The Role of Medical Professionals in Top Management Teams of Healthcare Organisations: An Economic Model

29 Pages Posted: 6 Jan 2008

See all articles by Ludwig Kuntz

Ludwig Kuntz

University of Cologne

Stefan Scholtes

University of Cambridge - Judge Business School

Date Written: January 2008

Abstract

The appropriate role of medical professionals in a hospital's top management team is a controversial issue. Clearly, the medical director plays an important part in balancing medical and financial performance. It is perceived wisdom among medics that the medical director's position should be strong and on an equal footing with the commercial director. Clinicians believe that relegating their representative to a subordinate role would entail financial considerations taking precedence in decision making, leading to cost-cutting and consequent detrimental effects on medical performance. We challenge this view, presenting arguments in favour of detailing the medical director a subordinate role. Using a simple game theory framework, we demonstrate that placing the medical director in a subordinate position may in fact lead to increased resources and superior medical performance, because medical and financial performance are strategic complementarities. We present empirical evidence to support the predictions of our model.

Keywords: top management team, healthcare organization, decision-making process, performance, professional organizations

JEL Classification: D7, I1, M5

Suggested Citation

Kuntz, Ludwig and Scholtes, Stefan, The Role of Medical Professionals in Top Management Teams of Healthcare Organisations: An Economic Model (January 2008). Available at SSRN: https://ssrn.com/abstract=1080570 or http://dx.doi.org/10.2139/ssrn.1080570

Stefan Scholtes (Contact Author)

Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Ludwig Kuntz

University of Cologne ( email )

Albertus-Magnus-Platz
Cologne, 50923
Germany

Stefan Scholtes

University of Cambridge - Judge Business School ( email )

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