REVIEWED BY WILLIAM C. SCHOENHARD, FACHE
Alan M. Zuckerman
Health Administration Press, Chicago, 2002, 272 pp., $55 (paperback)
Alan M. Zuckerman has written a very clear, insightful book about various competitive
strategies that health care organizations have deployed with varying success
in recent years. Following an excellent review of the literature on competitive
strategies, both inside and outside health care, Zuckerman devotes a chapter
to each of the main competitive strategy approaches used in health care: "vertical
integration," "horizontal integration," "diversification,"
"niching," "cost leadership," and "differentiation."
Each chapter defines a particular competitive strategy approach and examines
its applicability to health care organizations. Utilizing case studies from
both inside and outside health care, as well as a review of the business and
health care literature, Zuckerman assesses each competitive strategy and its
potential for success.
Although vertical integration and diversification hold big rewards as well
as big risks, Zuckerman says that few health care organizations should pursue
these strategies. Horizontal integration seems to have some promise, but only
for organizations that have achieved indisputable market dominance or huge cost
advantages. Niching has met with some success, especially in the investor-owned
segment of health care, and is likely to grow. Cost leadership, while broadly
successful in the general business community, has been essentially unsuccessful
in health care. However, the author believes it may become more important if
price competition emerges among health care providers. Differentiation has the
longest history in health care, and, according to the author, is "probably
the next major competitive battlefield following integration of care in the
late 1990s."
In each of the chapters describing these competitive strategies, Zuckerman
utilizes a variety of excellent case studies from within and outside health
care. Some of the organizations profiled are AT&T, the Walt Disney Company,
Henry Ford Health System, UniHealth America, Southwest Airlines, Nokia, the
Johns Hopkins Hospital and Health System, and HealthSouth Corporation.
The author ends the book by emphasizing the need to raise competitive strategies
to a higher level through industry analysis, competitive analysis, and competitive
intelligence. The book concludes with 10 lessons for competitive strategy, beginning
with the first lesson, which the author calls "Commit to Competing."
Zuckerman states in his introduction that he hopes to make an important contribution
to the competitive capabilities of health care executives and the organizations
they manage. This book accomplishes that purpose through an excellent literature
review and analysis of the strategies employed to date in health care, both
those that have worked and those that have not, along with implications for
what may be effective for the future.
William C. Schoenhard, FACHE
Executive Vice President/Chief Operating Officer
SSM Health Care
St. Louis
Copyright © 2004 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.