Commercialization as a Recommended Approach to Hospital Restructuring Case Study of Łańcut Medical Center

Abstract

Our society is on the brink of health care system reorganization and implementation of new medical technology. Hospitals have to be a core component of the medical revolution so they have to be prepared for the upcoming leap in their development. If Poland wants to be a pioneer in providing new medical solutions, the current ineffective system has to be changed. The necessary action should be taken to deal with the financial problems Polish hospitals have faced for over 20 years. The current structure of hospitals - SPZOZ, is old-fashioned and cannot adapt to a turbulent social and economic environment. The hospitals should be commercialized and restructured. Being capitalized companies will give incentives and new tools to deal with financial problems.The article presents an example of the commercialized hospital in Łańcut. We make the observations that commercialization increases: a hospital’s profitability, its employment productivity, its capital investment spending and leverage. The case proves that the transformation of hospitals to capital companies proposed by the Ministry of Health may be an appropriate approach and it does work once a reasonable management board is in charge. However, the legal structure alteration should be treated as the first step in the overall restructuring process. The article highlights the problem of managers of Polish hospitals who do not only struggle with financial shortages, but barely know which business model they should follow after commercialization to successfully run the restructuring process. Having examined the LMC the authors are crafting a prelude to the overall research on already commercialized hospitals to find an appropriate business model.

Corporatization, Administrative Intensity, and the Performance of Public Sector Organizations

“…Similar results are reported in studies concentrating on Foundation trusts in the English NHS (Kirkpatrick et al, 2017b). With reference to responsiveness, empirical studies analyzing public hospitals in England (Veronesi et al, 2015) and Poland (Patena and Kaszyk, 2015) find the existence of a positive relationship between corporatization and patient experience. Analogously, evidence from South Korea shows that corporatization is likely to improve customer satisfaction (Kim and Cho, 2014).…”

“…In healthcare, Lindlbauer et al (2016) show that the shift of German public hospitals from a public legal form to a private legal one has positively influenced the level of organizational efficiency. Similar conclusions about efficiency are drawn by studies focusing on corporatization of public hospitals in Portugal (Ferreira and Marques, 2015;Rego et al, 2010), Poland (Patena and Kaszyk, 2015), South Korea (Lee et al, 2008), and Sweden (Aidemark and Lindkvist, 2004). Finally, in a comparative study of 14 European healthcare systems, Andrews et al (2019) find that corporatization can lead to higher efficiency when supported by performance management systems.…”

The corporatization of healthcare organizations internationally: A scoping review of processes, impacts, and mediators

“…Other studies concentrated on medical professionalism including impact on status, identity, and involvement in reform (Aldred, 2009; Bush et al, 2009; Falkenberg, 2010; Falkenberg et al, 2009; Hunt et al, 2019; Meghani, 2011; Turner et al, 2011; Turner et al, 2016; Uddin et al, 2020; Waring & Bishop, 2013); analyzed corporatized forms in relation to their environment using contingency or institutional theory or historical analyses (Lindlbauer et al 2016; Konda et al, 2019; Farris & Marchetti, 2017); or took an organizational governance or strategy perspective (Jankura, 2014; Kirkpatrick et al, 2017a, 2017b; Lee et al, 2008). Three articles did not have a discernible theoretical perspective (Galloway, 2008; Patena & Kaszyk, 2015; Rego et al, 2010).…”

“…There was no evidence of over‐servicing and patients seemed satisfied with the quality of care, suggesting “widespread support for a variety of private and corporate practice models” (Erny‐Albrecht & Bywood, 2016, p. 1). Analyzing a Polish corporatized hospital, Patena and Kaszyk (2015) argue that financial incentives increased the hospital's profitability, employment productivity, and capital investment spending and leverage. Economies of scale in “back office” functions like IT, marketing, and contracting may also result from aggregation into larger corporatized groups (Konda et al, 2019).…”

“…Other studies concentrated on medical professionalism including impact on status, identity, and involvement in reform(Aldred, 2009;Bush et al, 2009;Falkenberg, 2010;Falkenberg et al, 2009;Hunt et al, 2019;Meghani, 2011;Turner et al, 2011;Turner et al, 2016;Uddin et al, 2020;Waring & Bishop, 2013); analyzed corporatized forms in relation to their environment using contingency or institutional theory or historical analyses(Lindlbauer et al 2016;Konda et al, 2019;Farris & Marchetti, 2017); or took an organizational governance or strategy perspective(Jankura, 2014;Kirkpatrick et al, 2017aKirkpatrick et al, , 2017bLee et al, 2008). Three articles did not have a discernible theoretical perspective(Galloway, 2008;Patena & Kaszyk, 2015;Rego et al, 2010).4.2 | Managerialism of medical work4.2.1 | ProcessesCorporatization introduces a variety of management processes for monitoring medical work. Critics suggest that corporatization often initiates a shift toward contractualized relationships and rules that have the effect of commodifying, marketizing, transacting, and managerial monitoring of care in ways that clinicians are unfamiliar with and uncomfortable(Farris & Marchetti, 2017) Waring and Bishop (2013).…”