EFFECTS OF PATIENT RELATIONSHIP MANAGEMENT AS A STRATEGIC INTENT ON THE COMPETITIVENESS OF SELECTED PUBLIC HEALTH INSTITUTIONS IN KILIFI COUNTY
EFFECTS OF PATIENT RELATIONSHIP MANAGEMENT AS A STRATEGIC INTENT ON THE COMPETITIVENESS OF SELECTED PUBLIC HEALTH INSTITUTIONS IN KILIFI COUNTY, KENYA
A PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT FOR THE REQUIREMENTS OF MASTER OF BUSINESS ADMINISTRATION DEGREE, SCHOOL OF BUSINESS, THE UNIVERSITY OF NAIROBI
TABLE OF CONTENTS TOC o “1-3” h z u TABLE OF CONTENTS PAGEREF _Toc523780612 h iiLIST OF TABLES PAGEREF _Toc523780613 h ivLIST OF FIGURES PAGEREF _Toc523780614 h vABBREVIATIONS AND ACRONYMS PAGEREF _Toc523780615 h viCHAPTER ONE: INTRODUCTION PAGEREF _Toc523780616 h 71.1 Background to the Study PAGEREF _Toc523780617 h 71.1.1Relationship Management PAGEREF _Toc523780618 h 81.1.2Strategic Intent PAGEREF _Toc523780619 h 91.1.3Firm Competitiveness PAGEREF _Toc523780620 h 91.1.4Health Sector Overview PAGEREF _Toc523780621 h 101.2Research Problem PAGEREF _Toc523780622 h 111.3General Objective PAGEREF _Toc523780623 h 121.4Objectives of the Study PAGEREF _Toc523780624 h 121.5Study Hypothesis PAGEREF _Toc523780625 h 131. 6Value of the Study PAGEREF _Toc523780626 h 13CHAPTER TWO: LITERATURE REVIEW PAGEREF _Toc523780627 h 142.1Introduction PAGEREF _Toc523780628 h 142.2Theoretical Foundation of the Study PAGEREF _Toc523780629 h 142.2.1The Social Exchange Theory PAGEREF _Toc523780630 h 142.2.2The Theory of Competitive Advantage PAGEREF _Toc523780631 h 162.3Empirical Literature Review PAGEREF _Toc523780632 h 202.3.1 Patient Relationship Management (PRM) PAGEREF _Toc523780633 h 202.3.2 Key Aspects of Patient Relationship Management (PRM) PAGEREF _Toc523780634 h 222.3.3Benefits of Patient Relationship Management in the Health Care Industry PAGEREF _Toc523780635 h 232.4Summary ; Knowledge Gap PAGEREF _Toc523780636 h 242.5Conceptual Framework PAGEREF _Toc523780637 h 26CHAPTER THREE: RESEARCH METHODOLOGY PAGEREF _Toc523780638 h 273.1Introduction PAGEREF _Toc523780639 h 273.2Research Design PAGEREF _Toc523780640 h 273.3Population of Study PAGEREF _Toc523780641 h 273.4Data Collection PAGEREF _Toc523780642 h 283.5Data Analysis PAGEREF _Toc523780643 h 28REFERENCES PAGEREF _Toc523780644 h 29APPENDICES PAGEREF _Toc523780645 h 35Appendix 1: Questionnaire PAGEREF _Toc523780646 h 35Appendix 2: List of Selected Health Institutions in Kilifi County, Kenya PAGEREF _Toc523780647 h 36
LIST OF TABLES
LIST OF FIGURES TOC h z c “Figure” Figure 1: Conceptual Framework …………………………………………………………… 10
ABBREVIATIONS AND ACRONYMSCBVCapability Based View
CRMCustomer Relationship Management
GDPGross Domestic Product
GOKGovernment of Kenya
HCOHealth Care Organization
HSRS Health Sector Reform Secretariat
KHPFKenya Health Policy Framework
KBVKnowledge Based View
KEPHKenya Essential Package for Health
MBVMarket Based View
MOHMinistry of Health
MRC Ministerial Reform Committee
NHSNational Health Services
NHSSP National Health Sector Strategic Plan
PRMPatient Relationship Management
RBVResource Based View
USDUnited States Dollar
VBCValue based Care
WHOWorld Health Organization
CHAPTER ONE: INTRODUCTION1.1 Background to the StudyPatient Relationship Management (PRM) stems out from the concept of customer relationship management (CRM). CRM has its roots in relationship marketing where organizations use a combination of marketing, communication and service approaches to identify individual customers and create relationships between the customers and the company (Kohli, Piontek et al, 2001). Tiwana (2002) state that ‘customer relationship management is a combination of business processes and technology that seeks to understand a company’s customers from multiple perspectives to competitively differentiate a company’s products and services.’ The need for customer relationship management arose when organizations realized that it was cheaper to retain existing customers than acquire new ones (Benanti, 1998). From a theoretical perspective, the relevance of relationship marketing in health care has been widely recognized (Cassidy 2009; Dunn ; Thomas 2009; Narduetal 2010;) discussed the relevance of relationship marketing programs, integrated marketing communication strategy and data base marketing for developing a favorable image leading to improved hospital performance.
This study will be based on theoretical concepts that will guide the design, methodology and the procedures that will be applied in the study. The theories that will be used to guide this study include social exchange theory (Homans, 1958) and competitive advantage theory (Porter, 1985). The social exchange theory posits that every human being considers the cost and the benefit of any offering before deciding to use the product or service on offer. Further the theory also indicates that to arrive at a decision, a customer weighs the value provided by the product or service and compares this to what other competing firms in the society are offering. The theory of competitive advantage depicts that an organization can become competitive in the market place by having unique resources, innovation, unique processes or unique knowledge and value proposition that other organizations do not have. This theory will be applied in the study to illustrate how employees in hospitals and the ability of the hospital to deal with its clients through patient relationship management can affect hospital competitiveness and have better performance than its competition.
In healthcare, where patients are the hospitals’ key customers, the term patient relationship management (PRM) is used in place of CRM. With PRM, healthcare organizations’ focus is set on determining and meeting patients’ needs (Siau, 2003). In the business world, CRM is used to retain customer loyalty to increase revenue. This loyalty usually benefits the customer because of associated low prices and quality customer service. Healthcare organizations have all the potential to build the same kind of relationship with patients and it can offer more tangible benefits too. Raisinghani et al (2005) contends that in many hospitals management strategies have changed, and that hospitals and physicians are communicating in a more detailed manner with patients. The patients’ portraits have also evolved, and patients can easily find instructions for their treatment from the Web. When hospitals provide real-time information and disseminate it to their current and potential patients it will help them to stay in touch with people as well as compete with other healthcare organizations for customers. Hospital management strategies should consider comprehensive, efficient hospital information systems which support a shift of focus to patients. With the idea of PRM, hospitals may be able to move on towards more customer-centric operations than before hence creating competitive advantage.
1.1.1Relationship ManagementPatient relationship management (PRM) is broadly defined as using multiple modes of outreach to help patients manage their health and coordinate their care in a disjointed care delivery system, all while living their daily lives. As payer and provider, business models and technology strategies continue to converge under value-based care (VBC), PRM will shift from a task managed solely by provider organizations to a collaborative effort that involves providers, payers, and any third parties working on their behalf. Numerous market scan reports examine the market forces driving health care organization (HCO) interest in solutions that promise more targeted patient outreach, coordinated care management, and greater opportunity for patient self-management between care episodes.
Patient engagement has come a long way for those organizations looking to move beyond early models of the patient portal propped up by meaningful use – but it still has a long way to go. The arrangement in relationship management is broadly classified into three types of relationship marketing practices, namely; Programs that are aimed at customer retention, Programs that involve special supply and delivery arrangements with other health care providers and key suppliers, and relational partnering programs to leverage the resources of others. Customers retention programs may include such activities as after marketing ; post treatment satisfaction services, frequent user benefits, patient focused care programs, data base maintenance, support for ongoing relationship with customers.
Strategic IntentPorter (2010), describes strategic intent as a readily grasped declaration of the course that the management of a business plans on taking the company in over some future time frame. The strategic intent of a business needs to be easily understood by every member of the firm so that all staff can be working toward a consistent overall goal. Strategic Intent can be understood as the philosophical base of strategic management process. It implies the purpose, which an organization endeavor of achieving. It is a statement that provides a perspective of the means, which will lead the organization, reach the vision in the long run. Strategic intent can provide a sense of direction, a point of view about the long-term market or competitive position the organization hopes to develop and occupy. It can provide a sense of discovery in that it holds out to the organization’s members the promise of learning about other organizations that operate in the same market, adopting their best practices and avoiding pitfalls. Strategic intent also provides a sense of destiny, a worthwhile goal around which energies can be focused across the organization. As a strategic intent, the importance of front end planning has been recognized for a long time, but development in this area has been much slower than development of tactics for the execution phase in general healthcare management.
1.1.3Firm CompetitivenessCompetitiveness refers to the ability of an economic unit (a firm, an industry, a region or a country) to compete with rivals. It is associated with rivalry between economic units over markets or access to human and material resources and technology. An important characteristic of competitiveness is its dynamic nature. Sources of competitiveness are not perpetual; sooner or later, rivals come up with better ways of doing things. Thus, economic agents can sustain their competitiveness only by making continuous improvements in their behavior.
Competitiveness is most commonly defined at the firm-level. In the terminology of Buckley et al. (1988), a firm is competitive if it can produce products of better quality and lower costs than its rivals. At this level, competitiveness is synonymous with a firm’s long run profit performance and its ability to compensate its employees while providing superior returns to its owners. Hence, at the firm level competitiveness encompasses three dimensions: the cost efficiency, quality and relative performance. Numerous variations of this definition exist in the literature. For Porter (1985), the competitiveness of the firm is the ability to employ all available resources, that is, internal characteristics, socio-cultural, institutional, economic and technological factors in its environment, in a way that is superior to its rivals. In a similar vein, Ernst (2004) defines firm’s competitiveness in terms of its productivity. A firm is said to be competitive if it can convert its resources into value more efficiently than its rivals. Finally, in the context of international trade, Buckley et al. (1988) define the competitiveness of a firm as its ability to deliver goods which will stand the test of international markets.
Health Sector OverviewIn 1994, the Government of Kenya (GOK) approved the Kenya Health Policy Framework (KHPF) as a blueprint for developing and managing health services. It spells out the long-term strategic imperatives and the agenda for Kenya’s health sector. To operationalize the document, the Ministry of Health (MOH) developed the Kenya Health Policy Framework Implementation Action Plan and established the Health Sector Reform Secretariat (HSRS) in 2013 under a Ministerial Reform Committee (MRC) in 1997 to spearhead and oversee the implementation process. The above policy initiatives aimed at responding to the following constraints: decline in health sector expenditure, inefficient utilization of resources, centralized decision making, inequitable management information systems, outdated health laws, inadequate management skills at the district level, worsening poverty levels, increasing burden of disease, and rapid population growth.
Kenya has set the stage for major improvements in its health care sector by creating a long-term development plan called Vision 2030 to transform the country into a middle-income economy. The development of the first National Health Sector Strategic Plan (NHSSP-I) for the period 1999-2004 was a follow-up to the Ministry of Health’s efforts to translate the policy objectives into an implementable programme (MOH, 1999).
Kenya’s health policy is based on goals outlined in Vision 2030. Kenya’s health sector is expected to grow at a faster rate than the overall economy. This sector is valued at USD 2.2 billion and contributes 2% to the country’s GDP. This growth is possible because: Life expectancy has increased to 6% in the last 10 years, Population is growing at a rate of around 2.7% annually, the country’s GDP has grown economically at a rate of 6% in 2015, There are growing trends in non-communicable and communicable diseases and, there is more urbanization as well as awareness of preventative health care.
The health sector comprises the public system, with major players including the Ministry of Health (MOH), County government departments of health, Parastatal organizations, and the private sector, which includes private for-profit, NGO, and FBO facilities. Health services are provided through a network of over 6,600 health facilities countrywide, with the public sector system accounting for about 51 percent of these facilities. The public health system consists of the following levels of care of health facilities: national referral hospitals, provincial general hospitals, district hospitals, health centers, and dispensaries.
1.2Research ProblemThe healthcare institutions are plagued with various challenges that cause customer dissatisfaction (Gopal & Beedi, 2014). The emergence of cut throat competition in the private health sector increases the need for a public health care provider to satisfy customer needs to enhance satisfaction and loyalty. The existing public healthcare service providers therefore need to improve their performance on both financial and non-financial measures to cope with competition. Delivering customer satisfaction is also imperative because today’s buyers of health care services are better educated and more aware than in the past. Increasing the patient satisfaction and developing the loyalty is the core goals of health industries. A health organization which is established with discrepancies and faults would not be successful in developing and maintaining firm relationship with the patients. Patients will put trust to the World Health Organizations (WHO) to provide perfect and precise information about their health status and the evolution of their health. As a result, patient will not tolerate any mistake in medical information just because of huge amount of data and scarcity of discipline, (Moody 2011). Thereby, PRM will be an effective tool to provide health industries with information in Strategic planning, consulting services, relationship establishment, Physician, Campaign management, structure of data warehouse, predictive categorization and relationship strategies.
Brand and Collins (2010) developed a model for the formulation of strategic intent based on a comparison of business and the military to show how Strategic intent plays an important role in strategy formulation and is a concept that can be used to realize competitive advantage. The study focused on strategic intent formulation hence the need to introduce PRM on the execution of strategic intent for competitiveness. Mariadoss et al., (2014) on the other hand studied the relationship of Strategic intent and performance and looked at the role of resource allocation and noted the indirect effect of strategic intent on performance. The research was done in manufacturing firms only and ignored the service industry. This research focuses on public health facilities which are service oriented.
According to Matias (2012) previous experience reveals a slow pace of service delivery in Public Hospitals which was not witnessed in other categories of the hospitals. A delay in offering services, frequent disputes between management and staff in relation to delayed payment of dues, inadequate working equipment and poor work environment formed part of disruptions of service delivery. These disruptions were not witnessed in private facilities as their operations were smoother and the process from admission to discharge had very minimal disruptions. Based on this realization, the present study seeks to find out the effects of patient relationship management as a strategic intent on competitiveness of Kenyan public healthcare providers.
1.3General ObjectiveThe General objective of the study will be to find out the link between strategic intent of PRM to competitiveness in Kenyan public healthcare providers at level 3 and 4.
1.4Objectives of the StudyThe study will be guided by the following objectives;
i. To investigate the nature and scope of patient relationship management in public health institutions in Kilifi County, Kenya.
ii. To establish health workers perception towards patient relationship management in public health institutions in Kilifi County, Kenya
iii. To establish the quality of patient relationship management in health institutions in Kilifi County, Kenya
iv. To find out the effects of implementation of patient relationship management programmes in public health institutions in Kilifi County, Kenya
1.5Study HypothesisThe study will be guided by the following study hypothesis.
Ho1: Operational Component of PRM has no significant effect on competitiveness in health institutions in Kilifi County, Kenya.
Ho2: Analytical Component of PRM has no significant influence on competitiveness in health institutions in Kilifi County, Kenya.
1. 6Value of the StudyThis study will be initiated in order to find out effects of patient relationship management as a strategic intent on Kenyan public health institutions competitiveness. This study will enrich the body of knowledge on patient relationship management as a strategic intent for competitiveness. Two theories (exchange theory Homans, (1958) and competitive advantage theory Porter, (1985) will significantly be used to help explore the relationship between PRM and competitiveness.
The findings of this study are expected to increase understanding and improve existing academic knowledge regarding PRM and competitiveness in health institutions. Policymakers and health practitioners will also find the information useful in developing policies and procedures that guide this health process. The findings will provide proper guiding framework for the development of PRM infrastructures that will ensure quality service delivery to patients and clients in the health sector.
The practical contributions of this study are envisaged from the perspective that PRM Service quality and Patient satisfaction are inter related concepts. With the help of PRM it is possible to avoid the outbreak of new disease, improve the service quality and saving the time in process of care services which they result in increased patient satisfaction. Data mining on patient satisfaction questionnaire is an efficient way to find the main problem and obstacles in front of patient satisfaction. The findings of this study will enable relevant stake holders to find a solution in order to alleviate the situation and increase patient satisfaction.
CHAPTER TWO: LITERATURE REVIEW2.1IntroductionChapter two of this study comprises of the empirical review. Orodho and Kombo (2002), are of the opinion that the main purpose of literature review is to give an account of what has been studied in relation to the research problem at hand. This chapter reviews various literature, policy documents and journals that exist on the research problem. It concentrates on patient relationship as a strategic intent to competitiveness.
2.2Theoretical Foundation of the StudyThis study will be based on theoretical concepts that will guide the design, methodology and the procedures that will be applied in the study. The theories that will be used to guide this study include social exchange theory (Homans, 1958) and competitive advantage theory (Porter, 2010).
2.2.1The Social Exchange Theory
The social exchange theory posits that every human being considers the cost and the benefit of any offering before deciding to use the product or service on offer. Further the theory also indicates that to arrive at a decision, a customer weighs the value provided by the product or service and compares this to what other competing firms in the society are offering. Social exchange theory is a social psychological and sociological perspective that explains social change and stability as a process of negotiated exchanges between parties. Social exchange theory posits that human relationships are formed by the use of a subjective cost-benefit analysis and the comparison of alternatives. The theory has roots in economics, psychology and sociology. Social exchange theory features many of the main assumptions found in rational choice theory and structuralism. It is also used quite frequently in the business world to imply a two-sided, mutually contingent and rewarding process involving transactions or simply exchange.
Social exchange theory attempts to explain the non-economic aspect of social behavior (Emerson 2010). According to Heckathorn (2013), one of the theory’s objectives is to overcome the problems arising from the purely rational models of decision-making by arguing that an exchange process will induce social behaviour.
Among the first authors to differentiate between economic and social exchange was Blau (2011). In his “Interaction: social exchange” he asserts that within both economic and social exchange, expectations of some future returns for contributions made are implicit. Within social exchange, the nature of returns is not specified, and neither does exchange occur on a calculated or quid for quo basis. Economic and social exchange differ in their content, the strength of the obligation and the endurance of the relationship. Economic exchange is based on the transaction occurring within a given time frame and of specified and exact content and where both parties are able to calculate the potential benefits. The social exchange approach, on the other hand, attempts to overcome the problems arising from the purely rational models of decision-making (Heckathorn 2013) focusing on the movement of resources through a social process (Blau 2011; Emerson 2010).
Social exchange is the economic analysis of the non-economic social situation (Emerson 2010), where economic action is rooted within such social relations that serve as a balance between one’s pursuit of self-interest gain and motivation for sustainable relationship development (Granovetter 2008). The exchange process will induce a social behavior in that people respond in a positive manner to rewards, and negatively to costs (Homans 2010). Over time relationships developed from such exchange, and they evolve into trusting, loyal and mutual commitments (Cropanzano and Mitchell 2005). Exchange in such relationships does not assume a given time bounded period as it relies on the trust between the parties involved in such exchange, and not legal obligations, that the obligations arising from the exchange will be fulfilled in the long run; i.e., at some point in the future time. Such exchanges are more flexible and seldom involve explicit bargaining (Stafford 2008).
For a social exchange to occur, certain conditions need to be fulfilled. Kotler (1984) brings forward several conditions: at least two separate entities must be involved; each entity must possess and be able to offer something of value to another entity; they must be capable of communicating and delivering the offer; the entities must be free in being able to accept or reject the offer; and both must consider the exchange with the other appropriate. A successful exchange is one in which the value received corresponds to the value previously stipulated as the terms of the exchange.
According to West and Turner (2010) the following assumptions regarding human nature precede the social exchange: humans strive for rewards and evade punishments; humans are rational beings, and the standards humans use for evaluating the rewards and costs of the exchange relationship will change over time and will differ from one person to another.
The norms of reciprocity and mutual attraction are central premises on which the social exchange relationships are predicated (e.g., Gouldner 2008; Emerson 2010). Mutual reciprocation as the most basic form of human interaction (Homans 2010), reflects the general process established in the exchange relationship. The fundamental principle of reciprocity lies in the felt obligations and the expectations of returns resulting from the exchanges between parties involved in such exchange (Gouldner 2008; Chen et al. 2009). The process of reciprocity represents a mechanism by which the social interactions are initiated and maintained in such a way that an initial action of giving by one party will cause the reaction in the other party in the form of a sense of future obligation to reciprocate the benefit or favor (Gouldner 2008).
Embedded within the norm of reciprocity is the ‘division of labor’ component. This implies that one party will reciprocate to the other goods and services that are perceived as valuable by the receiver and is within the capability of the donor to give (Gouldner 2008). Within inter-organizational research, the vast majority of literature assumes, either implicitly or explicitly, that relationships are developed and maintained on the basis of mutual reciprocity (Nevin 1995). For example, cooperation and coordination between organizations is rooted in the motivations for reciprocity. The object of such exchange represents another crucial element of social exchange theory: the resources exchanged. Social exchange theory focuses on the movement of resources through a social process, where the flow of such resources will be maintained provided valued returns are secured (Emerson 2010).
2.2.2The Theory of Competitive Advantage
The theory depicts that an organization can become competitive in the market place by having unique resources, innovation, unique processes or unique knowledge and value proposition that other organizations do not have. This theory will be applied in the study to illustrate how employees in hospitals and the ability of the hospital to deal with its clients through patient relationship management has the ability to make the hospital competitive and have better performance than its competition. The theory is grounded on four concepts namely; Market-Based View (MBV), Resource Based View (RBV), The Knowledge-Based view (KBV) and, Capability Based View (CBV).
The Market-Based View (MBV) of strategy argues that industry factors and external market orientation are the primary determinants of firm performance (Porter, 2010). Bain’s (2009) Structure-Conduct-Performance (SCP) framework and Porter’s (1980) five forces model are two of the best-known theories in this category. The sources of value for the firm are embedded in the competitive situation characterizing its end-product strategic position. The strategic position is a firm’s unique set of activities that are different from their rivals. Alternatively, the strategic position of a firm is defined by how it performs similar activities to other firms, but in very different ways. In this perspective, a firm’s profitability or performance are determined solely by the structure and competitive dynamics of the industry within which it operates (Schendel 1994).
The Market-Based View (MBV) includes the positioning school of theories of strategy and theories developed in the industrial organization economics phase of Hoskisson’s account of the development of strategic thinking (Porter, 2010). During this phase, the focus was on the firm’s environment and external factors. Researchers observed that the firm’s performance was significantly dependent on the industry environment. They viewed strategy in the context of the industry as a whole and the position of the firm in the market relative to its competitors. Bain (2009) proposed the Industrial Organization paradigm, also known as the Structure-Conduct-Performance (SCP) paradigm. It describes the relationship of how industry structure affects firm behavior (conduct) and ultimately firm performance.
The resource-based view of the firm (RBV) draws attention to the firm’s internal environment as a driver for competitive advantage and emphasizes the resources that firms have developed to compete in the environment. During the early strategy development phase of Hoskisson’s account of the development of strategic thinking (Hoskisson et al. 2011), the focus was on the internal factors of the firm. Researchers such as Ansoff (1965) and Chandler (1962) made important contributions towards developing the Resource-Based View of strategy (Hoskisson et al. 2011). From the 1980s onwards, according to Furrer et al. (2008), the focus of inquiry changed from the structure of the industry, e.g., Structure-Conduct-Performance (SCP) paradigm and the five forces model) to the firm’s internal structure, with resources and capabilities (the key elements of the Resource-Based View (RBV). Since then, the resource-based view of strategy (RBV) has emerged as a popular theory of competitive advantage (Furrer et al. 2008).
The origins of the RBV go back to Penrose (1959), who suggested that the resources possessed, deployed and used by the organization are really more important than industry structure. The term ‘resource-based view’ was coined much later by Wernerfelt (2011), who viewed the firm as a bundle of assets or resources which are tied semi-permanently to the firm (Wernerfelt 2011). Prahalad and Hamel (1990) established the notion of core competencies, which focus attention on a critical category of resource – a firm’s capabilities. Barney (2006) also argued that the resources of a firm are its primary source of competitive advantage. According to Ramos-Rodríguez and Ruíz-Navarro’s (2004) bibliometric study of the Strategic Management Journal over the years 1980–2000, the most prominent contribution to the discipline of strategic management was the Resource-Based View of strategy. In addition, the papers written by Wernerfelt (2011) and Barney (2006) are the two most influential articles in strategic management research (Ramos-Rodríguez ; Ruíz-Navarro 2004).
Early researchers simply classified firms’ resources into three categories: physical, monetary, and human (Ansoff, 1965). These evolved into more detailed descriptions of organizational resources (skills and knowledge) and technology (technical know-how) (Hofer & Schendel 1978). Amit and Shoemaker (1993) proposed an alternative taxonomy involving physical, human and technological resources and capabilities.
In regard to The Knowledge-Based View, while most researchers subscribing to the RBV regard knowledge as a generic resource, some researchers (Murray 2000) suggest that knowledge has special characteristics that make it the most important and valuable resource. Hamel and Prahalad (1994) argue that knowledge, know-how, intellectual assets and competencies are the main drivers of superior performance in the information age. Evans (2003) and Tiwana (2002) also suggest that knowledge is the most important resource of a firm. Evans (2003) pointed out that material resources decrease when used in the firm, while knowledge assets increase with use.
Tiwana (2002) argued that technology, capital, market share or product sources are easier to copy by other firms while knowledge is the only resource that is difficult to imitate. Grant (2013) argued that there are two types of knowledge: information and know-how. Beckmann (2011) proposed a five-level knowledge hierarchy comprising data, information, knowledge, expertise and capabilities. Zack (2011) divides organizational knowledge into three categories: core knowledge, advanced knowledge, and innovative knowledge. Core knowledge is the basic knowledge that enables a firm to survive in the market in the short-term. Advanced knowledge provides the firm with similar knowledge as its rivals and allows the firm to actively complete in the short term. Innovative knowledge gives the firm its competitive position over its rivals. The firm with innovative knowledge is able to introduce innovative products or services, potentially helping it become a market leader (Zack 2011).
Grant (1991) argued that capabilities are the source of competitive advantage while resources are the source of capabilities. Amit and Shoemaker (1993) adopted a similar position and suggested that resources do not contribute to sustained competitive advantages for a firm, but its capabilities do. Haas and Hansen (2005), as well as Long and Vickers-Koch (1995),supported the importance of capabilities and suggest that a firm can gain competitive advantage from its ability to apply its capabilities to perform important activities within the firm. Amit and Shoemaker (1993,) defined capabilities in contrast to resources, as ‘a firm’s capacity to deploy resources, usually in combination using organizational processes, and effect a desired end. They are information-based, tangible or intangible processes that are firm-specific and developed over time through complex interactions among the firm’s resources’.
While the MBV of strategy suggests that the primary source of high returns is the bargaining power of a firm in the market, and the RBV suggests that this is the set of unique resources, capabilities and knowledge of a firm, the relational view suggests that these are the shared knowledge and complementary resources of the network. Similarly, profit preservation mechanisms in the MBV are market barriers to entry, while in the RBV these are firm-level barriers to the imitation of unique resources. In the relational view, these mechanisms include dyadic/network barriers to imitation and the scarcity of potential partners (that might prevent such a network from being replicated).
2.3Empirical Literature Review2.3.1 Patient Relationship Management (PRM)Given the commercial marketing roots of CRM, it is important to distinguish the applicability of CRM principles to PRM in both private and public health care sectors. In brief, while CRM and PRM involve similar approaches, “the goal of CRM is ultimately to increase consumer spending. Conversely, PRM strives to give patients the information they need to make better healthcare choices, which will ultimately save them and the system money”. Patient Relationship Management (PRM) also requires added consideration for handling complex data and the need to enforce airtight security and the appropriate use of patient data. (Russell & Otley 2009).
Despite the differences, commonalities between CRM and PRM enable stronger relationships that benefit from: greater anticipation of customer needs and wants, improved communication channels, timely and credible information, and the capture of tacit knowledge in essence knowing people better without wasting their time. However, the marketing tactics of commercial persuasion and manufactured demand do not directly apply in healthcare; therefore, the best ‘marketing’ goal that a private for-profit healthcare organization can hope for in “the migration of CRM to PRM is the natural evolution of building the perception. When the need arises, the promoted physician practice or hospital is there to help you.” (Wilson-Steele, 2009).
Nevertheless, ‘perception management’ also applies to public PRM in efforts to nurture relationships with a patient/provider, audience receptive to preventive, cost-saving interventions that stave off the need for expensive acute care services. Responsibility for the public purse creates an impetus for seeking these efficiencies through this form of Citizen Relationship Management—the CRM equivalent in the public realm. Driven by pressures to decrease costs, PRM in public health systems works to prevent “customer disconnects” and maintain a “360-degree view of the customer” (Phillips 2009), including functions like enhanced referral tracking and automatic reminders aimed at reducing missed appointments. According to Halpern and Bates (2010), in the
National Health Service (NHS), the cost of “did not attends” (12.5% of outpatient appointments in 2000) “is a source of increasing concern” and “impacts seriously on the health service’s ability to plan and deliver timely care” (Wanless Review 2010). This example illustrates how PRM applies practically in the public arena and could assist healthcare organizations to meet regulatory imperatives such as the UK’s Gershon(2005) Review requiring local authorities to achieve 2.5% efficiency savings each year, believed to be possible in large part through IT supported, streamlined processes.
Russell and Otley, (2009) observe that PRM introduces the principles of Customer Relationship Management (CRM) to the world of healthcare. Patient Relationship Management (PRM) is a commitment to understanding patients as individuals and then communicating relevant information to them and their caregivers using the medium they prefer. PRM is not a technology but rather a vision realized through technology; technology grants the ability to achieve more cohesion between the disparate parts of the healthcare system, which in turn improves both clinical outcomes and patient satisfaction. According to (Lewis (2010), PRM applications can help prevent additional illness. With a 360-degree view of the patient, physicians can more easily identify relationships between current symptoms and future health concerns. The applications also help improve the quality and consistency of care. Automated processes can be created to ensure critical safety procedures are followed, and that the organization is in compliance with privacy and other regulatory policies. They speed routine processes, such as admissions, referrals, and discharges. By analyzing the performance of routine processes over time, improvements can be made that eliminate unnecessary steps and increase patient satisfaction.
Russell and Otley, (2009) opine that PRM applications eliminate the time wasted accessing information. By electronically storing indexed documents, such as treatment plans, symptom-and-diagnoses relationships, and reference articles, less time is spent searching for information needed to deliver quality care. The automated proactive communications aid in viewing patient data sorted by certain characteristics, targeted proactive communications can easily be sent. For example, mailings to diabetic patients can inform them of new information, treatment options, or upcoming educational offerings. This reduces the number of missed appointments. Tasks can easily be set up to streamline appointment reminder calls. Automated processes can be put in place for follow-up and rescheduling should appointments be missed. By providing a centralized view of patient demographic information, standardizing and streamlining processes, and enabling proactive communications, a PRM system can help physicians improve their patients’ overall health. Additionally, patients will be more satisfied with the service they receive, which increases the likelihood they will make regular, preventative healthcare an ongoing priority (Bill Crounse’s, 2010).
2.3.2 Key Aspects of Patient Relationship Management (PRM)PRM orchestrates a number of methodologies in a synchronized approach to delivering healthcare. Experts caution against rapid implementation and advocate instead a deliberate sequencing of these strategies in order to achieve desired results. A crucial first step is the establishment of a system for accurately identifying ‘customers’ (patients, clinicians, etc). As Schumacher (2006) underscores, “one in 10 returning patients is not properly identified by his hospital system when he arrives for care.” He goes on explaining that integration of enterprise-wide data is crucial to improving customer service. EIM provides the integration needed to bridge operational systems (such as electronic patient records) and thus supports data integrity across the organization. This in turn enables the development of “a mission-critical data warehouse of the most valuable asset i.e. patient data.” Without a rigorous level of data integration, standardization, protection from error, and traceability, Patient Relationship Management (PRM) solutions will be stymied.
An integrated single database enables healthcare organizations to perform what Paddison (2006) describes as the ” Patient Relationship Management (PRM) closed-loop cycle”: Collect aggregate data – Analyze individual needs and preferences – Develop relevant messages based on individual needs and preferences – Deliver communications through preferred channels (direct mail, e-mail, phone, and fax) – Analyze results and refine the approach. Outcomes analysis combined with predictive modeling offer a powerful means to deliver disease management. Healthcare organizations can, by: a) predicting who is at-risk for developing certain conditions, and b) identifying of those already diagnosed who is likely to develop complications, provide preventive interventions instead of more expensive treatments that may otherwise be required for acute episodes. In this manner, according to Plocher (2009), outcomes for an entire population can be handled and improved.
This multi-layered foundation serves as the infrastructure for building a successful PRM strategy, the survival of which depends on strong change management and communication plans to ensure alignment between business needs and organizational models in support of strategic objectives (Phillips, 2009). Patient relationship management (PRM) is an overarching strategy (not just a technology) for identifying and anticipating diverse patient and clinician needs and preferences in order to tailor communications and programs accordingly. The currency for these transactions is patient data. The resulting benefits typically include improved customer service; reduce medical error, better productivity, cost savings and improved health outcomes to name a few. This report first outlines the impetus for PRM stemming from the pervasive fragmentation of healthcare delivery and supporting data, then summarizes the “nuts and bolts’ of PRM, and finally highlights how several PRM initiatives are providing valuable benefits to both patients and providers, (Halpern and Bates, 2010)
“One-to-one relationship,” “trust”, “accurate and complete information” represent ideals upon which the tenets of coordinated, timely, and accessible healthcare have always been established. Yet, the fragmentation of patient care and supporting data is not new. Russell and Otley (2009) pointed out that, in the beginning, there was the physician and the patient, whose relationship was built on trust and good communication. Itinerant doctor could offer care in only one location at a time within a limited sphere of knowledge and collaboration. Today, despite medical, technological, and communication advances that minimize professional isolation, transient and discrete healthcare encounters are common in an age of myriad health care organizations and savvy, mobile patients seeking optimal and immediate care for complicated conditions.
2.3.3Benefits of Patient Relationship Management in the Health Care IndustryAccording to Sumit Vimani, (2007), Patient PRM applications can speed routine processes, such as admissions, referrals, and discharges by analyzing the performance of routine processes over time. Improvements can be made to eliminate unnecessary steps and increase patient satisfaction. Furthermore, it can help prevent additional illness by physicians taking thorough examination of the patients all times to enable them easily identify relationships between current symptoms and future health concerns. Moreover, PRM application can eliminate time wasted accessing information by electronically storing indexed documents, such as treatment plans, symptom-and diagnoses relationships, and reference articles, less time is spent searching for information needed to deliver quality care.
The PRM can automate proactive communications by viewing patient data sorted by certain characteristics, targeted proactive communications that can easily be sent. For example, mailings to diabetic patients can inform them of new information, treatment options, or upcoming educational offerings PRM can also contribute to improve the quality and consistency of care by creating automated processes to ensure critical safety procedures are followed, and that the organization complies with privacy and other regulatory policies.
Healthcare is “characterized by complexity and fragmentation, with discrete silos of information often controlled by separate entities,” with the patient left adrift, feeling frustrated and dissatisfied, and providers “lacking a comprehensive clinical picture of the patient.” In essence, this milieu of fragmentation has rendered unwieldy data the elusive ‘ghost in the machine,’ despite best efforts in the past to leverage technology as a panacea for streamlining healthcare (Russell and Otley, (2009)). Finally, yet importantly is that PRM will reduce the number of missed appointments. Tasks can easily be set up to streamline appointment reminder calls. By putting automated processes in place for follow-up and rescheduling should appointments be missed (Sumit Vimani, 2007).
2.4Summary & Knowledge GapGeorge (2015) assert that today, there is no all-in-one solution that provides the functionality required for the next generation of consumer engagement in healthcare. The report clearly articulates how key stakeholders in the healthcare industry must work together to bring those features into a single platform that benefits all consumers regardless of age, health status, technological proficiency, or socioeconomic status. Features such as bidirectional messaging with members of an extended care team, multimedia educational resources, interactive health coaching, and integration with community and other non-clinical resources remain in silos today, creating complexity for the consumer. Overcoming this will require a broader, more open framework and technology architecture than what patient portals today can provide. This study seeks to fill in the knowledge gap pertaining to this perspective.
A Market Scan Report by Christopher (2016), examines the market forces driving health care organization (HCO) interest in solutions that promise more targeted patient outreach, coordinated care management, and greater opportunity for patient self-management between care episodes. Motivating factors include serious limitations of legacy engagement solutions to meet business case needs and consumer usability expectations. However, no study has been undertaken to address the issue on the need to support patient engagement outside the four walls of the hospital, and economic factors that range from value-based care to provider-payer convergence to higher out-of-pocket costs for patients. This study hence seeks to a bridge this knowledge gap.
Effective health care is important to individuals and nations alike. Indeed, it is a basic ingredient in the formula for a stable productive society. Today, however, there is growing concern over a looming crisis in healthcare. For example, in Kenya, which is known for extensive social programs, a recent poll found that 82% of the population was concerned about the collapse of their health system, and also, where healthcare is a perennial political issue; some 26.6 million people did not have health insurance as of 2005. Such realities are prompting a number of observers to question whether the current healthcare system is in fact sustainable. To many, the answer is no. According to Wanless D, (2010), the challenges are so complex, that healthcare systems around the world need to fundamentally change the way they do business. Without such change, projections suggest, the current system will eventually collapse. Yet studies made have not addressed the issues pertaining sustainability of the health institutions through strategic intents. This study hence seeks to address this knowledge gap.
2.5Conceptual FrameworkThe conceptual framework below shows the relationship between the independent variables (Operational Component of PRM and Analytical Component of PRM) and the effects on the health institutes competitive edge.
Independent VariablesDependent Variable
Sub-ordinate Staff Support
Sub-ordinate Staff Support
Fig 2.1 Conceptual Framework
CHAPTER THREE: RESEARCH METHODOLOGY3.1IntroductionThis chapter deals with the following aspects of the research; the research design, locale of the study, target population, sampling procedure and sample size, research instruments, validity and reliability of the research instruments, data collection procedure, data analysis and ethical considerations.
3.2Research DesignIn this study, a cross sectional survey method (Mugenda and Mugenda, 2003) will used as the design due to its suitability in data collection to answer the research questions. In this case, though, the tool will be a well-structured questionnaire. In order to investigate the effects of patient relationship management as a strategic intent on the competitiveness of selected public health institutions in Kilifi County, this particular research study will use a quantitative research. Data will be collected from the respondents by use of a questionnaire.
3.3Population of StudySince the research will be carried out in public health care facilities in Kilifi, the target population will be the healthcare professionals working in public healthcare facilities in the county. Kilifi County has a total of 298 public health care institutions. Out of the 298 public health care institutions the researcher intends to use the Kenya Essential Package for Health (KEPH) care level 3 (Health centers, maternities, and nursing homes), Level 4 (Primary hospitals) and level 5 (secondary hospital) health care institutions which are 20 in number. The study intends to gather data from the health care personnel in these health institutions. The personnel are grouped into three categories as shown on table 3.1.
Table 3.1 Study Population
Designation Population Percentage
Doctors Nurses Clinical Officers Total 100%
Since the target population will be a manageable number in a study, the research will employ a stratified random sample for the study. Hence all the healthcare professionals stratum (doctors, nurses and clinical officers), will be considered for the study. The purpose of using the study population will be to enable the research to obtain reliable and accurate information from all respondents in order to avoid bias. The questionnaire will therefore be issued to 50% respondents from each stratum.
3.4Data CollectionData from the respondents will be collected mainly by use of questionnaire method. The questionnaire will have both open ended and closed questions. In this study a questionnaire will be chosen as the method of collecting data for it is easier to administer and analyze the data collected from the field. The researcher will personally administer the questionnaires and collect them upon completion.
3.5Data AnalysisOnce the questionnaires are collected, they will be scrutinized to ensure they are duly completed and are consistent, after which they will be coded. This will be followed by checking that all items are answered according to instructions to reduce errors and maintain the validity of the data. Qualitative data will be analyzed by descriptive statistics, using measures of central tendency and measures of dispersion as the tools of data analysis. The arithmetic mean will be used as the measure of central tendency statistical tool that will be used for data analysis while the standard deviation will be used as the measure of dispersion statistical tool of data analysis. Quantitative data will be analyzed by relational statistics, using Pearson’s coefficient of correlation to draw out the strength of relationship between the independent variables and dependent variable.
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APPENDICESAppendix 1: Questionnaire
Appendix 2: List of Selected Health Institutions in Kilifi County, KenyaBamba Sub-County Hospital
Chasimba Health Centre
Chilodi CrossFit Health Centre
Ganze Health Centre
Gede Health Centre
Gongoni Health Centre
Jibana Sub District Hospital
Jila Model Health Centre
Kilifi County Hospital
Kizingo Health Centre
Malindi District Hospital
Marafa Health Centre
Mariakani District Hospital
Matsangoni Model Health Centre
Mtwapa Health Centre
Muyeye Health Centre (Municipal)
Rabai Rural Health Demonstration Centre
Rainbow Community Care
Vipingo Rural Demonstration Health Centre
Vitengeni Health Centre