Strategic management as adaptation to changes in the ecosystems of public hospitals in Israel

BACKGROUND: Health systems worldwide function in constantly changing local and global ecosystems. This is the result of economic, demographic, and technological changes, among others. In recent decades Israel has started implementing reforms in the public health services that have led to far-reaching changes in the health system, and consequently, increased competition within it. The impact of these changes has been exacerbated by pressure to reduce per capita public health costs, coupled with increased demand and greater health awareness. All these changes have created a turbulent environment for healthcare organizations in Israel. To cope with this dynamic environment, various parts of the system have had to adopt appropriate management behaviors and business styles. This study, carried out in six public hospitals in Israel, evaluates the nature and degree of adaptation, implementation, and inculcation of management strategies in public hospitals in Israel, using the Ginter model of strategic management of health organizations. METHODS: The study used semi-structured in-depth interviews of key figures in the health system and managers at various levels in the hospitals and HMOs included in the sample. The 55 interviews, conducted in two time periods, were analyzed in accordance with an established theory of qualitative methodological analysis. RESULTS: The main findings are that the health market and hospitals in Israel are increasingly adopting competitive business behaviors. But strategic managerial behavior has been adopted only in part, and there is a lack of collaboration between staff and management in defining goals and strategic activity. These are obstacles to change and inculcation of the strategy in hospitals. CONCLUSIONS: This study affords an important view over time and a better understanding of the behavior and adaptation of hospitals in Israel to their constantly changing surroundings. Adapting and inculcating appropriate managerial strategies in hospitals requires close collaboration between staff and management; its absence is an obstacle that contributes to partial, and possibly counter-productive, strategic behavior. The solution may lie in a combination of changes: providing hospital management with the necessary tools and broad professional support by the Ministry of Health; organizational changes in hospital management and departments; the creation of a clinical leadership role; and a self-supervised planning system . POLICY RECOMMENDATIONS: These recommendations regarding training and the direction and organization of the change, coupled with systemic oversight of them by the Ministry of Health, will enable the system to become more efficient. They are particularly relevant today because the Covid-19 pandemic has exacerbated and highlighted Israeli public hospitals’ financial and organizational problems. Hospitals that already faced many challenges have had to cope with an unfamiliar medical crisis and a reduction of elective medical activity, causing them various types of damage, especially in term of economic stability. The hospitals’ fragile situation must become a top government priority because it can no longer be ignored. To achieve a strong healthcare system with stable hospitals, able to respond both to everyday challenges and to crises like the current pandemic, policymakers must provide financial and organizational support alongside managerial training, while maintaining an overall systemic plan.