Building a Hospital Alliance — Taiwan Landseed Medical Alliance

Following the launch of the National Health Insurance (NHI) program in 1995, universal coverage was achieved in Taiwan. In the period immediately following the introduction of the program, private hospitals did well and many opportunists entered Taiwan's rapidly expanding, prosperous healthcare market. However, the boom did not last long, ending with Bureau of NHI's hospital global budget system in 2002. The new NHI policies, stricter regulations, and higher public expectations of healthcare services intensified competition in the healthcare market and many private hospitals were forced to close. The Taiwan Landseed Medical Alliance (TLMA) was formed in 1993 by eight hospitals. It was the first successful hospital alliance in Taiwan. Although most of the alliance members were private district hospitals, through collaboration and integrated networks TLMA offered a unique model that combined the strength of each of these small-scale hospitals. The alliance thus enhanced the ability of its members to survive despite fierce competition, and increased their capacity to provide first-rate health care. By fully implementing the operations and development strategies inherent in a collaborative hospital group, TLMA members worked through difficulties together and are already on course to meet many other alliance goals including the upgrading of hospital management practices and service quality, improvement of the medical environment, and promotion of good hospital practice. The case aims to evoke discussion on the important role of alliances in competitive markets and ways to form strategic alliances. Supportive actions and alliance structures should also be considered.