Journal of Health and Social Behavior , Vol. 45 (Extra Issue): 118-135
Douglas R. Wholey, Jon B. Christianson, Debra A. Draper, Cara S. Lesser, Lawton R. Burns
Over the last 25 years, national Health Maintenance Organization (HMO) and
hospital firms attempted to enter local markes, either by acquiring formerly
independent, locally based HMOs and hospitals or by directly entering local
markets. While national HMOs have been relatively successful, national hospital
firms have had much less success. This paper explores the reasons for this difference.
It reviews changes in presence of national HMO and hospital firms in markets,
discusses common conceptual lenses through which national entry into local markets
typically has been viewed, and shows how social network theory can be used to
develop a better understanding of why the entry experience of national HMO and
hospital firms varies across markets. The paper concludes with a research agenda
that addresses issues raised by social network theory and its implications to
national firm entry into local markets.
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