Reexamining organizational configurations: An update, validation, and expansion of the taxonomy of health networks and systems

Objectives. To (a) assess how the original cluster categories of hospital-led health networks and systems have changed over time; (b) identify any new patterns of cluster configurations; and (c) demonstrate how additional data can be used to refine and enhance the taxonomy measures. Data Sources. 1994 and 1998 American Hospital Association (ARA) Annual Survey of Hospitals. Study Design. As in the original taxonomy, separate cluster solutions are identified for health networks and health systems by applying three strategic/structural dimensions (differentiation, integration, and centralization) to three components of the health service/product continuum (hospital services, physician arrangements, and provider-based insurance activities). Data Extraction Methods. Factor, cluster, and discrimmant analyses are used to analyze the 1998 data. Descriptive and comparative methods are used to analyze the updated 1998 taxonomy relative to the original 1994 version. Principal Findings. The 1998 cluster categories are similar to the original taxonomy, however, they reveal some new organizational configurations. For the health networks, centralization of product/service lines is occurring more selectively than in the past. For the health systems, participation has grown in and dispersed across a more diverse set of decentralized organizational forms. For both networks and systems, the definition of centralization has changed over time. Conclusions. In its updated form, the taxonomy continues to provide policymakers and practitioners with a descriptive and contextual framework against which to assess organizational programs and policies. There is a need to continue to revisit the taxonomy from time to time because of the persistent evolution of the U.S. health care industry and the consequent shifting of organizational configurations in this arena. There is also value in continuing to move the taxonomy in the direction of refinement/expansion as new opportunities become available.