Doctor Quoc Duy Vo
Digital DBA, 2024
Business Science Institute
For several years now, the healthcare sector has been grappling with numerous challenges. These include government measures such as budget cuts, reduced reimbursements for treatments, and restrictions on facilities, as well as steadily rising costs. Other challenges include rising patient expectations and deficits in healthcare establishments.
Amid this uncertain environment, radiology institutes find themselves in intense competition. This has led to the adoption of a variety of strategies in order to thrive: some centres prioritise the medical skills of their radiologists, while others focus on patient care and satisfaction.
These strategies reflect the value propositions embedded in their business models. So, what factors influence the choice of value proposition by radiology institutes? Are they grounded in appropriate institutional rationales? Is there a correlation between institutional logic and the value propositions of a radiology business model?
Research Impact(s)
The medical sector, and more specifically the radiology sector, has undergone rapid change. The logic of 20 years ago no longer holds true today. Therefore, management recommendations need to align with the prevailing thinking in the sector. Value propositions based on a professional rationale, i.e., a purely medical one, such as the skills of the doctor or the use of a state-of-the-art scanner, are no longer sufficient to secure the loyalty of patients and referral agents. In fact, they have been relegated to second place in relation to those derived from a market rationale based on ‘customer’ satisfaction. This includes factors such as rapid appointment booking with no waiting time, easy geographical access to the institute, and quick return of test results.
The value propositions derived from managerial logic may be less popular, but they are still utilised to control and optimise the use of available resources. These value propositions include controlling the number of examinations carried out and the turnover for each radiology unit, and rationalising resources, such as limiting the resources allocated to renewing radiology equipment. In this way, the value propositions derived from managerial logic are perceived as control instruments where priority is given to profits, to the detriment of the quality of radiology services.
Combining these different value propositions from various rationales can reinforce their mutual effects. The synergy between certain value propositions derived from professional and market logic has proven particularly effective when the institutional strategy aligns with that of the radiologists. The most emblematic example of this synergy is the creation of centres of expertise, such as the Breast Centre. These centres bring together all the specialists needed for breast cancer treatment, including radiologists, oncologists, gynaecologists, radiation oncologists, geneticists, and plastic surgeons.
These centres embody value propositions derived from a market logic aimed at satisfying the patient by bringing together all the specialists. This facilitates access to care and lightens the workload of the GP, who no longer has to coordinate care between different specialists. The main value proposition derived from the professional - i.e., medical - logic of these centres of excellence is to provide high-quality medical services, which unites doctors around these centres.
In this context, the work of Scott revealed that the medical sector was successively governed by several logics, known as dominant and secondary logics. My DBA research demonstrates the coexistence of multiple institutional logics within the field of radiology, with market logic predominating, followed by professional and managerial logics. This work has enabled the identification of value propositions emanating from these different institutional logics and used by radiology centres. Drawing on the concept of sustainable businesses, where various, sometimes competing, logics coexist, it becomes clear that the value propositions stemming from these logics can either produce a synergistic effect by reinforcing their impact, or be incompatible and generate negative effects. This work has therefore contributed to the identification of compatible and incompatible value propositions.
The appropriate use of value propositions from the professional and market logics has shown an interesting synergy when the strategy aligns with the medical profession. The improvements and measures undertaken by the institute must satisfy not only patients, but also radiologists. For instance, investing in a new scanner would reduce the radiation dose for patients, speed up image acquisition, and improve diagnostic accuracy for radiologists. Similarly, the market-led expansion of radiology groups allows them to increase their market share while providing services in remote areas where specialists are scarce. All these strategies align with the professional logic of radiologists.
However, the combination of value propositions from the managerial and professional logics revealed incompatibilities and a lack of strategic alignment with the medical profession. The value propositions derived from managerial logic are primarily aimed at rationalising resources, which often relegates investment in X-ray equipment and the training of doctors to second place. This approach contradicts the professional logic of doctors, who prioritise the quality of medical services.
Research Foundations
This research draws on the value proposition, which is one of the nine components of the business model canvas (Osterwalder & Pigneur, 2010). The value proposition is defined as “a concise representation of how an interrelated set of decision variables in the areas of venture strategy, architecture, and economics are addressed to create sustainable competitive advantage in defined markets” (Morris et al., 2005, p.727).
Institutional logic is the second concept that underlies this research. Institutional logic was first used by Alford & Friedland (1985) to describe the practices and beliefs associated with modern Western culture. From their perspective, society is a system in which several central institutions interact, including the state, the market, the family, democracy, and religion. Each of these institutions has its own logic or core logic that serves to define the interests and behaviours of individuals and organisations (Decker et al., 2018).
From my review of the literature on sustainable businesses, I was able to link these two concepts. These businesses design their business model to integrate value propositions from different logics, which can lead to tensions or, conversely, complementarities (Laasch, 2018).
Research Methodology
The methodological framework of this study is based on a hypothetico-deductive approach. This qualitative, descriptive research is conducted through a multiple-case study. Data were collected through semi-structured interviews. The data were analysed using Atkinson’s coding method and Atlas-ti software. The codes obtained were then rationalised, grouped by theme, and associated with the research hypotheses in order to test them.
Further Reading
Alford, R. R., & Friedland, R. (1985). Powers of theory: Capitalism, the state, and democracy. Cambridge University Press.
Decker, S., Üsdiken, B., Engwall, L., & Rowlinson, M. (2018). Special issue introduction: Historical research on institutional change. Business History, 60(5), 613-627.
Laasch, O. (2018). Beyond the purely commercial business model: Organizational value logics and the heterogeneity of sustainability business models. Long Range Planning, 51(1), 158‑183
Morris, M., Schindehutte, M., & Allen, J. (2005). The entrepreneur's business model: toward a unified perspective. Journal of business research, 58(6), 726-735.
Osterwalder, A., & Pigneur, Y. (2010). Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers.
Scott, W. R. (2000). Institutional change and healthcare organizations: From professional dominance to managed care. Univ. of Chicago Press.
View Dr Quoc Duy Vo DBA thesis defense
Key words: Institutional logic; Business model; Value proposition; Medicine; Radiology.