Dr Madhav Madhusudan Singh
MBBS, MHA (AIIMS) , MBA (Finance), Ph.D. ( Hosp Mx)
Introduction:
Orthogonal integration is a unique business strategy that involves forming independent partnerships with both competitors and non-competitors to gain a competitive advantage in the market. This approach aims to develop complementary services or products that do not compete with your own or align with your competitors, thereby increasing your market share and customer base.
The healthcare sector is a prime example of an industry that can benefit from orthogonal integration. Hospitals can use this approach to partner with other healthcare providers, suppliers, and technology companies to improve patient care and streamline their operations.
What is Orthogonal Integration?
Orthogonal integration is a business strategy that involves forming partnerships that are independent and non-overlapping with both one's competitors and one's primary business. The goal of orthogonal integration is to gain a competitive advantage in the market by developing complementary services or products that do not compete with your own or align with your competitors. This approach is different from horizontal and vertical integration strategies, which involve acquiring or merging with other businesses that operate in the same or different stages of the value chain.
In a hospital setup, orthogonal integration can involve forming partnerships with other healthcare providers, suppliers, and technology companies to improve patient care and streamline operations. For example, a hospital may partner with a telehealth provider to offer virtual consultations and remote monitoring services to patients. This partnership is orthogonal because the telehealth provider does not compete with the hospital's primary business, but instead offers a complementary service that can improve patient outcomes.
Advantages of Orthogonal Integration in Hospital Setup
Increased Revenue: Orthogonal integration can help hospitals generate additional revenue streams by partnering with companies that offer complementary services. For example, a hospital that partners with a home healthcare provider can offer post-acute care services to patients who have been discharged from the hospital, thereby increasing revenue.
Improved Patient Care: Orthogonal integration can help hospitals improve patient care by partnering with companies that offer innovative solutions. For example, a hospital that partners with a technology company can leverage the latest digital health tools to improve patient outcomes and reduce costs.
Increased Efficiency: Orthogonal integration can help hospitals streamline their operations by partnering with companies that offer specialized services. For example, a hospital that partners with a medical waste management company can outsource its waste disposal needs, thereby freeing up resources to focus on patient care.
Disadvantages of Orthogonal Integration in Hospital Setup
Coordination Challenges: Orthogonal integration can be challenging to implement as it requires coordinating with multiple partners who may have different priorities and goals. This can lead to communication breakdowns, delays, and other coordination challenges.
Integration Costs: Orthogonal integration can be costly to implement as it requires investments in new technology, infrastructure, and personnel. These costs can be prohibitive for some hospitals, especially those with limited resources.
Competition from Partners: Orthogonal integration can be risky as partnering with other companies may create new competitors. For example, a hospital that partners with a home healthcare provider may face competition from the same provider in the future.
Example of Orthogonal Integration in Hospital Setup
Example of Orthogonal Integration in Hospital Setup in India
Fortis Healthcare, one of India's leading healthcare providers, has used orthogonal integration to expand its services and improve patient care. The company has formed partnerships with several companies to offer complementary services to its patients. These partnerships include:
1. Philips Healthcare: Fortis Healthcare has partnered with Philips Healthcare to launch India's first 'Radiology Day Care Center' at Fortis Memorial Research Institute in Gurgaon. The center offers a range of radiology services to patients, including CT scans, MRI scans, and ultrasound. This partnership has helped Fortis Healthcare improve its radiology services and reduce patient wait times.
2. Cipla: Fortis Healthcare has partnered with Cipla, a leading pharmaceutical company in India, to offer affordable cancer treatments to its patients. The partnership has helped Fortis Healthcare expand its cancer care services and provide affordable treatment options to its patients.
3. Medanta: Fortis Healthcare has partnered with Medanta, a leading healthcare provider in India, to launch the 'Medanta-Fortis National Bone Bank'. The bone bank offers bone grafts and implants to patients who require bone reconstruction surgery. This partnership has helped Fortis Healthcare improve its orthopedic services and provide better treatment options to its patients.
Example of Orthogonal Integration in Hospital Setup Abroad
Mayo Clinic, one of the leading healthcare providers in the United States, has used orthogonal integration to expand its services and improve patient care. The company has formed partnerships with several companies to offer complementary services to its patients. These partnerships include:
1. Optum: Mayo Clinic has partnered with Optum, a healthcare technology company, to develop a digital platform that allows patients to access their medical records and communicate with their healthcare providers. The platform has helped Mayo Clinic improve its patient engagement and provide more personalized care to its patients.
2. IBM: Mayo Clinic has partnered with IBM to develop Watson, an artificial intelligence platform that can analyze medical data and provide diagnostic insights to healthcare providers. The platform has helped Mayo Clinic improve its diagnostic accuracy and reduce the time required to diagnose complex medical conditions.
3. Epic: Mayo Clinic has partnered with Epic, a healthcare software company, to develop a new electronic health record system. The system has helped Mayo Clinic streamline its operations and improve its patient care services
Conclusion
Orthogonal integration is a unique business strategy that can help hospitals improve patient care and streamline their operations. By partnering with other healthcare providers, suppliers, and technology companies, hospitals can expand their services and offer complementary services to their patients. However, implementing orthogonal integration can be challenging as it requires coordinating with multiple partners who may have different priorities and goals. Nonetheless, hospitals that successfully implement this approach can benefit from increased revenue, improved patient care, and increased efficiency. The examples of Fortis Healthcare and Mayo Clinic demonstrate how orthogonal integration can be used to improve healthcare services in India and abroad.
Dr Madhav Madhusudan Singh MBBS, MHA , MBA , Ph.D
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Disclaimer: The views expressed in this text are solely the personal opinions of the author and do not represent the views of any organization or entity with which the author may be affiliated.
Blog Theme by Day :
Monday : Nursing administration
Tuesday : Hospital Quality & Patient safety
Wednesday : Medicolegal issues
Thursday : Hospital Finance / Marketing
Friday : Human Resource management
Saturday : Hospital Operation / IT
Sunday : CEO’s Dairy
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