Master Thesis, Supply Chain Management
Pressures can either burst a pipe or make a
diamond: The multifaceted effect of preventative
institutional pressures on healthcare purchasing
organizations
Student name: Talina Grieg Dahling
Student number: 2011360
Date: 28.01.2019
Supervisor: Professor C.T.B Ahaus
Abstract
Using institutional theory as a framework, this research paper assessed the institutional pressures and institutional logics followed by healthcare purchasing organizations. A multiple case study was made between healthcare purchasing organizations in the countries of Norway, The Netherlands, Spain and Germany. A within-case analysis and a cross-case analysis was carried out to investigate differences between monopolistic and competitive healthcare systems. 19 interviews from professionals within different organizations resulted in findings regarding which institutional pressures the organization was experiencing, which logics the professionals follow, the logic multiplicity within the organization and the consequent conflicts within the organization. Results show a dynamic picture of how the conflicts manifests themselves, and its indication for a response to preventative pressures. Furthermore, it indicates that monopolistic healthcare purchasing organizations encounter more conflict than competitive healthcare purchasing organizations.
Table of Content
1. Introduction 4
2. Theoretical Background 7
2.1 Institutional theory and institutional pressures 7 2.2 Institutional pressures and the healthcare industry 8
2.3 Preventative institutional pressures 9
2.4 Institutional logics and institutional pressures 9
2.5 Conceptual framework 10 3. Methodology 12 3.1 Research design 12 3.2 Case selection 13 3.3 Context 13 3.4 Data collection 15 4. Findings 17 4.1 Within-case 17 4.2 Cross-case 25 5. Discussion 29
5.1 Prevention logic identification 29
5.2 Institutional pressures and logics 30
1. INTRODUCTION
Access to adequate medical care is considered a human right (Universal Declaration of Human Rights, 1948) and furthermore there is an increasing focus on the quality of provided healthcare and well-being of the population (World Health Organization, 2018). However, in a world with a high increase in demand for healthcare with a simultaneous decrease in a working population paying for healthcare, cost containment strategies are inevitable. Current healthcare spending is not sustainable in the long-run as curative medical care and long-term care are on the rise. These two together constitute a large portion of a country’s healthcare spending (i.e., for Norway it constitutes 80%) and it is alarming that these are predicted to rise rapidly. However, many of these care options are for conditions that could have been prevented in the first place (i.e., obesity related diseases etc.).
Thus, there is a movement towards preventative healthcare, as advocates for preventative healthcare stress that it can provide both economic sustainability and social sustainability. Caley and Sidhu (2011) show statistically how preventative care can both increase the absence of illness in general, but also how it can cause a longer life expectancy with lower morbidity (i.e., more healthy years while living) when the right preventative healthcare choices are made. However, the movement toward preventative healthcare is relatively slow. From an institutional theory and institutional logics perspective, this might be happening due to conflicts that arise within organizations as they encounter new institutional pressures. The purchasing of healthcare is especially subject to this as there is a becoming pressure for preventative healthcare while a simultaneous pressure for cost-containment.
In most cases, purchasers of healthcare provide the direction for the final outcome of what healthcare is provided, and it is essential to understand what they are doing (i.e., moving towards preventative care) and why they are doing it (i.e., institutional pressures) in order to reach sustainable goals for demanded healthcare. The way purchasers respond to the preventative healthcare pressures with the use of short-term goals or long-term goals are essential for the future provision of healthcare services.
within the organization. This will be assessed using institutional theory as a framework, in terms of investigating how these pressures affect the institutional logics and which conflicts arise as a consequence of this. Lastly, the research will investigate how these pressures and conflicts might vary between HPOs that are monopolistic or competitive. This might also highlight interesting differences between different types of HPOs.
Institutional theory has many faces and definitions, but in light of this research most importantly institutional theory emphasizes that the goals and decision making of organizations are affected by the institutional features in their environment (Scott, 1987). Healthcare as an institution has been changing their demands from more curative to preventative care in the recent years (Burnett et. al, 2016) which is largely stemming from external pressures from large advocates such as the World Health Organization. In line with the preventative strategies defined by the World Health Organization this paper defines preventative healthcare as any measure taken to offer disease prevention and health promotion. Disease prevention includes primary measures such as vaccinations for communicable diseases, secondary measures such as early detection of diseases, and tertiary measures such as improving treatment and recovery (World Health Organization, 2018). Health promotion includes activities that target lifestyle issues such as tobacco use, alcohol abuse, physical activity, and nutrition. It also includes activities addressing mental health, reproductive health and strategies to reduce issues such as domestic violence and other social issues. Disease prevention is therefore more targeted at access to medical developments while health promotion is more targeted at providing “access” to a healthy lifestyle (i.e., health education, sport programs etc.,).
strategies that are not cost saving. However, there might also be conflict arising from implementing new preventative healthcare purchasing strategies.
Burnett et. al (2016) carried out a study using institutional theory to analyze hospital responses to these pressures which identified conflict between alignment of hospitals financial strategies and external pressures. These pressures could also be seen as a conflict between long-term and short-term strategies/goals competing against each other. In a similar fashion, conflicts might arise between short-term goals (i.e., cost containment logics) and long-term goals (ie., preventative logics) for the HPO. Where the healthcare purchaser has to make decisions on which healthcare to purchase, and where the purchaser may face internal pressure as to which choices to make. Heavy investment in health promotion that will only return on its investment in the far future or screening many people for a disease that might only reduce a few complicated operations are choices that have to be made. Choices that if are positively favored, might create a large current investment. There is also limited agreement between what is considered a good investment with regards to preventative healthcare purchasing (Øvretveit, 2009).
This paper will guide the way for future healthcare purchasers on where to position themselves with regards to preventative healthcare purchasing. It will assess the pressures that HPOs are facing and what is done to make decisions in the presence of conflicting logics and internal pressures. Understanding the pressures, logics and conflicts will essentially help understand the incentives for preventative healthcare purchasing. This will foster an explanation for why a preventative option is or is not opted for by the purchaser and consequently why this preventative option is or is not an outcome from the HPO.
2. THEORETICAL BACKGROUND
2.1 Institutional theory and institutional pressures
Institutional theory is a large concept that spans through multiple disciplines and holds a vast number of elaborations and definitions. Institutional theory is rooted in early macro-level explanations of social creations such as bureaucracy, but newer more neo-institutionalist scholars have extended these ideas further into more micro-level explanations of social creations. A popular extension in this regard, particularly common among business school scholars, is towards social explanations of the development of organizations.
Institutional theory states that organizations are affected by the environment they operate in by institutional features that interfere with the organizations goals and decision making (Scott, 1987; Dacin, Goodstein & Scott, 2002). In a sense, institutional theory brings in the social context of organizational behaviors, that may not be explained from an economic or rational perspective (Dacin, Goodstein & Scott, 2002). It furthermore helps explain why organizations are becoming more homogenous but not necessarily more efficient (DiMaggio & Powell, 1983).
Prior institutional theory researchers saw institutions as stable (Scott, 1987), however newer researchers argue that institutions are rather evolving and changing (Pemer & Skjølsvik, 2016). Institutional change occurs when the institution is subject to change and a change in the institution is more likely when the change initiative has a recognized legitimacy (Dacin, Goodstein & Scott (2002). The notion of legitimacy is important as attaining legitimacy is considered necessary for organizational survival (Scott, 1987).
In light of this, it can be seen that there are various institutional pressures on organizations. These pressures help explain the complexity at work when institutions change, and to give a social explanation as to why organizations respond to change. Institutional pressures and institutional theory are especially useful for explaining organizational behavior that goes against rational economic behavior where for example an organization’s choice for a direction has no obvious economic gain or possibly a negative economic outcome (Oliver, 1997).
2.2 Institutional pressures and the healthcare industry
An industry where institutional theory is particularly applicable and interesting, when empirically examining organizations, is the healthcare industry. This because the healthcare industry is composed of healthcare organization that particularly act in ways that are seemingly constrained by limits put by society. In light of this, institutional theory can offer explanations as to the behaviors of organizations operating within this field.
However, how healthcare organizations experience pressures have only notably been empirically examined from a provider’s perspective (i.e hospitals, physicians) and the pressures examined are in many cases related to issues of quality and cost-containment (Burnett et. al, 2016). Very few studies have investigated how the institutional pressures for other healthcare organizations such as HPOs manifest themselves, and especially research on this in combination with other types of institutional pressures is lacking. As also identified in recent literature, a gap in institutional theory research is lacking in the empirical applications of the theory, especially to issues that can be used to understand and resolve organizational issues (Mohamad, 2017).
One interesting and nascent institutional pressure faced by HPOs is the pressures to invest in preventative healthcare options. Preventative healthcare has especially come around due to new availabilities of knowledge and technology that has enabled preventative measures such as an understanding for underlying risk factors and early illness detection possibilities. These developments have thus created an emergence of new pressures on healthcare institutions.
consensus among advocates as to which preventative healthcare practices are the most beneficial (Øvretveit, 2009). Moreover, healthcare can be seen as moving towards preventative practices rather than curative ones, but the exact role of prevention in healthcare has yet to be determined (Øvretveit, 2009; Cohen, Neumann & Weinstein, 2008). Moreover, the role of the HPO and purchasers within these organizations are therefore also not established yet.
2.3 Preventative Institutional Pressures on HPOs
As mentioned previously, there are various sources of institutional pressures that push organizations in similar directions with the unanimous goal of attaining legitimacy. In the case of the healthcare industry this would mean that, in a simple sense, any healthcare organization must conform to the institutional pressures put on them in order to maintain their legitimacy as a healthcare organization. More specific to this research, it means that when there are institutional pressures for preventative healthcare the HPO will try to conform to these prevention pressures in order to keep their legitimacy as a HPO. This leads to the development of the following research questions about the institutional pressures on HPOs:
Research question 1: What are the institutional pressures experienced by HPOs?
However, the institutional pressures do not tell the entire story of how organizations change to become more preventatively oriented. In order to assess the entire process of change one also has to assess how this change manifests itself within the internal environment of the organization. This leads us to how the institutional pressures affect the institutional logics that are followed and how a change in pressures can influence these logics. This will be explained in the following section.
2.4 Institutional Logics and Institutional Pressures
The introduction of such a profession logic should not go unnoticed as it might have particular importance for the understanding of organizational outcomes. From an institutional perspective, professions can be seen as institutional agents by defining, interpreting and applying institutional elements and thereby being highly influential by leading the way in creating and tending institutions (Scott, 2008). Thus, if professions also develop their own logics this could have a great impact of how they define, interpret and apply the institutional pressures they experience. An example of this importance was highlighted by Pemer & Skjølsvik (2016) who found that when (new) formalization procedures were implemented the different professions of consultants, client managers and purchasing professionals within the same organization adopted different logics in response to being more formalized. In this instance, the different professions adopted different logics as the corporate logic (i.e new formalization procedures) did not align well with the core functioning of their professional duties. This is similar to the idea of Besharov & Smith’s (2014) logics multiplicity, where the logics that were pressured to be adapted by an organization were too different from the core functioning of the organization, which inevitably caused extensive conflict.
Research question 2: What institutional logics do the different professionals within HPOs follow?
Research question 3: How does preventative institutional pressures influence the logic multiplicity within HPO?
Research question 4: What are the conflicts arising from the logic multiplicity and how does this conflict affect the outcome for the HPO?
It would therefore be interesting to investigate this potential influence of preventative institutional pressures and how this difference manifests itself in different types of HPOs. The cross-case will therefore further assess the differences between monopolistic and competitive HPOs in light of the four identified research questions.
2.5 Conceptual Framework
Figure 2.1
Conceptual Framework
3. METHODOLOGY
3.1 Research Design
The aim of this research was to investigate and build theory surrounding how the preventative healthcare pressures manifest themselves within HPOs in relation to institutional logics and internal pressures. While also investigating the multiplicity of the identified logics and resulting conflicts. In order to achieve this aim, an exploratory case study research was carried out.
Case study research was especially appropriate because it allowed for an in-depth analysis of the organization in its natural environment, which is in this study necessary to assess the different pressures and to reveal which institutional logics are being followed. Other research designs would not yield sufficient richness of data in order to fully answer the research questions. The research is explorative in nature as the research aims at identifying pressures and institutional logics within a new purchasing context (i.e., preventative healthcare) where limited pre-existing variables have been established in literature. This field of research is particularly in need of exploratory research to identify variables that can be further empirically tested and built upon (Haveman & Gualtiere, 2017).
3.2 Case Selection
The unit of analysis of this research are healthcare purchasing organizations (HPOs). This case study is a multiple case study where a total of four cases have been selected. The cases were selected on the basis that they were involved in purchasing primary or secondary healthcare (or both) and based on the type of their healthcare system (monopolistic or competitive).
3.3 Context
The context of this multiple case study is the healthcare system in Norway, Spain, Germany and The Netherlands. All the selected cases operate within that environment and are part of their respective healthcare systems. As the within-case analysis of Norway goes more in depth, the healthcare system of this case will be presented.
3.3.1 The Norwegian Healthcare System
Structure. The Norwegian healthcare system is semi-decentralized and is divided into
two main branches of primary care and specialist care (Regjeringen, 2014). An illustration of the main division of health services between primary and secondary care is provided in table 3.1
Table 3.1
Primary care and secondary care
*adapted from regjeringen.no (2014)
The municipalities are responsible for the primary care services and the regions are responsible for specialized care services (Ringarn, Sagan, Saunes & Lindahl, 2013). The responsibilities of the secondary care services are divided between four regional health authorities (RHAs): South-East, West, Middle and North.
Primary Care Secondary Care
General Practitioner Ambulance Service
Emergency Room Regional psychiatric centres
Health Clinic Hospitals
Home Based Services Specialized Doctors
Nursing Homes Rehabilitiation centres
Patient choice. The Norwegian healthcare system aims at being patient-centered, which
in it also includes that the patient is free to choose their preferred general practitioner, hospital and other healthcare service provider, regardless of which region, county or municipality they live in (Ringarn et. al, 2013). This can particularly be useful if one wishes to reduce waiting times for care, as different healthcare providers are subject to different waiting times (helse-vest, 2018). However, Ringarn et. al (2013) points out that it is important to note that a referral from a general practitioner is always necessary to enter into the secondary care system (i.e hospital, specialists etc). In some instances it is also possible for individuals to choose private healthcare institutions as opposed to public, however these agreements are under continuous development (Helse-Vest, 2018). There is no notable difference between private and public healthcare providers, except for reduced waiting times and less referral requirements in private providers (Ringarn et. al, 2013).
The Norwegian Population. It is anticipated that the Norwegian population will
increase with 35% between 2010 and 2050 and that the group of persons aging 80 years or older will increase from 4.6% (2010) to 8.4% in 2050 (Statistisk Sentralbyrå, 2011). Furthermore, the population of working persons in 2010 was 61% but is predicted to be 57% in 2050 (Statistisk Sentralbyrå, 2011). However, an important note is that the number of persons between 67 and 79 years of age is expected to increase towards 2050, and if the population stays healthier longer it is a possibility that this age group can be part of the working population (Statistisk Sentralbyrå, 2011). As such, there can be seen a need for cost-containment and/or preventative healthcare in the country as the population is increasing, the older age group is increasing and the workforce is decreasing. This alongside a disease pattern of chronic diseases that are not expected to decrease (Statistisk Sentralbyrå, 2011).
Norwegian Healthcare Reforms and External Pressures. The following reforms can
Ringarn et. al (2013) Norway’s healthcare expenditures are high compared to the OECD and hospital bed occupation is also significantly high (93% Norway vs EU average 76%).
3.4 Data Collection
In Germany and The Netherlands sickness funds and insurers of a medium to a large size were invited to participate. In Spain the autonomous communities were invited to participate and in Norway the regional health authorities were invited to participate. This resulted in acceptance from one German sickness fund, one Dutch insurance company, one autonomous community (Spain) and one regional health authority (Norway). However, after contact with the regional health authority it was established that their role in purchasing preventative healthcare was limited as this responsibility was transferred to the hospitals (for secondary care) and to the municipalities (for primary care). This research was not focused on providers (i.e., hospitals) so to collect information about HPOs in Norway it was re-decided to focus on municipalities.
20 municipalities were contacted which led to an initial acceptance of two municipalities (small and large). For the large municipality the first interview was scheduled but was cancelled on the same day, and consequently due to time constraints it was decided to not pursue this municipality. In the end, one small municipality was selected. A table with the details of the selected cases can be found in table 3.1.
Table 3.1 Case Selection
Case Type Size HC System Responsibility Healthcare
Case A (Norway) Municipality (local) Small Monopolistic Primary Case B (Spain) Autonomous
community
Large Monopolistic Primary Case C (Germany) National insurance
company
Large Competitive Primary Secondary Case D (The
Netherlands) National insurance company Large Competitive Primary Secondary
followed an interview protocol for the purpose of collecting comparable data and to further increase the reliability. The interview protocol can be found in appendix A.
Before the start of the interview the participants agreed to the consent, which outlined their rights to withdraw from the study at any time and ensured anonymity. The interviews were recorded using an audio-device (i.e., iphone) and audio-tapes were deleted after the transcribing was completed. A total of 19 interviews were collected (3 for A, 6 for B, 4 for Case-C and 6 for Case-Case-D). All interviews for Case-Case-A and one interview for Case-Case-D were carried out via phone, the remaining interviews were carried out face-to-face.
3.5 Data Analysis
The data was analyzed using an inductive coding system. Inductive coding was used in alignment with the exploratory nature of this research, where themes were not known beforehand. To analyze the data this research used the first-order concepts, second order themes and aggregated dimensions structure as explained by Gioia (2013). Firstly, from the transcripts first-order codes were formed. These codes were based on the participants terminology, and were raw and contained varying ungrouped terms. Following the first-order coding, these generated codes were reduced and categorized into first-order codes. Secondly, the second-order themes were assessed on a more theoretical level, where the terminology of the participant was connected to a theoretical level in order to interpret and explain what was found during the research. During this process, it was identified that all the pressures allocated in the data belonged to categories made in previous research (mimetic, coercive and normative), and as such these labels were used for clarity. Lastly, when reaching a point of theoretical saturation an attempt to distill the second-order themes into aggregated dimensions were made. The coding tree can be found in appendix B.
The interviews were carried out in the native language respective of HPOs operating country. Due to that the interviews were carried out in another language than English, the data was coded by one person in the respective language of the interview (i.e., Norwegian, Spanish, German and Dutch). For each case a coding tree in English was provided that included the translated examples of sentences used for coding, alongside translations of first-order concepts, second-order themes and aggregated dimensions. These coding trees were combined and compared in order to carry out the cross-case analysis.
In order to account for inter-coder reliability bias, three interviews were translated into English (using software) and coded by a different researcher. In line with Gioia’s (2013, p.22) suggestion if the codes are systematically different then the researchers will “revisit the data, engage in mutual discussions, and develop understandings for arriving at consensual interpretations”.
4. FINDINGS
The main research question was to investigate the institutional pressures faced by HPOs and how the HPO influences them to engage in preventative healthcare purchasing. In order to analyze this, the question was divided into four sub-research questions 1) what are the Institutional pressures experienced by HPOs, 2) what are the institutional logics within HPOs, 3) What are the internal pressures within HPOs, 4) How do these pressures affect the logic multiplicity and consequently conflicts.
First the within-case analysis will be presented first and then followed by the cross-case analysis. The within-case analysis of Case A (Norway) is presented to show an elaborated picture of how institutional pressures, institutional logics, internal pressures and multiplicity of logics were derived from the interviews. Due to the nature of this paper, the cross-case analysis will not go into such detail but primarily serves as a means to compare the individual results derived from the different cases.
4.1 Within-case analysis
4.1.1 Institutional pressures experienced by HPOs
such as cost-cutting, cost-containing, cost-efficiency and fast return on investments. It became very evident that the municipality experienced high pressures related to costs. However, they also experienced healthcare provision related pressures such as ensuring that patients have a worthy life regardless of condition and a pressure towards being preventatively oriented. Furthermore, whenever the municipality received funds from the national budget (yearly allocation) it came with various state directions and political directions (local political party).
Another important coercive pressure was the recent reform “collaboration reform” where municipalities were obliged to collaborate with hospitals in an effort to reduce length of hospital stays through outpatient care by the municipality. This reform was explained as being very challenging for the municipality to comply with as the state put this reform without enough available funds for the municipality to achieve it, and in a sense serves as an implicit pressure to reduce outpatient costs in order to receive patients earlier from hospitals or to prevent persons from needing hospital care in the first place. The municipality would receive a fine for each day for persons declared ready for outpatient care that the municipality were not prepared to receive.
“ (…) so it is so that if a patient is ready for discharge from the hospital then the municipality says to the hospital that we don’t have the capacity and we do not have the expertise available right now. Then the counting starts and for each day you get fines of 4000
kroner a day if the municipality does not accept the patient.“ (professional 3, case A)
The municipality was also obliged to collaborate with GPs and was in charge of hiring GPs and paying their fixed costs (yearly costs of operations), however due to a recent reform “General Practitioner Scheme”, many GP’s operated privately and got reimbursed directly from the state following set national guidelines. Nevertheless, the municipality was still responsible for hiring the GP due to their responsibility to ensure all primary care. The source of the pressures were mostly governmental agencies such as the Ministry of Health, county hospitals and the local political party. Also documents such as state generated reforms and the constitution where (indirect) sources of pressures.
“At some point we just have to do it, because the prevention initiative it is so mature or overipe, now we just have to do it” (professional 2, case A)
The sources of normative pressures identified were other municipalities, country council and public health institute. The two latter sources were particularly used as means for the municipality to gain knowledge of municipality “norms”.
Thirdly, the mimetic pressures found where that the municipality used other healthcare organizations as referents when there were no clear laws regarding an issue, they worked towards similar solutions for preventative offerings, they used similar effective purchasing routines, and in general followed initiatives (i.e., best practices) that had worked for others. The sources of the mimetic pressures where primarily the health directorate, county council, other municipalities and state generated statistics (i.e., a comparison where municipalities are categorized into similar groups and measured on different variables).
Preventative pressures
Table 4.1 Institutional Pressures
Institutional
Pressure Coercive Normative Mimetic
Type (what)
• short term roi • cost-effectiveness • worthy life • delivery of service regulation • state directions • prevention • cost-cutting • cost-containment • political directions • preventative activitiy is mature or overripe • prevention is also done in similar organizations • technological collaboration inititatives
• using others when there are no clear laws • offer similar
prevention solutions as others
• using similar effective purchasing routines • follow initiatives that have worked for others
Source (who)
• ministry of health • county council • national budget (state) • state generated reforms • constitution • political party (municipality) • user-groups • other similar municipalities • public Health Institute • health directorate • county council • other municipalities • state-generated statistics (municipality comparison)
4.1.2 Institutional logics within HPOs
Table 4.2
Institutional Logics
Main beliefs, values and material practices Institutional Logic Budget limits
Cost-containment Logic Cost-cutting initiatives
Necessity
Care-assurance Logic Provide care for healthcare category
Law regulation Urgency
Prevention rather than repairing Prevention Logic
Cost-containment Logic. Individuals were found to follow a cost-containment logic on the
basis of always striving to meet budget limits, having a high focus on cutting costs and not spending too much. One individual explained one way this logic manifested itself.
“we want to provide services that are good enough, not too good and thereby not too expensive” (professional 3, case A)
Furthermore, the importance of meeting budget limits included examples of that it might sometimes be necessary (hypothetically) to stop the day-care center initiative or sometimes to fire someone in order to contain the costs within the budget.
“(…) so we got a budget that was adopted a few days ago which was 2.7 million less than what I really need, so what do you do then. Are you going to put the day-center down again,
or you have to fire someone” (professional 2, case A)
“(…) we have to cut down so we have to enter into discussions with the safety delegates and union representatives to get down the costs (…) We must see what is not legally required by
law of the services that we give” (professional 1, case A)
Care-assurance Logic. A care-assurance logic was identified on the basis that it was
particularly important to ensure that patients with necessary needs received their needed care. Firstly, it was found that those patients that need to be cared for will always be prioritized first.
«The patients that need visitations and those that need to be cared for, those we always need to prioritize first” (professional 1, Case A)
Secondly, it was found that persons for which care is essential, the budget allocated to them will never be cut or “touched”.
“Some persons simply cant live by themselves, and those persons one cannot touch the budget of” (professional 2, case A)
Lastly, it was also identified that in cases were more persons needed care than what was originally in the budget, then they would use more money than what was in the budget to cater for those needs. Thereby, indicating that ensuring that care is received to those that are vulnerable, urgent and in general in need of care was one of the top priorities.
“sometimes we just have to use more than what we have in the budget, simply because there might be an unexpected healthcare user that needs a lot of care” (professional 1, case A)
Prevention Logic. Evidence for a prevention logic was also found, and in this regard it was in
terms of that initiatives were particularly done with the intention that preventing is more important than repairing.
“We do these initiatives because and to acknowledge that preventing is more important than repairing” (professional 2, case A)
material practices or behaviors. As such, the cognitive value that “it is important to prevent” could be present by the person stating that they find it truly important. However, the presence of preventative initiatives did not always mean that the person did this with the cognitive value to “prevent”, but possibly as a cognitive value to “cost-contain”. This distinction was sometimes hard to make.
4.1.3 Internal pressures within HPOs
The internal pressures found were coming from other municipality departments, other healthcare departments and the municipality communal leader (see table 4.3). Firstly, pressures from other municipality departments were particularly found due to the structure of the municipality including other non-healthcare departments and the funding allocation from the national budget (i.e., one sum of un-earmarked funds for the municipality to distribute with large freedom). Therefore, these other departments were not related to healthcare provision but if they would need extra funds, could affect the funds allocated to the healthcare section. An example of this was that if the municipality saw it more necessary to build a new school or extend the broadband wires, this could mean that the healthcare section would not be able to get any extra funds.
“ (…) so the municipality can decide for themselves what to use. Then of course there may be needs that are stronger if, for example, you want to do something on schools or build out
some broadband or something like that” (professional 3, case A)
Furthermore, the internal pressures between departments were also found with regards to the need for the entire municipality to cut down on costs, where the different entities were “fighting” to avoid the biggest funding cuts.
“(…) it can quickly develop goal conflicts between the different sections in the municipality (…) and it is clear that there will be a hard fight between the three about who will be given priority. Right now, it is a struggle to avoid getting the biggest cuts” (professional 3, case A)
it would affect the others and if one person argued their case better this could mean they received funds instead of another department.
“(…) I see what I need and they see what they need and to then it is up to the communal leader to decide. (…) we do not argue, we know that the others need it as much as us, but I
have to speak up for my areas” (professional 2, case A)
Thirdly, the communal leader provides pressure to the healthcare departments particularly through the continuous budget discussions and that individuals with multiple needs have to be managed between departments.
“the discussion with the communal leader about the budget is an ongoing discussion throughout the year” (professional 1, case A)
Table 4.3 Internal Pressure
Internal pressure Source of pressure (who)
Goal conflict between other departments
Other municipality departments Avoid biggest funding cuts as a department
Allocation of funds between departments
Other healthcare departments The use of funds in one department could affect the
funding in another department
The communal leader decides in the end between high disagreements between the departments
Municipality "comunal leader" The communal leader discusses the budget with me
throughout the year
Individuals with multiple needs collaboration pressure
4.1.4 Logic Multiplicity and Conflict
for organizational functioning, but their required actions were different (i.e., what needs to be done for the logic to be carried out). In the data, this conflict can also be found. First of all, the absence of a dominant logic can be seen by conflicting statements such as:
1) “sometimes we just have to use more than what we have in the budget, simply because there is a user that needs a lot of care” (professional 1, case A)
2) “sometimes we just have to cut costs even when this means we take even more from the persons who already have very little opportunities” (professional 1, case A)
4.2 Cross-case analysis
4.2.1 Institutional pressures experienced by HPOs in different healthcare systems (monopolistic vs competitive)
When comparing the institutional pressures experienced between the different monopolistic cases (Norway and Spain) and competitive cases (Germany and The Netherlands) it was found both similarities and differences. There were found various different institutional pressures per case but only a few were applicable for portraying the following comparison (monopolistic vs competitive). Most of the identified pressures for this comparison are coercive and one pressure is mimetic.
Similarities. The main similarities between monopolistic and competitive were pressures on
return on investment, cost measures and prevention. Firstly, most pressures on return on investment were linked to a (positive) return within three-four years. The Norwegian case had slightly more pressures towards returns per one year due to their focal budgets, however departments could apply for project funds from the county which would have an extended budget period of potentially three years (approximate figure).
Secondly, cost pressures were also a common experience. While the cost pressures varied in nature (i.e., cost-containment, cost-efficiency, affordability etc.,) the organizations all faced institutional pressures to manage their spending in one way or another. Thirdly, pressures to focus on prevention were also present in all organizations. All organization operated in environments were HPOs were expected to take on some form of preventative measure.
Differences. The main notable differences between monopolistic and competitive were the
operating in a competitive healthcare system one could see relatively specific preventative pressures in terms of requirements from their respective national authority. For The Netherlands this was through the preventative lifestyle initiative introduced in the basic package and in Germany this was through the legislation that a certain amount of the budget needs to be related to prevention.
In contrast, the monopolistic HPOs did not face similar stability or specificity of preventative pressures. In Spain the organization would face different political strategies every fourth year, when there were elections for new representatives. In Norway, there was also a clear lack of specificity linked to the prevention pressures that the organization experienced. An example of this was particularly present in the recent reforms aimed towards increasing the prevention focus, which lacked clear measurable variables on the prevention aspects.
Secondly, competitive organizations were more likely to try to copy other organizations in prices and offerings in order to gain a competitive advantage (i.e., receive more customers and more revenue), whereas monopolistic organizations looked for best-practices and/or collaborations in order to make better use of their allocated funds.
4.2.2 Institutional logics within HPOs with different healthcare systems (monopolistic vs competitive)
When investigating the institutional logics that the different HPOs followed it was found differences between monopolistic and competitive organizations. However, there were found no similarities between monopolistic and competitive organizations. Similar to institutional pressures, it was also found variations that were not systematic to a monopolistic or competitive orientation. The findings are displayed in table 4.4, and further explained below.
Table 4.4 Institutional Logics
Monopolistic Competitive
Monopolistic. It was observed similar logics for monopolistic organizations such as a cost
related logic, prevention logic and care(-assurance) logic. The main values, beliefs and material practices were rooted in a wish to give care, to act in accordance cost measures and that prevention is important. Furthermore, issues of costs were addressed in terms of cost-containment (Norway) and cost-efficiency (Spain). The main difference between the cost orientations were that Norway had a high focus to cut costs as the Ministry of Health (National Budget) pressured with a reduction of funds while in Spain the cost-efficiency was due to the political party pressuring for a positive outcome to show their voters. Both organizations displayed a view that prevention was important in terms of removing illness from society.
Competitive. In the competitive system there were found to be similarities concerning
economic/financial logics and marketing/consumer-oriented logics. The main values, beliefs and material practices were rooted in a wish to ensure economic and financial viability and to maintain their consumer base. This focus created an economic/financial logic where it was important that revenues were higher than costs and thus where it was a constant focus as well on acquiring revenues and assessing costs with regards to revenues made. Following this, they were also seen to have a marketing/consumer logic where it was important to assess and target the demands and wished of their consumers and ensuring that the consumers felt drawn to their company as opposed to another company.
4.2.3 Internal pressures within HPOs
Case C (Germany) did not report any internal pressures. In order to assess the difference between monopolistic and competitive organizations Case D (The Netherlands) will solely represent competitive organizations and Case A (Norway) and Case B (Spain) will represent monopolistic organizations. There were found both similarities and differences in internal pressures, as outlined below.
Similarities. The similarities between monopolistic and competitive HPOs were that there was
with the communal manager in order to align their budget objectives. In The Netherlands, these pressures were seen from statements directly referring to the role of the management.
"If we cannot find a solution for this conflict, the management takes a decision" (professional
1, Case D)
While less evidence for this finding was present in Case B (Spain), it is nevertheless and interesting finding that both Case A (Norway) and Case D (The Netherlands) faced similar pressures from other departments with regards to collaboration. In Case A (Norway) the departments experienced difficulties in collaborating due to different objectives per department and the (negative) impact collaboration could have on their costs.
“We sometimes have many nice examples of collaborations, but in many cases as well it proves difficult, so and so because of costs” (professional 1, Case A)
All of the interviewees in Case A (Norway) further elaborated that collaboration was especially important with regards to prevention, as prevention usually indicated targeting healthy individuals of which was not really part of any department’s responsibility. Similarly, in the Netherlands, being asked for help by other departments was seen as problematic as it did not necessarily contribute (positively) to their own key performance indicators (KPIs).
"We all have our own KPIs and objectives, it could be that they ask for my help, but sometimes it doesn't add to obtaining my KPIs and objectives" (professional 1, Case D)
Differences. The main difference was that monopolistic organizations gave unified statements
of their belief in prevention while in the competitive organization there was both a presence of belief in prevention but also a presence of a disbelief in prevention. The un-unified nature of preventative belief consequently caused an internal pressure from the disbelievers. One such disbelief was a statement regarding the new lifestyle intervention in the basic care package, and how the professional did not believe in it.
4.2.4 Logic multiplicity, conflicts and consequent outcomes
Logic multiplicity. For monopolistic organizations, there was identified problematic logic
multiplicity as there was multiple logics which were highly related to organizational functioning. How compatible and important logics were found to be is illustrated in table 4.4, and this table will be further reflected on in the discussion. For competitive organizations there were identified multiple logics, however only the logics related to economics/finance could be related to important for organizational survival. The presence of this dominant logic made the other logics peripheral in nature.
Table 4.4
Degree of compatibility between logics
Case Degree of compatibility
Case A
(Norway) Institutional logic Cost-containment logic Care-assurance logic Prevention logic Cost-containment
logic* Low Low
Care-assurance
logic* Low Low
Prevention logic Low Low
Degree of compatibility
Case B (Spain) Institutional logic
Cost-efficiency logic
Care logic Political logic Cost-efficiency
logic* Low High
Care logic* Low Medium
Political logic* High Medium
Prevention logic Low Medium Low
Degree of compatibility
Case C
(Germany) Institutional logic Economic logic Marketing logic
Economic logic* High Excluded
Marketing logic Excluded
Degree of compatibility
Case D (The Netherlands)
Institutional logic
Financial logic Quality of care Customer oriented logic Prevention logic (positive) Financial oriented
logic* Medium High Low
Quality of care
logic Medium High Medium
Customer oriented logic
High High Medium
Prevention logic
(positive) High Medium Medium
Prevention logic
(negative) Low Medium Medium Low
5. DISCUSSION
5.1 The development of a prevention logic
When investigating whether professionals followed a prevention logic the main issue with regards to the preventative logics found where that it was not always clear if the person wanted to prevent in order to prevent illness (moral) or to prevent in order to save costs (cost-containment). This finding was triangulated with recent research where it was identified a critique based on the fact that the definition of logics includes both cognitive and material practices which can complicate analysis (Haveman & Gaultier, 2017). Caution should therefore be made to attribute a prevention logic on the basis of materialistic findings, such as the presence of preventative initiatives as they could be the outcome of another logic.
5.2 Institutional pressures and institutional logics
Firstly, when comparing the different cases it was found that all cases experience pressures to be preventative. Thus, indicating that regardless of being a monopolistic or competitive HPO, the organization faced institutional pressures to be preventative. This leaves us to the following proposition.
Proposition 1: HPOs experience institutional pressures to carry out preventative initiatives
Secondly, it was found that different HPO’s experience different institutional logics. Some HPO’s experienced more variety than other HPO’s, and there was also a difference in the amount of logics. As also noted previously in the within-case analysis, a reason for those differences could potentially be attributed to differences between professionals as manifested through organizational hiring practices (Pache and Santos, 2010). With regards to prevention it was found that HPO’s follow no prevention logic, positive prevention logic and a mix of positive and negative prevention logics.
Proposition 2: HPOs can follow no prevention logic, a positive prevention logic, and a mix of
prevention logics (negative and positive).
gave further indications that the way preventative pressures affect the HPO to act preventative was not a result of the mere presence of a prevention pressure coupled with a prevention logic. More interestingly, the absence of a prevention logic did not mean that the HPO did not carry out (observable) preventative initiates. As was seen in Case-C that did not have any prevention logic but continuously used 3-4% of their annual budget on prevention. And furthermore, the type of logic (positive, negative or mix) also did not seem to particularly give indications of whether the organization carried out preventative initiatives. This leads us to the following proposition.
Proposition 3: The presence and/or the type of prevention logic within a healthcare purchasing
organization does not obstruct the manifestation of (observable) preventative organizational outcomes
What these findings indicate is that there is more to the story of how preventative outcomes come to life than just the presence of a prevention pressure and the presence of a prevention logic within the organization. Triangulating these findings with the research made by Besharov et al., (2014) on multiplicity of logics (i.e., presence of multiple logics) gives an insight into the possible dynamics happening between the logics within the organization in the event of an institutional pressure. In the findings (see table 4.3) the institutional logics found during this study were categorized in line with terminology used by Besharov et al., (2014) in order to provide an aligned structure. The implications for the findings in terms of the differences in logic multiplicity and consequent conflicts will further be discussed in relation to institutional pressures on the organization and the role multiplicity plays in the organization.
5.3 Logic multiplicity between the cases
Table 5.2
Logic multiplicity in the different cases
Case Centrality Compatability Conflict
Case A (Norway) High low Extensive conflict
Case B (Spain) High low Extensive conflict
Case C (Germany) low high* No conflict
Case D (The
Netherlands)
low low Medium conflict
*marketing logic is assumed to be compatible with economic logic on the basis of triangulated secondary data from company documents (i.e., not from interview)
The data suggests that monopolistic HPOs (Norway and Spain) experience more conflicts than competitive HPOs (Germany and The Netherlands), as can be seen in table 5.2. All cases except for case-C (Germany) were found to have low compatibility between the different logics within the organization. The main reason for the difference between monopolistic HPOs having more conflicts was because they had more than one core logic that was important for organizational functioning. In monopolistic HPOs the organization valued both the care-assurance logic and the cost-containment logic (case-A Norway) and political logic and care logic (case-B Spain). Furthermore, the value of these logics being important for organizational functioning while simultaneously not being very compatible also created additional (extensive) conflict. As can be seen in the findings, extensive conflict was also evident in the data for the monopolistic HPOs as reported by interviewees.
This orientation further highlights that there might be inherent difference in that competitive HPOs have costumers versus monopolistic HPOs that have inhabitants, in that sense. However, it also suggests a problematic finding of the indication for when the resource dependency is on a centralized organization (i.e., government, regional political party) that has the entire population in mind imposing missions/strategies on a less central level.
Proposition 4: Monopolistic HPOs are more likely than competitive HPOs to have multiple core
logics as a result of misalignments between their resource dependent logics and mission-strategy dependent logics
In the competitive HPOs the only core logic that was followed was the financial/economic logic, and in light of this the other logics within the organization were seen as peripheral (i.e., less superior). Interestingly, when comparing the two competitive HPOs it can be seen how one competitive HPO (case-C Germany) had only one peripheral logic (i.e., logics that are present but not considered core) whereas the other competitive HPO (case-D The Netherlands) had various peripheral logics. In line with the suggestions of Pache & Santos (2010), the variations of the peripheral logics between organizations could be attributed to differences in hiring and socialization practices of the organization. This could particularly explain the differences between the two competitive HPOs as hiring a more divergent group of professionals could lead to more polarized values and beliefs (i.e., logics) within the organization. Scott (2008) further addressed how professions can are highly influential by creating and tending institutions, and this might be manifested through their creating and tending of institutional logics. In light of these findings it is therefore suggested the following proposition.
Proposition 5: The divergence and variation of professionals as such influence the amount and
variation of peripheral logics within the HPOs
5.4 Prevention pressures and logic multiplicity
cost-efficient prevention options (i.e., vaccines). This could indicate that when the preventative pressures are less directed, it gives the recipients options as to how to act. These options will then be chosen based on the dominant logic. This leads to the following proposition.
Proposition 6: When the nature of the preventative pressure is at the ‘goal’ level, the organization will respond to the pressure with the ‘means’ that are the most in favor of the dominant logic
However, this example shows how the prevention pressure aligns within an HPO that has a dominant logic. In the case where there is no clear core logics and the presence of a preventative pressure, it is unclear what the organization will do. Also as seen during these findings and also in line with Besharov et al., (2014), the HPO might not have any clear direction on where to stand when faced with preventative pressures. However, interestingly during the interviews when asked about the internal environment, all cases (except for case-C Germany) reported that if there were conflicts they would be solved by higher management. Indicating that, in organizations that experience high conflicts, the preventative pressure might first cause conflict in the organization that will then be resolved by someone in a higher hierarchal position. This could indicate that the logic of those professionals are vital for whether the prevention initiatives will be carried out. This leads us to the final proposition.
Proposition 7: In HPOs that do not have a dominant logic, the conflict will be resolved by the internal pressure which might manifest itself predominantly due to hierarchal power
5.5 Theoretical Implications
Institutional logics. This research adds to the research on institutional logics by
challenging the core definition of “values, beliefs, material practices”. In line with critiques made by (Haveman & Gaultier, 2017) it was found problematic to categorize certain values, beliefs and material practices due to their natural differences. These differences were that values and beliefs were operating on a cognitive level whereas material practices were operating on a material level (observable). As such, (Haveman & Gaultier, 2017) proposes to leave out material practices in the definition of institutional logics.
of many preventative protocols or initiatives (material practices) does not indicate that there is a preventative logic at the cognitive level (i.e., belief, value etc.,), as this could have been the outcome of a belief that this initiative will save costs. Thus, this study provides empirical evidence in line with Haveman & Gaultier (2017) that this distinction is potentially very important to make more accurate comparisons across institutional logic literature.
Multiplicity of logics. During this study similar patterns of organizational behavior
with regards to multiplicity of logics were found as previously proposed in literature. This research therefore adds further empirical evidence to the presence and effects of multiple logics and the dynamics at place when organizations encounter institutional pressures. Furthermore, it adds to the framework of Besharov et al., (2014) in terms of proposing the importance of the internal pressure in the presence of conflicts. In this regard, it proposes that internal pressure is subject to hierarchical factors where it is seen that when the organization is in conflict final decision makers of higher power steps in. A positive outcome could therefore, in the presence of conflict, highly depend on that final decision maker.
5.6 Managerial Implications
The most important practical implications are for policy and reform makers to understand the pressure and implications it has on the organizations they target. First of all, the pressures focusing on goals might create opportunities for the HPO to act in their own way and possibly more short-term oriented, but at least it allows for a positive direction towards prevention. As can be seen the preventative pressures can also make HPOs feel “lost” without a clear idea how to tackle all of the new (pressured) responsibilities. Meaning that putting pressures on HPOs will not always make them comply, if the pressures are unrealistic or misguided.
It is also important to understand how one can influence these organization to be more receptive to preventative pressures by understanding how the logics and multiplicity might come to life through the professionals within the HPO. This could mean that hiring practices of the HPO might systematically favor different types of individuals which could impact the logic multiplicity within the HPO.
governmental agency put pressure on the healthcare sector is beyond the scope of this paper, but its nevertheless an interesting observation.
5.7 Future Research
Firstly, future research could focus on how the logics within the organization changes over time. As new professionals enter and leave, according to findings of this research, the HPOs might change logic multiplicity. The assessment of whether logics can be seen as static or not could therefor yield interesting additions to these findings.
Secondly, this study found that HPOs could vary greatly in the amount of peripheral logics (i.e., not core logics) that manifested themselves within the organization. In light of this, it would be interesting to assess how the amount of peripheral logics affect the outcomes of institutional pressures.
Lastly, the preventative pressure for the adoption of a “means” was found in case-D (The Netherlands), as most preventative pressures on HPOs are shaped as ‘goals’ it would be interesting to research how this pressures manifests itself in the HPOs over time.
5.8 Limitations
Case selection was primarily through convenience sample or a mix of convenience and snowball sampling. Moreover, many organizations did not respond to the research invitation, indicating that the selected HPO’s might have been more intrinsically motivated to participate than other HPOs. This could potentially have had a systematic effect on the data.
Furthermore, even though every researcher used a similar interview protocol, as individual researchers focused on slightly different research directions, it is acknowledged that the probing of the questions during the interviews might have been (implicitly) affected. This could have had an effect on the detail in which some data for each construct was collected or especially with regards to details that might have been missed out on. Also the probing skills of the different researchers could create implicit differences in the data.
findings can be generalized to HPO’s in Western Europe, but with the caution to not generalize findings to HPOs that only purchase secondary care or that have a very different structure than the HPOs in this case.
6. CONCLUSION
Some pressures are good and some pressures are bad, and as can be seen the determinant of this can depend on the internal environment of the organizations. In this study the main focus was on how the preventative institutional pressures affected HPOs. In order to assess this it was first established how the internal environment was within the organization by analyzing the logics, logics multiplicity, conflict and internal pressures. Furthermore, it was then found that in some organizations the institutional pressures could create more conflict than in other cases.
Particularly, the focus was on prevention pressures and in many instances these pressures did not align well with the logics and logic multiplicity within HPOs. This multiplicity caused a conflict which was either resolved by the organization having one dominant logic or by the presence of multiple core logics that were fighting for dominance and essentially decided upon as a result of the internal pressures within the organization. It was identified that the nature of the pressure could play a part in the conflict and adoption of the logic as a ‘goal’ preventative pressure could be achieved using ‘means’ in favor of the dominant logic (i.e., economic/financial logic). No cases reported any preventative ‘means’ pressures except for The Netherlands (but it was just adopted), so it could not be assessed.
In light of this, it was seen that when faced with pressures to be preventive, healthcare purchasers often reached for sub-optimal solutions such as small extra projects for prevention (Norway and The Netherlands), short-term efficiency prevention programs (Spain) or they by law allocated a certain percentage to prevention due to law regulations (Germany). Thus, while HPOs are moving in the right direction, due to the nature of the prevention pressures coupled with the internal environments of the HPOs, it was found that short-term objectives prevail.
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