Industry distinctiveness: implications for strategic management in health care organizations

The health care industry is characterized at its core by the requirement that the organization and financing of services recognize the concept of need for health care. This requirement is reflected in industry characteristics of market failure, professional dominance of physicians, and public concern with equal access to care. While market failure is decreasing as a result of the emergence of insurance companies as the "new consumers" of health services, physician dominance and concerns for access continue to be strong. These characteristics mean that successful health care organizations will be local-market focused, decentralized, and tied to community cultures. With regard to training of health services administrators, education should be strengthened in the area of strategy development, with appropriate recognition given to the distinctiveness of the health care industry.