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Now we are much more dependent upon other facilities to be an extension of our care. People leave sicker and quicker. We need to have some level of competency on the other side. Historically we've been possessive with our patients. That's been an impediment. We think we do it best. It's our pride. But you can't do it that way. You have to give your trust over to the next setting.

Thus far in this book, we have learned a great deal about how healthcare organizations can improve coordination across care provider functions. We have described a high performance work system that helps to build strong networks of relational coordination between doctors, nurses, therapists, social workers, and case managers. To the extent that this high performance work system focuses only on building coordination within a single organization, however, its impact will not be sufficient to address current industry challenges.

As organizations vertically disintegrate and outsource services that once were produced internally, coordination across organizational boundaries has become increasingly important for achieving desired performance outcomes. Because market mechanisms are often insufficient for coordinating interdependencies, organizations must design and invest in mechanisms for managing cross-organizational relationships.180 Management scholar Rosabeth Kanter has argued that pressures for cross-organizational coordination are reshaping the world of business and requiring new capabilities for business success.181 Supply partnerships can add value by providing a more coherent, seamless experience for the customer while minimizing wasted time and resources, creating a competitive advantage for both partners in the supply partnership, as we have seen in both the auto industry and the apparel industry.182 Russell Johnston and Paul Lawrence have called these partnerships value-adding partnerships, arguing that companies engaged in these partnerships have advantages over companies that try to negotiate with one another in the absence of a partnership, and that they also have advantages over vertically integrated companies that bring all activities in house.183 Value-adding partnerships are "a set of independent companies that work closely together to manage the flow of goods and services along the entire value-added chain." These partnerships allow each party to focus on what it does best while generating better outcomes than either party could achieve in a more traditional supplier relationship.

Healthcare organizations and their customers can benefit enormously from supply partnerships. As a result of shorter lengths of stay enforced by payers, patients have been leaving hospitals in a more vulnerable condition. Patients therefore are increasingly likely to receive follow-up care in other settings, such as rehabilitation hospitals and skilled nursing facilities, or at home with the help of home care providers. As more care is provided outside the hospital, other healthcare organizations have begun to play an increasingly important role in the healthcare value chain. It is therefore critical for healthcare organizations to take the relational coordination that they have achieved internally and extend it beyond their own walls to coordinate ...

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