The number of hospital providers in the USA is shrinking and the market is becoming increasingly competitive. Many financially challenged hospital institutions are searching for a better way to compete. Contends that strategic alliances offer many attractive solutions for hospital management which include: scale economies, relative low cost for risk sharing and improved efficiency. Argues that the future of alliances focuses on capitation, quality information systems for co‐ordination, and the continuum of care which a strategic alliance can provide to a community.
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