Alternatives, Agendas and Outcomes: Budget Cutting in Health Care Organizations

The structural characteristics of health care organizations have received considerable attention since the early 1960s when Perrow (1961; 1965) and Gordon (1961; 1962) wrote about the relationships among the top management triangle. Despite dramatic changes in the industry since that time, the basic structure has changed little. Power is still more likely to be shared among administrators, medical staff and board members than concentrated in a managerial hierarchy (Morlock & Nathanson, 1983). Objectives held by each of these three groups still tend to be diverse and conflicting rather than congruent. This combination of diverse goals and shared power suggests that decision making in these organizations may be more akin to the process observed in political and community settings than to the hierarchically determined process attributed to most types of organizations. That is, administrators in health care organizations may be constrained in their choice of actions by the preferences of other groups (Young & Saltman, 1985), and by the dominance of values that may act to the benefit of medical interests.