Strategic Alliances in Healthcare: Definition & Examples

Instructor: Maya Shapland

Maya has worked in the clinical, education, and management sections of healthcare for over 25 years and holds bachelor's degree in Speech and associate degree in Nursing.

Rapid change in healthcare is causing a movement toward strategic alliances between healthcare providers. This lesson will describe the process, along with challenges and successes in these important partnerships.

Healthcare Alliances

You might wonder what keeps healthcare leadership up at night, and most of them will tell you, 'it's about the survival of healthcare systems in transition.' Daniel is the CEO of a complex physician practice and hospital. The demands for satisfied patients, staff, and payors keep the leadership engaged in a balancing act to win the hearts and minds of consumers who have many choices where they will receive healthcare.

Fragmentation of healthcare looks like a puzzle that has many pieces, that are on the same table without really connecting and completing a picture. One of the ways healthcare is increasing its survival rates is to partner with others in the community, or the region, to become stronger. This is called strategic alliances, which bring together those who can help one another and thereby, help the patients. The main factors leading strategic alliances in healthcare are: need to manage costs, obtain a competitive edge, care for the uninsured, and provide care for an increasingly aged population with many diseases.

Daniel and his counterpart at a rural hospital 30 miles away are merging their hospitals, board of directors, benefit packages, human resources, and technology to strengthen the care to their communities. Competitors are coming together to blend strengths and fill the gaps, as not one hospital can stand alone in this financial climate.

Daniel, the other CEO, and the boards at both facilities have successfully integrated services between the two hospitals by:

  • Connecting physician offices with the hospital for greater management of supplies, services, and personnel.
  • Combining buying power for materials and supplies needed for both physician and hospital providers.
  • Combining financial strength to purchase information technology for billing, electronic medical records, and more.
  • Each hospital will combine management support to guide the process of change and redesign previous methods of staffing for greater efficiency.
  • Standardization of policies and procedures, protocols, and electronic medical records

Challenges in Strategic Alliances

In the partnership in Daniel's region, challenges that will arise before and during the transition into the alliance must be clearly defined. Knowing the potential risks and weak points can prevent a disaster in the future.

Challenges Possible Solutions
Transition chaos Early communication of the clearly-stated goals
Weak organizational structure Defined management roles and support
Inequality in partnerships Take time to know the culture of the partners
Lack of cooperation Fully disclose goals and methods to achieve prior to alliance
Losses of personnel and services Maintain clear communication of goals and value added for the staff and the health of the organization

This is just a snapshot of the major challenges facing Daniel: One of his partners is a physician group who has not fully come on board due to lack of trust. One of the most valuable tools Daniel has for this group is building a relationship, listening to their concerns, and being truthful with the information he is giving the physicians and practice managers. Daniel has recognized that this is like turning a huge ship in the Atlantic Ocean in the middle of a hurricane. It will take time and skill to inspire and guide these alliances through the storm.

Successful Strategic Alliances

Finding the place where a successful alliance has occurred gives us a picture of the what is possible when groups of people become united in purpose, and are willing to let go of the need to compete. Daniel's underlying personality is competitive, but allowing the expansion of goals to include partners for success can make this easier for him and those he leads.

The process of aligning with others takes time and each phase of the journey has mile markers to measure success. From the very beginning, communication of the vision for the alignment is extremely important. Crisis of change drives organizations to find solutions for survival. Getting as many partners to agree on as many points as possible will help steer the organizations to a healthy maturity. Transition is the path for organizational change and requires management support to achieve. This is a vulnerable phase as managers must lead change. Maturity begins to form as the new partnerships take shape, then the future can be charted with the partnerships, becoming more interdependent.

Process of Strategic Alliances
Process of Strategic alliances

Here are some of the road signs of success:

To unlock this lesson you must be a Member.
Create your account

Register to view this lesson

Are you a student or a teacher?

Unlock Your Education

See for yourself why 30 million people use

Become a member and start learning now.
Become a Member  Back
What teachers are saying about
Try it risk-free for 30 days

Earning College Credit

Did you know… We have over 200 college courses that prepare you to earn credit by exam that is accepted by over 1,500 colleges and universities. You can test out of the first two years of college and save thousands off your degree. Anyone can earn credit-by-exam regardless of age or education level.

To learn more, visit our Earning Credit Page

Transferring credit to the school of your choice

Not sure what college you want to attend yet? has thousands of articles about every imaginable degree, area of study and career path that can help you find the school that's right for you.

Create an account to start this course today
Try it risk-free for 30 days!
Create an account