI�FRPPHQWHG�
,� KDYH� SOHGJHG� WR� GR� HYHU\WKLQJ� IDLUO\� VLQFH� ,� WRRN�WKH� SRVLWLRQV� DV� &(2� RI� TLMA� DQG� VXSHULQWHQGHQW� RI�/DQGVHHG� +RVSLWDO�� :KHQ� ,� JLYH� P\� ZRUG�� ,� QHYHU� EDFN�RXW�� ,�ZLOO� WU\�P\� EHVW� WR� KRQRU�P\� SURPLVHV�� ,Q� DGGLWLRQ��,� WUHDW� HYHU\RQH� ZLWK� KRQHVW\�� DQG� ,� GR� QRW� ZRUN� IRU�SHUVRQDO� ÀQDQFLDO� JDLQ� �,� QHYHU� WDNH� D� SHUIRUPDQFH�EDVHG ERQXV��� ,� DP�KDSS\� LI�P\� FROOHDJXHV� WUXVW� DQG� VXSSRUW�PH�IXOO\�LQ�UHWXUQ�
'U�� &KDQJ� KDQGOHG� WKH� DOOLDQFH� ZLWK� JUHDW� FDUH� EHFDXVH� KH�NQHZ� WKDW� DOO� RI� WKH� VXSHULQWHQGHQWV� ZHUH� H[SHUWV� LQ� WKHLU�RZQ� ÀHOGV� DQG� WKDW� WKH� KRVSLWDOV� KDG� GLIIHUHQW� FXOWXUHV��)OH[LELOLW\�DQG�VNLOO�ZHUH�UHTXLUHG�LQ�VXSHUYLVLQJ�WKH�KRVSLWDOV��'U��&KDQJ�VDLG��
Any one of the TLMA member hospitals could turn its back on the alliance. They could choose to do businesses by themselves — ZK\� IROORZ� P\� OHDG"� :KDW� LV� PRUH�� DV� FLYLO� RIÀFLDOV�� WKH�VXSHULQWHQGHQWV� KDYH� VHFXUH� SRVLWLRQV�� ,� KDYH� QR� ULJKW� WR� ÀUH�them even if they disobey my commands. Luckily, we work together well because we have worked together before and known each other for a long time. Based on that, I set my sights on building up a solid alliance: I am a determined person, and persuasive enough to guide [alliance members] on many issues.
S0218927511001496.indd 135 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
'U�� &KDQJ� ZDV� FDXWLRXV� LQ� FKRRVLQJ� KLV� SDUWQHUV�� +RQHVW\�ZDV� KLV� ÀUVW� FRQVLGHUDWLRQ�� DV� KH� WKRXJKW� DQ� DOOLDQFH� FRXOG�QRW� DFKLHYH� VXVWDLQDEOH� GHYHORSPHQW� ZLWKRXW� WUXVW� DQG� JRRG�UHODWLRQVKLSV� DPRQJ� LWV�PHPEHUV��+H�ZDV�GLVSRVHG� WR� UHFUXLW�SHRSOH�ZLWK�EDFNJURXQGV�VLPLODU� WR�KLV�RZQ�EHFDXVH� LW�ZRXOG�EH�PXFK�HDVLHU�IRU�WKHP�WR�WUXVW�RQH�DQRWKHU��DQG�WKLV�PXWXDO�WUXVW�ZRXOG�EH�D�FULWLFDO�IDFWRU�LQ�7/0$·V�VXFFHVV��+H�VDLG�
,Q� 7DLZDQ� DQG� PDLQODQG� &KLQD�� GLIIHUHQW� IURP� WKH� 86��KRVSLWDO� PDQDJHUV� DUH� VXSSRVHG� WR� KDYH� D� PHGLFDO�EDFNJURXQG�� 2QO\� GRFWRUV� FDQ� UHDOO\� NQRZ� ZKDW� SDWLHQWV�need.
$PRQJ� SK\VLFLDQV�� ZH� KDYH� D� NLQG� RI� QDWXUDO� WUXVW��6RPHWLPHV� ZH� GR� QRW� HYHQ� QHHG� D� FRQWUDFW�� DV� ZH� FDQ�FROODERUDWH�EDVHG�RQ�RUDO�SURPLVHV��
,W� WDNHV� WLPH� EHIRUH� ,� FDQ� GHOHJDWH� WDVNV� WR� RWKHUV�� EXW�RQFH� WKHLU� HWKLFDOLW\� LV� SURYHG� DQG� ,� FDQ� VHH� WKHLU� DELOLW\��,� DP� DEOH� WR� SODFH� P\� FRQÀGHQFH� LQ� WKHP� DQG� WUXVW� WKHP�RYHUDOO�
'U�� &KDQJ� WKRXJKW� WKDW� GRFWRUV� ZRXOG� FDUH� PRUH� DERXW�RIIHULQJ� SURIHVVLRQDO� KLJK�TXDOLW\� KHDOWKFDUH� VHUYLFHV� WKDQ�EXVLQHVV SHRSOH��ZKR�ZRXOG�WKLQN�RQO\�RI�PRQHWDU\�JDLQ��
2QH� PDMRU� VKDUHKROGHU� GLG� GURS� RXW� RI� WKH� DOOLDQFH�EHFDXVH� KLV� EXVLQHVV� LQWHUHVWV� ZHUH� QRW� DOLJQHG� ZLWK� WKH�FRQFHUQV� RI�'U�� &KDQJ� DQG� KLV� SK\VLFLDQ� FROOHDJXHV��$OOLDQFH�VXSHULQWHQGHQWV� IRXQG� WKDW� WKH� VKDUHKROGHU� LJQRUHG� WKH�TXDOLW\� RI� KHDOWK� FDUH� LQ� FULWLFDO� DUHDV�� ZKLFK� FRQÁLFWHG� ZLWK�/DQGVHHG·V� FRUH� YDOXH� DQG� PDQDJHPHQW� SKLORVRSK\�� 7KH�SK\VLFLDQV�ZRXOG�QRW� WROHUDWH� WKH� ORZerLQJ�RI� WKHLU� VWDQGDUGV�nRU� LJQRUH�PHGLFDO� HWKLFV� WR�PD[LPL]H� SURÀWV� RU� VKDUHKROGHU�YDOXH��
OFFERING BETTER HOSPITAL SERVICES
7/0$�HPSKDVL]HG�KHDOWKFDUH�VHUYLFH�HQKDQFHPHQW�DPRQJ� LWV�DOOLDQFH�KRVSLWDOV��7KH�7/0$�PHPEHUV�VWDWHG��
,Q� SURYLGLQJ� KHDOWKFDUH� VHUYLFH�� ZH� QHHG� WR� RIIHU� FRP�SDVVLRQDWH� DQG� KXPDQH� FDUH� WR� RXU� FXVWRPHUV�� 7R� GR� WKLV��ZH� QHHG� WR� GHYHORS� D� FXOWXUH� RI� ´VLQFHULW\�� JRRGQHVV�� DQG�EHDXW\�µ�
S0218927511001496.indd 136 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
,Q� &� +RVSLWDO�� ´EHLQJ� QLFH� DQG� SROLWHµ� ZDV� LQFRUSRUDWHG�LQWR� WKH� KRVSLWDO� FXOWXUH�� (PSOR\HHV� LQ� IURQWOLQH� VHUYLFH� DQG�DGPLQLVWUDWLYH� SRVLWLRQV� ZHUH� UHTXLUHG� WR� WDNH� FRXUWHV\�OHVVRQV�� ,Q� /DQGVHHG� +RVSLWDO�� SDWLHQWV� FRXOG� UHFHLYH� FDUH�VHUYLFHV�DFFRUGLQJ�WR�WKHLU�VSHFLDO�QHHGV�DQG�FRQGLWLRQV��
FACING FUTURE CHALLENGES
TLMA� VDZ� VWHDG\� JURZWK� LQ� LWV� UHSXWDWLRQ�� 'U�� &KDQJ�FRPPHQWHG��
7KURXJK� WKH� LPSURYHPHQW� RI� PHGLFDO� FDUH� VWDQGDUGV� DQG�VHUYLFH� TXDOLW\�� D� ZHOFRPLQJ� PHGLFDO� HQYLURQPHQW� DV� ZHOO�DV� KLJK�TXDOLW\�� KLJKO\� HIÀFLHQW�� DQG� SURIHVVLRQDO� PHGLFDO�VHUYLFHV�FDQ�EH�HQMR\HG�E\�WKH�SXEOLF�e
+RZHYHU�� GHVSLWH� WKLV� VXFFHVV�� 'U�� &KDQJ� QRWLFHG� WKDW� WKH�UDWHV� RI� UHWXUQ� IRU� TLMA� KRVSLWDOV� KDG� VWDJQDWHG�� $V� WKH�&(2�RI�WKH�DOOLDQFH�DQG�VXSHULQWHQGHQW�RI�/DQGVHHG�+RVSLWDO���KH�ZDV�FDSDEOH�RI�KDQGOLQJ�DQ�LPPHQVH�DPRXQW�RI�ZRUN�HDFK�GD\�� ,Q� DGGLWLRQ�� KH� ZDV� D� IDVW� GHFLVLRQ� PDNHU�—� KH� FRXOG�DOZD\V� PDNH� XS� KLV� PLQG� ZLWKLQ� WKUHH� GD\V� DQG� VWLFN� WR�KLV� GHFLVLRQV�� 'U�� &KDQJ� QRZ� QHHGHG� WR� RUJDQL]H� D� PHHWLQJ�ZLWK� KLV� FROOHDJXHV� WR� ÀJXUH� RXW� D� SODQ� IRU� UHVWUXFWXULQJ�/DQGVHHG�+RVSLWDO� WR�PDNH� LW�PRUH�RSHUDWLRQDOO\�HIÀFLHQW��+H�WKRXJKW�DERXW�WKH�YDULRXV�LVVXHV�WR�EH�GLVFXVVHG�ZLWK�DOOLDQFH�PHPEHUV� LQ� IRUWKFRPLQJ� PHHWLQJV� DQG� WKH� QHHG� WR� ÀQG�DQVZHUV� WR� WKHVH� TXHVWLRQV�� *LYHQ� PRUH� VWULQJHQW� 1DWLRQDO�+HDOWK� ,QVXUDQFH� �NHI)�SD\PHQW�SROLF\��KRZ�FRXOG� WKH�DOOLHG�KRVSLWDOV� VXVWDLQ� WKHLU� SURÀW� PDUJLQV"� 6KRXOG� WKH\� ORRN� IRU�D� QHZ� YHQWXUH� LQ� WKH� &KLQD�PDUNHW� DV� WKH� 7DLZDQHVH�PDUNHW�ZDV�EHFRPLQJ�VDWXUDWHG"
REFERENCES
� ��� /X�� -�� 5�� DQG�+VLHK�� &�� 5�� ������ 7KH�1DWLRQDO�+HDOWK� ,QVXUDQFH�3URJUDP� LQ� 7DLZDQ�� ,Q� +HDOWK� (FRQRPLFV� �&KDSWHU� ����� 7DLSHL��3UR�(G�3XEOLVKLQJ�&RPSDQ\��'DWD�DIWHU�������
eKWWS���ZZZ�ODQGVHHG�FRP�WZ�VLWH�XVK�FW�DVS"[,WHP ����&W1RGH ����
S0218927511001496.indd 137 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
� ��� /X�� -��5�� DQG�+VLDR��:��&�� ������'RHV�XQLYHUVDO� LQVXUDQFH�PDNH�KHDOWK� FDUH� XQDIIRUGDEOH"� /HVVRQV� IURP� 7DLZDQ�� Health Affairs ���������–���
� ��� /X�� -�� 5��� 6KHX�� -�� 7�� DQG� 6KHQ, M. T. ,QFHQWLYH� DQG� FRPSHWLWLRQ�LQ� WKH�KRVSLWDO�PDUNHW�XQGHU�JOREDO�EXGJHWV��3DSHU�SUHVHQWHG�DW�´3URYLGHU� 3D\PHQW� LQ� WKH� $VLD�3DFLÀFµ� &RQIHUHQFH� LQ� %HLMLQJ, �����
� ��� &KHQJ�� 7�� 0�� ������ 7DLZDQ·V� QHZ� 1DWLRQDO� +HDOWK� ,QVXUDQFH�SURJUDP�� *HQHVLV� DQG� H[SHULHQFHV� VR� IDU�� Health Affairs� ���������–���
� ��� 1DWLRQDO� +HDOWK� ,QVXUDQFH� $QQXDO� 6WDWLVWLFDO� 5HSRUWV� ����� DQG�����
� ��� 6WDWLVWLFV� RI� *HQHUDO� +HDOWK�� ����� DQG� ������ 'HSDUWPHQW� RI�+HDOWK��([HFXWLYH�<XDQ��5�2�&���7DLZDQ��
� ��� 6WDWLVWLFV� RI� *HQHUDO� +HDOWK�� ����� DQG� ������ 'HSDUWPHQW� RI�+HDOWK��([HFXWLYH�<XDQ��5��2��&���7DLZDQ��
� ��� KWWS���ZLQ�GJEDV�JRY�WZ�GJEDV���EV��FDOHQGDU�FDOHQGDU�DVS" 6HO2UJ �6KU)LHOG 6KU,WP.H\:UG ㍨▴
� ��� KWWS���ZZZ�ODQGVHHG�FRP�WZ�VLWH�XVK�FW�DVS"[,WHP ���� &W1RGH ����
����� KWWS���ZZZ�1KL�JRY�WZ�(QJOLVK�ZHEGDWD�DVS"PHQX �� PHQXBLG ���ZHEGDWHBLG �����,V3ULQW �
S0218927511001496.indd 138 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
([KLELW��
6KDUHV�RI�TLMA�+RVSLWDOV to /DQGVHHG�+RVSLWDO�DQG�(DFK�2WKHU�+RVSLWDO·V�*URZWK
Name of hospital
Share
1993 Revenue
NTD 10,000/month
1993 Rate of return
1995 Revenue
NTD 10,000/month
1995 Rate
of return
2002 Revenue
NTD 10,000/month
2002 Rate
of return
2005 Revenue
NTD 10,000/month
2005 Rate of return
2008 Revenue
NTD 10,000/month
2008 Rate of return
A Hospital
5% 2200 12% 3200 20% 2600 16% 2400 14% 2000 8%
B Hospital
10% 4600 10% 9200 20% 6400 15% 5600 12% 4600 10%
C Hospital
5% 700 10% 2000 24% 3300 14% 3760 12% 4000 12%
D Hospital
5% – –
(in the year of
2000) 1800
– 3300 8% 5700 20% 4600 12%
E Hospital
5% 720 30% 1300 35% 3120 30% 4600 25% 3600 10%
F Hospital
5% – – 2400 15% 3000 15% 3000 18% 3600 15%
G hospital
1600 12% 2400 20% – – – – – –
Landseed Hospital
12000 12% 30000 8% 36000 9% 34000 5%
0%
5%
10%
15%
20%
25%
30%
35%
40%
1993 1995 2002 2005 2008
Ra
te o
f R
eu
rn
Year
Rate of Return for TLMA
A Hospital
B Hospital
Landseed
C Hospital
D Hospital
E Hospital
F Hospital
G Hospital
S0218927511001496.indd 139 7/20/2011 1:45:46 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
19
Financial Statement of TLMA in 2008
Sales revenue (figures in millions NTD)
$40,776
Operating expenses
Cost of goods sold: $15,886
Selling, general, and administrative expenses: $17,344
Depreciation and amortization: $1,920
Other expenses: $276
Total operating expenses: $34,426
Operating income
Non-operating income: $260
Earnings before interest and taxes (EBIT)
$6,710 Net interest expense/income: $290
Earnings before income taxes
$6,420 Income taxes: $2,054
Net income $4,366
S0218927511001496.indd 140 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
([KLELW��
TLM
A +RVSLWDOV
2
0
Nam
e o
f H
osp
ital
Tak
en
ov
er
by
o
ther
s K
ey t
imes
Dat
e o
f jo
inin
g
the
Lan
dse
ed
Gro
up
B
ed s
ize
Sta
ff n
um
ber
To
tal
nu
mb
er
Ph
ysi
cian
s N
urs
es
Med
ical
tec
hn
icia
ns
Ad
min
istr
ativ
e st
aff
No
te
A
Yes
19
87 s
et u
p
1993
/1/
1 56
70
15
24
16
15
1989
/12
/31
to
ok
ov
er
B
Yes
19
91/
1/1
1993
/1/
1 60
13
7 19
51
39
28
P
art-
tim
e ex
clu
ded
H
Yes
19
94/
7/1
1994
/7/
1
C
lose
d
C
Yes
1992
to
ok
ov
er
1993
/1/
1 72
12
1 10
42
28
41
1993
/3/
2 o
pen
ed
D
20
00/
6/19
20
00/
6/19
11
3 16
4 12
10
0 22
30
E
Yes
1982
set
up
1993
/1/
1 88
98
7
55
16
20
Par
t-ti
me
excl
ud
ed
1992
/1
dec
ided
to
join
L
and
seed
19
93 r
e-o
pen
ed
F
1992
set
up
1994
/3/
1 69
88
7
56
5 20
1993
d
ecid
ed t
o jo
in
Lan
dse
ed
1994
/3/
1 re
-op
ened
S0218927511001496.indd 141 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
([KLELW����C
ontin
ued)
2
0
Nam
e o
f H
osp
ital
Tak
en
ov
er
by
o
ther
s K
ey t
imes
Dat
e o
f jo
inin
g t
he
Lan
dse
ed
Gro
up
B
ed
size
Sta
ff n
um
ber
To
tal
nu
mb
er
Ph
ysi
cian
s N
urs
es
Med
ical
tec
hn
icia
ns
Ad
min
istr
ativ
e st
aff
No
te
G
Yes
1991
to
ok
o
ver
1993
/1/
1
1993
jo
ined
L
and
seed
1998
C
han
ged
n
ame
to
Fen
g-x
in
Pol
ycl
inic
2000
ch
ang
ed
nam
e to
F
eng
-sh
in
Pol
ycl
inic
Lan
dse
ed
19
95/
1/1
1995
/1/
1 65
0 11
01
135
538
259
169
S0218927511001496.indd 142 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
([KLELW��
7DLZDQ·V�*'3�*URZWK
KWWS���ZLQ�GJEDV�JRY�WZ�GJEDV���EV��FDOHQGDU�FDOHQGDU�DVS"6HO2UJ �6KU)LHOG 6KU,WP.H\:UG ㍨▴
S0218927511001496.indd 143 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
([KLELW��
7DLZDQ·V�+HDOWKFDUH�6\VWHP
Introduction to the NHI Program
,Q�������7DLZDQ�VSHQW�������RI�LWV�*'3�RQ�KHDOWK��ZLWK�GLUHFW�SD\PHQW�E\�KRXVHKROGV�DFFRXQWLQJ�IRU�URXJKO\�����RI�QDWLRQDO�KHDOWK�H[SHQGLWXUH��'HSDUWPHQW�RI�+HDOWK���������7DLZDQ�LQWURGXFHG�D� VLQJOH�SD\HU� 1DWLRQDO� +HDOWK� ,QVXUDQFH� �1+,�� SURJUDP� LQ� ����� DIWHU� QHDUO\� D� GHFDGH� RI�SODQQLQJ�� LQFOXGLQJ� D� WZR�\HDU� OHJLVODWLYH� PDUDWKRQ�� 7KH� JRDO� RI� XQLYHUVDO� FRYHUDJH� ZDV�DFKLHYHG�E\� LQWHJUDWLQJ� WKUHH� WKHQ�H[LVWLQJ�VRFLDO� LQVXUDQFH� VFKHPHV��QDPHO\��/DERU� ,QVXUDQFH��*RYHUQPHQW�(PSOR\HH�,QVXUDQFH��DQG�)DUPHU�,QVXUDQFH��ZKLFK�FROOHFWLYHO\�FRYHUHG�����RI�WKH�SRSXODWLRQ��DQG�VXFFHVVIXOO\�H[SDQGLQJ�WKH�FRYHUDJH�WR�WKH�XQLQVXUHG��ZKLFK�PDLQO\�FRPSULVHG�WKH� XQHPSOR\HG�� HOGHUO\�� DQG� \RXQJ�� 7KH� 1+,� SURJUDP� SURYLGHV� D� FRPSUHKHQVLYH� EHQHÀW�SDFNDJH� WKDW� FRYHUV SUHYHQWLYH� DQG� PHGLFDO� VHUYLFHV� �LQSDWLHQW� DQG� RXWSDWLHQW��� SUHVFULSWLRQ�GUXJV�� GHQWDO VHUYLFHV�� &KLQHVH� PHGLFLQH�� DQG� KRPH� QXUVH� YLVLWV�� ÀQDQFHG� PDLQO\� E\� SD\UROO�EDVHG�SUHPLXPV��ZLWK�WKH�JRYHUQPHQW�VXEVLGL]LQJ�WKH�SRRU��YHWHUDQV��IDUPHUV��DQG�ODERUHUV�
7DLZDQ�KDV�D�PDUNHW�RULHQWHG�KHDOWKFDUH�GHOLYHU\�V\VWHP��UHÁHFWLQJ�LWV�IUHH�HQWHUSULVH�HFRQRP\��DV�HYLGHQFHG�E\�WKH�SOXUDOLVWLF�RUJDQL]DWLRQ�RI�KHDOWK�VHUYLFHV��+RVSLWDO�RZQHUVKLS�LV�PL[HG��ZLWK�SXEOLF�KRVSLWDOV�DFFRXQWLQJ�IRU�����RI�DOO�EHGV��'HSDUWPHQW�RI�+HDOWK���������6L[W\�WKUHH�SHUFHQW�RI� DOORSDWKLF� SK\VLFLDQV� DUH� VDODULHG� HPSOR\HHV� RI� KRVSLWDOV�� DQG� WKH� UHVW� DUH� IHH�IRU�VHUYLFH�SULYDWH� SUDFWLWLRQHUV�� &KLQHVH� PHGLFLQH� SUDFWLWLRQHUV�� ZKR� DUH� OLFHQVHG� PHGLFDO� SURIHVVLRQDOV�DOWKRXJK�QRW� DOO� KDYH�XQGHUJRQH� IRUPDO� HGXFDWLRQ��PDLQO\�SUDFWLFH� LQ�SULYDWHO\�RZQHG� FOLQLFV��+RVSLWDOV� KDYH� GHYHORSHG� ODUJH� RXWSDWLHQW� GHSDUWPHQWV� DQG� DIÀOLDWHG� FOLQLFV� IRU� SULPDU\� FDUH�WR�PDLQWDLQ�LQSDWLHQW�YROXPH�DQG�FRPSHWH�ZLWK�SULYDWH�SUDFWLWLRQHUV�ZKR�RSHUDWH�IUHH�VWDQGLQJ�FOLQLFV�ZLWK�EHGV�
'HVSLWH� WKH�1+,�SURJUDP·V� LPSUHVVLYH�DFKLHYHPHQW� LQ� DVVXULQJ�DFFHVV� WR� FDUH� IRU� DQG�SURYLGH�ÀQDQFLDO� ULVN� SURWHFWLRQ� WR� 7DLZDQ·V� ��� PLOOLRQ� FLWL]HQV�� IDVW�JURZLQJ� H[SHQGLWXUHV� WKDW�RXWSDFHG�SUHPLXP� LQFRPH�KDG� EHFRPH� D� EXUQLQJ� LVVXH� E\� ������ 3ROLWLFDO� SUHVVXUH�PHDQW� WKDW�WKH�SUHPLXP�UDWH�KDG�RQO\�EHHQ�LQFUHDVHG�RQFH��IURP�������WR��������VLQFH�WKH�LQDXJXUDWLRQ�RI�WKH� SURJUDP�� 7R� FRSH�ZLWK� ÀQDQFLDO� LQVROYHQF\�� WKH� %1+,� LQWURGXFHG� YDULRXV� UHIRUP� SROLFLHV�DQG�VHW�XS�VHSDUDWH�JOREDO�EXGJHWV� IRU�GHQWDO�VHUYLFHV� LQ�������&KLQHVH�PHGLFLQH� LQ�������RIÀFH�YLVLWV� GHOLYHUHG�E\� FOLQLFV� �SULPDU\� FDUH�� LQ� ������ DQG�PRVW� FRQWURYHUVLDOO\�� KRVSLWDO� RXWSDWLHQW�DQG�LQSDWLHQW�VHUYLFHV�LQ�������ZLWK�IXQGV�SRROHG�IURP�EXGJHWV�IRU�KRVSLWDO�DQG�SULPDU\�FDUH��D�JOREDO�EXGJHW�IRU�UHQDO�GLDO\VLV�ZDV�DOVR�LQVWDWHG��
7KH�1+,�UHVHUYHV�ZHUH�GHSOHWHG� LQ�)HEUXDU\�������DQG�WKH�ÀQDQFLDO�JDS�DV�RI�0DUFK������ZDV�17������ELOOLRQ��86�����PLOOLRQ��
Hospital Global Budget System
7KH�KRVSLWDO�JOREDO�EXGJHW��*%��V\VWHP�LQWURGXFHG�LQ�-XO\������SURYRNHG�YRFLIHURXV�RSSRVLWLRQ�IURP� KRVSLWDOV�� 'HVSLWH� WKH� SUHVVXUH� LPSRVHG� E\� KRVSLWDO� JURXSV�� WKHQ�+HDOWK�0LQLVWHU�0LQJ�/LDQJ�/HH�ZDV�IXOO\�GHWHUPLQHG�WR�LPSOHPHQW�WKH�SURJUDP��+RZHYHU��WR�DOOHYLDWH�WKH�H[SORVLYH�WHQVLRQ�EHWZHHQ� WKH�JRYHUQPHQW�DQG�WKH�KRVSLWDO�VHFWRU��/HH�UHVLJQHG� MXVW�RQH�PRQWK�DIWHU� WKH�SURJUDP�ZDV�SXW�LQWR�SODFH��
S0218927511001496.indd 144 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
7KH� %1+,� KDV� DGRSWHG� DQ� ´H[SHQGLWXUH� FDSµ� UDWKHU� WKDQ� ´H[SHQGLWXUH� WDUJHWµ� DSSURDFK� LQ�DGPLQLVWHULQJ� WKH� *%� V\VWHP� LQ� 7DLZDQ�� 7KH� IRUPHU� LV� RIWHQ� FDOOHG� D� ´KDUG� FDSµ� EHFDXVH� WKH�SUH�VHW� H[SHQGLWXUH� FDS� LV� WKH� PD[LPXP� WKDW� SURYLGHUV� FDQ� JHW� IURP� WKH� LQVXUHU�� ZKHUHDV�XQGHU� WKH� H[SHQGLWXUH� WDUJHW� DSSURDFK� �D� ´VRIW� FDSµ��� SURYLGHUV� JHW� D� GLVFRXQWHG� IHH� ZKHQ�WRWDO� H[SHQGLWXUHV� H[FHHG� WKH� WDUJHW�� 5HSUHVHQWDWLYHV� RI� HPSOR\HUV�� FRQVXPHUV�� SURYLGHUV�� DQG�JRYHUQPHQW�DJHQFLHV�DQG�WZR�H[SHUWV�VFKRODUV�DSSRLQWHG�E\�WKH�+HDOWK�0LQLVWHU��RI�ZKRP�RQH�LV�DSSRLQWHG�DV� WKH�&KDLU��QHJRWLDWH� WKH�DQQXDO�JURZWK�UDWH� IRU� WKH�H[SHQGLWXUH�FDS�ZLWKLQ� WKH�ERXQGDU\�VHW�E\�WKH�JRYHUQPHQW�DW�1+,�0HGLFDO�([SHQGLWXUH�1HJRWLDWLRQ�&RPPLWWHH�PHHWLQJV��7KHQ��WKH�H[SHQGLWXUH�FDS�IRU�WKH�FXUUHQW�\HDU�PXOWLSOLHG�E\�WKH�QHJRWLDWHG�JURZWK�UDWH�EHFRPHV�WKH� H[SHQGLWXUH� FDS� IRU� WKH� IROORZLQJ� \HDU�� 7KH� H[SHQGLWXUH� FDS� LV� IXUWKHU� GLYLGHG� LQWR� VL[�VHSDUDWH�EXGJHW�FDSV�IRU�WKH�VL[�%1+,�UHJLRQV�DIWHU�DGMXVWLQJ�IRU�GHPRJUDSKLF�ULVN�IDFWRUV��EDVHG�RQ�WKH�GHPRJUDSKLF�FKDUDFWHULVWLFV�RI�WKH�UHJLRQDO�LQVXUHG�SRSXODWLRQI��DQG�FURVV�ERUGHU�PHGLFDO�H[SHQGLWXUHV�LQFXUUHG�E\�WKH�UHJLRQDO�LQVXUHG�SRSXODWLRQ�
ReferenceV�
/X��-��5��DQG�:�&��+VLDR� W. C. ������'RHV�XQLYHUVDO� iQVXUDQFH�PDNH�KHDOWK�cDUH�XQDIIRUGDEOH"�/HVVRQV�IURP�7DLZDQ� Health Affairs 22�������–���/X�� -�� 5��� 6KHX�� -�� 7�� DQG� 6KHQ, M. T. ,QFHQWLYH� DQG� FRPSHWLWLRQ� LQ� WKH� KRVSLWDO�PDUNHW� XQGHU�JOREDO�EXGJHWV��3DSHU�SUHVHQWHG�DW�´3URYLGHU�3D\PHQW�LQ�WKH�$VLD�3DFLÀFµ�&RQIHUHQFH�LQ�%HLMLQJ, �����
I7KH� UHJLRQDO� LQVXUHG� SRSXODWLRQ� LV� WKH� QXPEHU� RI� SHUVRQV� UHJLVWHUHG� XQGHU� D� %1+,� UHJLRQDO� RIÀFH� DQG�PD\� QRW� EH�WKH� DFWXDO� UHVLGHQW� SRSXODWLRQ�� 7KH� HPSOR\HHV� RI� ELJ� ÀUPV��ZKRVH� KHDGTXDUWHUV� WHQG� WR� EH� ORFDWHG� LQ� WKH� FDSLWDO� FLW\��7DLSHL��DOO�UHJLVWHU�XQGHU�WKH�%1+,�7DLSHL�UHJLRQDO�RIÀFH��UHJDUGOHVV�RI�ZKHUH�WKH\�ZRUN�DQG�OLYH��
S0218927511001496.indd 145 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
([KLELW��
Data source��'DWD�IRU�����–������ -�5��/X�DQG�&�5��+VLHK��������7KH�1DWLRQDO�+HDOWK�,QVXUDQFH�3URJUDP�LQ�7DLZDQ��In Health economics� �&KDSWHU������7DLSHL��3UR�(G�3XEOLVKLQJ�&RPSDQ\��'DWD�DIWHU�������1DWLRQDO�+HDOWK� ,QVXUDQFH�$QQXDO�6WDWLVWLFDO�5HSRUW��%XUHDX�RI�1DWLRQDO�+HDOWK�,QVXUDQFH�
,QVXUDQFH�&RYHUDJH�([SDQVLRQ�LQ�7DLZDQ��,QVXUHG�3HRSOH�DV�D�3HUFHQWDJH�RI�3RSXODWLRQ�����–����
FRYHUDJHUDWH��
\HDU
S0218927511001496.indd 146 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
%8,/',1*�$�+263,7$/�$//,$1&(� ���
([KLELW��
)LQDQFLDO�6WDWXV�RI�%XUHDX�RI�1DWLRQDO�+HDOWK�,QVXUDQFH������–����,
1000
1500
2000
2500
3000
3500
4000
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Unit: NT$100 million
year
medical benefits premium revenues
Source��%XUHDX�RI�1DWLRQDO�+HDOWK�,QVXUDQFH�$QQXDO�6WDWLVWLFDO�5HSRUW�������DQG������
S0218927511001496.indd 147 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.
���� $&5-
0
100
200
300
400
500
600
700
800
900
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008
No.
of
hosp
ital
s
Public
Foundation-owned
Private
([KLELW��
1R��RI�+RVSLWDOV�E\�2ZQHUVKLS������–����
S0218927511001496.indd 148 7/20/2011 1:45:47 PM
Asi
an C
ase
Res
. J. 2
011.
15:1
23-1
48. D
ownl
oade
d fr
om w
ww
.wor
ldsc
ient
ific.
com
by 1
80.2
11.2
26.1
29 o
n 06
/10/
13. F
or p
erso
nal u
se o
nly.