Are Focused Factories the Wave of the Future?

Spring 2000
Frontiers of Health Services Management , vol.16, no.3 (Spring 2000): 41-46
Paul B. Ginsburg

ill the health care system of the future have focused factories (defined as the use of management systems and information on effectiveness) at its core? The author says that this question has two elements: 1) the extent to which the concept is applicable to the delivery of health care, i.e., its potential to improve care; and 2) the likelihood of the concept to reach its future potential, i.e., the extent to which health care market dynamics and public policy will impede development and success of the concept.

Health care used to be insulated from broader economic forces, which made its strategies distinct from those in other sectors. Now, price competition makes it imperative to incorporate the paradigm of focused factories into its operations. The author provides several examples of how this could work, and discusses the limitations of the focused factory concept. First is the backlash against managed care in that consumers are now demanding a broad choice of providers within managed care products. Second, limitations of reimbursement would make it difficult for health care organizations to obtain a return on their investment in management systems. Third, resistance from existing providers of care will pose a competitive threat.

This article was published by Frontiers of Health Services Management. (Not available online.)