Entrepreneurship in Healthcare Or ganization s [602381]

Entrepreneurship in Healthcare Or ganization s

Student: [anonimizat]. Vlad Alexandru Sandu
Scientific Coordinator: Conf.dr.ec. Corina Dumitrescu

Universitatea POLITEHNICA din
București
Facultatea de Antreprenoriat,
Ingineria și Managementul Afacerilor

I. The main concept of Health

Health is defined by WHO as: “a state of complete physical, mental and social well -being
and not merely the absence of disease or infirmity”[1]. A controversy has been around this
definition, due its limitation value of implementation [2][3][4]. Health sho uld be defined as the
capability of human being to adapt to physical, mental and social challenges throughout
lifetime[5]. This way of defining health is an ideal one, but few individuals can fit this situation.
A more modern way to approach the concept o f health was brought by Brody and Sobel,
which define health as “the capacity of a system – cell, organism, family – to adaptably respond
to various environment challenges – physical, chemical, infectious, psychological, social”. In this
case, health is se en as a positive process, not a lack of symptoms. This perspective includes also
the environment, besides of the general status of the individual physically and psychologically [6].
Many of the existing definitions show the fact that health is a result or a consequence of
actions, such as nutrition, lifestyle, immunizing to the purpose of prevent diseases or medical
treatment to heal possible affections [7]. The dictionary called “American Heritage” for instance
define health as a measurable and fix unit, respectively “a general state of a body at a time”.
For the previous definitions to be complete, the topic should include the problematic of
prevention and treatment of health issues.[8]
In another sense, health is a process where all the human aspects w ork together, in an
integrated mode. All these aspects are working in a relationship for the individual, as the organism,
mind, spirit, family, community, country, job, education and his beliefs, all together are corelated
into a network.

I.I Healthcar e systems and organizations
Definitions and concepts
Multiple healthcare organizations are assembled in a healthcare system. They are different
through the organizational chart perspective, main objective, organizational culture but their
common goal is r epresented by the patient.
Healthcare organizations are structured interaction systems which have the purpose to
promote, maintain and improvement of population’s health condition and for different professional
categories[9]. These could include: hospitals , diagnostic and treatment centers, policlinics,
dispensaries, medical laboratories, ambulance stations, etc.

Healthcare
systems As well, healthcare systems can be described as the sum of resources of promoting health
condition, prophylaxis, medical care, including healthcar e organizations and the relationships
between them (fig.II.1.1). The development of a healthcare system is directly influenced by the
policies of treatment adopted, dependent on their turn on finances, population structure and social –
economic growth of tha t respective geographical region, ratio of results vs costs and
simultaneously by the attitude and expectations of the patients[10].
Healthcare system can be considered as the assemble of resources which offer medical
care and promotes health condition and wellness, including all its relationships.

Fig.I.1.1 Healthcare system as a result of interactions between cultural values, organizations
and technology [11]

The healthcare system is composed by subsystems between which is a direct, continuous
and constant correlation.
Subsystems can be organizations who deal with:
• Producing and developi ng human, material and financial resources;
• Drawing healthcare programs and careful supervision of them;
• Financing systems through tax collection, contributions, direct payments, etc.;
• Organizations which can be in direct contact with the end users of medi cal
services.
So therefore, healthcare system is an aggregate of components which participate in
realizing and assurance of social and familial health condition in a population.

Organizations
Cultural values Technology

Particularities of h ealthcare systems

The elements of such a system refer at:
• Targeted patient services, as the main goal of the system;
• Quality improvement of the health services;
• The responsibility of the administration in Human Resources and Material
Resources;
• The involvement of inside stakeholders (doctors and employees) but also external
(MoH, patients) in achieving the objectives of the respective medical
institution/unit.
Healthcare systems are directly dependent of financial resources – respectively by share of
GDP allocated in every country – which is desig nated in development and research of new
diseases, reduce of morbidity and optimizing the ratio if cost -efficiency.

Essential conditions for a performing healthcare system
• General coverage;
• Quick access;
• Pertinent to needs;
• Equality;
• Possibility of choice ;
• High Efficiency;
• Large scale accessibility;
• The responsibility of state to public health system;

A real healthcare system cannot have all high qualities and even if the systems met all
these conditions, it cannot maintain in this status being in continu ous change due to social –
economic conditions but also of growing high demands of the patients[12].

Financing the healthcare system

A performant healthcare system is based on the principle of competition between the
suppliers for efficient using of the existing funds, as the state respects the neutrality of all the
medical services providers. Quality control of the offered services mus t be also regulated, with an
emphasis on the creation of the control offices at National Home Insurance House level (CNAS)
and Territorial House Insurance Offices, to orientate the activity towards this field. It must be
specified that the modality of gath ering the funds represents just a small part of a healthcare
system, the way of distributing them – respectively the management of the funds – towards the
serviced providers, to be, the factor which determines the performance of the system.
Healthcare serv ices – in a comparison with other services – is formed by many individuals.
For reason of fairness, in almost all countries is at a base a national health policy which regulates
the access at access to medical care and who pays for it. The mechanism of fin ancing represents
the implementation tool of this policy [13]. This mechanism includes collecting resources for the
payment of medical care, their allocation and payment of production factors.
The main sources of collecting the funds for the healthcare org anizations[14] – medical
assistance – are:
• General taxes – which are collected to the state’s budget and then distributed to
the healthcare system according to the approved budget by empowered authority
(usually the Parliament).

Tax income
Money allocation

Providing medical services
Fig. I .1.2 Cash -flow from tax incoming
PopulationCountry's
BudgetHealth
sector

• Compulsory insurance premium – for entire population regardless the state of
health of the individual who is paying; and it represents a fixed percentage from
the gross salary, not being correlated with the risks of illness of the insured patient.
Usually the respective premiums have an established share from the employee and
company’s income, which are called social health insurance.
• Optional insurance premiums – which are correlated with the patient’s healt h
condition and risk of illness.
• Direct payment of medical services – “out of pocket”, when health service is used.
This tip of payment is rarely met in Western Countries, which is usually a
copayment – meaning a coverage of a limited percentage of the cos t of the medical
service that is not covered by the basic insurance.

The main resource of financing healthcare services in Romania are, unquestionable, the
payment from National Health Insurance House.
Since providing medical services has a high value, i n Romanian Healthcare System there
were implemented a series of national programs in which the payment is made from the state’s
budget for healthcare[15]. In this category is involved the payment of dialysis care, oncological
drugs, etc.

II. ENTREPRENEURSHI P: CONCEPT, FORMS, TYPOLOGIES,

Factors of influence

The e ntrepreneurship activity is an independent activity, carried out on own risk and
oriented towards the systematic profitability of the use of the product goods, the sale of goods, the
execution of works or the provision of services by persons officially registered as such in the
manner prescribed by law.
Entrepreneurship refers to an organization (usually a small or medium -sized enterprise as
number of employees), which highlights parti cularities relevant to the resource management
process. In this context, entrepreneurship is considered as one of the most important functions from
a society, if not the most important care is that society.
"Entrepreneurship" has uniformly positive connot ations, implying initiative, innovation
and opportunity recognition. Defining the concept is more difficult. Instead, researchers are

continuing to expand, redefine, and innovate entrepreneurship in many different fields.
Entrepreneurship has economic as w ell as behavioral dimensions, but a good general definition
that focuses on the managerial aspects of entrepreneurship is that it is "the pursuit of opportunity
without regard to resources currently available" [15].
Additional definitions of entrepreneurship refer to “an act of innovation that involves
endowing existing resources with new wealth -producing capacity ”[16]. Furthermore,
entrepreneurship can be related to productivity, where the entrepreneur is responsible for
determ ining optimal production, investment, and financing decisions (Williams and Thompson
1998). This definition serves well to define intrapreneurship the pursuit of opportunities within an
existing organization, as well as entrepreneurship, which commonly ref ers to the pursuit of
opportunities through formation of new ventures .
Starting from the proposed definition, the entrepreneurial process can be divided into 6
stages:
1. Identification of opportunity
Peter Drucker had found 7 sources of opportunities:
– the unexpected events of our activity (the unexpected success of an activity or
ideas, namely the unexpected failure of an activity);
– the discrepancies between the current situation and what is desired;
– the opportunity to get a good or service in a faster, m ore time efficient or high
quality;
– changes in the structure of a sector or market as a whole various factors (e.g. law);
– demographic change (aging population);
– changes in lifestyle and perceptions at the target group level;
– the emergence of new knowledge and technologies.

2. Developing the business concept
In the economy, business is the social consciousness of leading people so that they organize
and maintain collective productivity for the purpose the fulfillment of the particular creative and
productive goals that usually generate, profit. The phrase busi ness word refers to the stage of
"being busy" in the context individually, but also in the sense of community or society. Practically,
be busy means making profitable and commercially viable work. The term "business" has at least
three uses, depending on t he purpose:

a. In a narrow sense, the business may be a legally recognized entity economic society,
where individuals are organized on the basis of expertise and the ability to bring social and
technological innovation.
b. In predominantly capitalist eco nomies, businesses are only formed with in order to gain
profits and increase the personal wealth of their owners.
c. The owners and operators of a business have as their primary objective the acquisition
unrequited financial return in exchange for their work – which is materialized in consumption time
and energy – and their ability to accept the risk – investing effort and effort money without
expecting a safe success.
Exceptions to this rule are those businesses that are run in co -operatives or governme ntal
institutions.
Businesses are two ways:
• B2C (business to consumer) if the products and services offered are addresses consumers
• B2B (business to business) if the products and services offered are addresses other
businesses, incorporating them int o their own products and services.
A business purposes or has two fundamental objectives:
• Survival – to withstand the market indefinitely, confronting competition, trade unions,
authorities, struggling with their own inefficiencies, evaluating risks and assuring them against
them
• Gain or profit – maximize the benefits of business owners (entrepr eneurs, shareholders
or owners)
A true business is the transformation of work, imagination, risk and the entrepreneur's
capital in sustainable profit with which the company or the client will reward the satisfaction of its
needs or pleasures.
Profit is the surplus obtained by a trading company when the income the total that it obtains
from all its activities exceeds the expenses necessary to carry out these acti vities. It can be:
– Gross profit (taxable profit) actually realized by a company trade is calculated by
subtracting all expenditures (within the limits of permits) of the total income earned by the
company.
– Net profit is calculated by subtracting from the gross profit of tax. The corporate tax is a
personal tax, and within the tax reform in Romania has an important role to play in corporate
taxation the prism of its contribution to the formation of budgetary revenues, as well as by
influence profit -generating activities.

The concept of business must respond to an existing need and to meet the following criteria:
– be unique (distinguish from other similar ones);
– be comprehensive (to target product / service and variables such as price, promotion,
distribution);
– be feasible (can be developed in time);
– be sustainable (after implementation, the concept has to withstand enough time in the
market to generate the profit).

3. Determining the necessary resources
The main categories of resources are:
– entrepreneur (health, time, motivation);
– collaborators;
– distribution channels;
– raw materials;
– financial resources;
– locations;
– licenses and patents;
– machinery and equipment;
– social capital (re lationships).

4. Getting the necessary resources
A fundamental rule for a business at the beginning is not to invest in fixed assets to stay as
flexible as possible to respond to risks which at first are at the maximum. The entrepreneur needs
to focus on en suring the financing of current and long -term activity. As a rule, general,
entrepreneurs appeal mainly to three categories of new funders their business ideas: family, friends
and "madmen".

5. Business implementation and management
The more entrepreneur wil l know to use its resources more efficiently to get results that
differentiate your business, the more secure it will be competition attacks.

6. Gathering the results
Involves the use of the results obtained to develop the business, a diversify and attack new
markets or sell it at a good price. This stage involves the use of resources used to initiate a new
entrepreneurial cycle.

The entrepreneurial behavior it manifests through:
a) Incipient entrepreneurship;
b) Professional choice;

a) Incipient entrepreneurship involves trying to set up a corporation of to the entrepreneur,
which is influenced by several factors or conditions aggregates such as:
– entrepreneurial demand and supply;
– the role of technology;
– the role of economic development;
– the role of demographic factors;
– the role of support institutions;
– the cultural factor.
It is important to see how these factors (macroeconomic forces) are exerting influence on
early entrepreneurship through individual choice an occupation. The more en trepreneurial demand
is needed (to start a new businesses), the higher the percentage of the population that will choose
as occupation management of an independent business. The supply side refers to the number by
individuals who have both the necessary sk ills and preferences to start a business.

b) Professional choices.
This component involves an extensive process of evaluation and comparison risks and
benefits (financial and non – financial) specific to certain types of business the work done, having
the qualities of comparison and the quality of the owner employee. Sometimes unemployment and
domestic work can be considered as professional choices.
Studies in the field have identified a risk -benefit profile of individuals, considering
independent labor (paid or unpaid). This risk profile – benefit, own to each individual, determines
personal professional choices. These choices professional persons include both the intent of
potential entrepreneurs to opens new businesses, and the intention of existing business owners to
stay in business or going out.

Entrepreneurial demand & offer
Demand for entrepreneurship reflects the opportunities to start a viable business, relying
on certain opportunities created by the influence of some fac tors emerging macroeconomic
(example: innovative technologies, high degree diversification of consumer demand).
In the entrepreneurial offer, the skills must be considered individuals and skills of
entrepreneurship, these being considered as key elements. Thus, choosing a person to take
advantage of a certain opportunity or not depend on the person's deposits on:
– the level of resources it has or can obtain;
– the set of abilities and traits of the acquired character;
– certain preferences.
Almost all macroeconomic forces have a n influence on skills and personal preferences,
these forces having a strong impact on supply and demand.

➢ The role of technology
New technologies specific to 21st century communication and communication information
has a hig her potential to generate new goods and services, creating opportunities to launch new
businesses in business. They also allowed the reduction transaction costs, lowering efficiency
thresholds in many areas activity. The amplification of entrepreneurial op portunities determines
an ensemble technological breakthrough .

➢ The rol e of economic development – the three categories of factors that highlight
economic development a company influences the entrepreneurial offer through the degree of
availability of re sources for businesses. So :
a. Economic development , by its level, is the most important factor important that
influences opportunities in the business environment. At the same time, passing companies from
production to services create new opportunities because in the sphere service barriers on the market
are mummified (with less impact) than in the sphere of production.
b. Per capita income is an important factor imprint and influence changes in the structure
of activities, amplifying into one certain opportunities for entrepreneurship. Thus, revenue grow th
determines the increase in demand for services, which in the end determines the diversification of
demand consumers.
c. Strong demand diversification . Such diversification will allow New companies take
advantage of powerful, traditional, dominant marke t dominants. New companies aim to capture

new segments on a competitive market in certain areas of activity, so that new suppliers of
specialized products are favored by this diversification.

➢ ROLE OF DEMOGRAPHIC FACTORS (maturity, lifetime)
At macroeco nomic level, studies show that the number of new businesses is influenced
population decline (natality), agglomeration and urbanization degree the area under consideration
and the number of small enterprises in the organizations.
At the same time, educati on, its level and degree of specialization can constitute a positive
factor for those entrepreneurs who are launching new businesses with a better training in the field.

➢ ROLE OF SUPPORT INSTITUTIONS
In the category of these institutions are included: the family, the educational system, the
economic system, the political system and the legal system. Analyzing the demand side finds
several financial and other institutions, as well as certain government policies aimed at abolishing
right -handed regulations at the entrance the market of new firms and the privatization of service
companies.
Thus, at the level of the European Union, it is intended to facilitate the elements which
favors the widening of the private sector, with regulations being developed tax and social
protection measures for new entrepreneurs (entrepreneurs).
Analyzing the offer, it is noted that the aforementioned support institutions stimulate the
opportunities and preferences of entrepr eneurs .[17]

III. Initiatives of entrepreneurship implementation in Romanian Healthcare System
Innovation and Entrepreneurship – a new "recipe" for the health system

Entrepreneurship was defined by J. Schumpeter as "creative destruction": o ld and outdated
values and beliefs are replaced by new ways of thinking. Ability to translate a novel idea into a
product, service, process or business model that can be applied and that has value for the user is
known as innov ation. This one also includes making products, services, or processes that already
exist to become available those who had no access to them before. [18]
This feature is particularly relevant for healthcare in the context of developing countries,
as the key im proving access and capital gains, as well as lowering costs will depend on leverage
existing and convergent existing technologies (such as imaging and genomics) that are ideally
positioned to fuel the medical revolution. Process innovations based on those of industry leaders
in other sectors (e.g. for example, on Toyota's production systems or on the supply chain
management of Toyota Wal -Mart) are also extremely important in gaining efficiency and should
take place in parallel. These could be innovations of clinical processes or innovations in all
activities secondary or support related to the provision of healthcare.
Although all the innovations and the ability to innovate are inherently valuable, they do not
make any sense unless they are put to the dispo sition of the masses. Entrepreneurship is the process
of removing market innovations or applying them on a scale wide in organizations, regardless of
the constraints we face. We need with desperation as individuals with entrepreneurial spirit to
make chang es in health organizations and throughout the system. Instead, we are attached to
managers and managers, one striking contrast to what we need to transform the system.
The critical point has been reached in the Romanian health system and now more than eve r
we have need new players, especially leaders, to adopt and propose creativity, innovation and
innovation thinking and entrepreneurial behavior as a major catalyst for change positive in our
healthcare system and delivery of healthcare.

Model of interco nnections between entrepreneurship and a health system functional
This model resulted from a careful and pragmatic observation of the author who had it the
preoccupation of studying the premises of the development of the entrepreneurial phenomenon in
Roma nia, the country in which the entrepreneurial tradition was suddenly interrupted and
ideologic ally fought for almost 60 years.

Fig.1 Model on interconnections between entrepreneurship and a functional health system

The model started on the premise that any society needs entrepreneurs (in literal sense the
actual entrepreneur) or the manager with an entrepreneurial opening. They are like thi s if they
follow the next conditions: in an ideal way, we must have a country with entrepreneurial spirit,
initiative and education; even the countries with a vast culture and heritage for hundreds of years
in entrepreneurship, in which entrepreneurial spi rit is in their individuals’ DNA (transmitting in
an informal manner into the family from one generation to another); important resources are Stakeholders
External
environment
(political,
economic, social,
technological,
legal factors) Tradition Internal
environment
(organization,
structure,
culture,
resources) Education
Entrepreneurial spirit
Private
component Public component
Entrepreneurs /
entrepreneurship
initia tive Hospital
managers /
Entrepreneurial
orientation
Entrepreneurship
in medical field Entrepreneurial
management ]n
healthcare
Private
healthcare
system Public healthcare
system
Functional
healthcare system

allocated to formal entrepreneurship education in schools and universities. This favorable
environment creates an appropriate entrepreneurial potential (this means that a significant
percentage of population consider building a future career in business).
For the plan to take shape, there must be favorable conditions, first the opportunities in the
market and infrastructure. The entrepreneurial potential generates more than one businessman or
CEO of a company, it generates also a spirit and a culture for entrepreneurship in the society, spirit
which will animate other active segments of it, including public institutions, which will generate
top managers with entrepreneurial engagement, and last of all it could lead to the idea of a new
paradigm of entrepreneurial government.
On the other hand, the policies and institutions ar e crucial, to issue the proper rules and
regulations of such an important game and to create mechanisms for good functioning of the
market and finances. Also, they must regulate a clear set of laws, correct, stable and concrete ones,
to stimulate innovatio n and initiative spirit. Personally, I consider that health sector puts a slow
tempo or delay in the entrepreneurial attempts. I understand that the fear of mistakes or corruption
leads to overcoating with excessive bureaucracy, but our practice and the ex periences on long term
showed that it could inhibit initiative and innovation in the field because of the big stakes of
assuming responsibility and paradoxical it won’t eliminate the corruption in medical system.
The environment plays in important role in the equation of entrepreneurial spirit. In
healthcare industry, the environment is made up of providers (e.g. hospitals doctors), suppliers
(pharmaceutical companies, medical equipment suppliers and manufactures), competitors,
patients, various stakeholde rs including central and local authorities.
The health industry, similar to the automobile, telecom and computer industries was
presented as a turbulent and competitive one , that is, it is characterized by very complex and rapi d
changes. Moreover, the industry health is also complicated by the multitude of interests directly
and indirectly involved in providing healthcare (internal and external stakeholders). Thus, in
moments of turbulence, the ability to anticipate change, to r ecognize external forces and to meet
market needs greatly improves the chances of success. Among the forces that affect the health
industry include: aging, growth ethnic and cultural diversity, the development of new technologies,
especially in the medical , changes in the supply and training of medical professionals,
globalization world economy [19].
The external environment strongly influences the functioning of the internal environment,
which consists of the organization itself, from its structure, from its culture and resources. The
structure of the organization describes compartments, hierarchical levels and hierarchical weights,

communication and workflow. Culture is a model of beliefs, values and behaviors that members
of the organization have in common. Resources are the goods used to produce the organization's
products and services. On As the external environment becomes more turbulent, the internal
organization must act to reduce uncertainty.
Under these tough environmental conditions, the entrepreneurial activities that have been
successful in other activities of the national economy can be transplanted into the medical industry
to promote success.
As mentioned above, and as shown in the model presented, the entrepreneuria l spirit would
must be found in both the private and the public health system as a society be able to aspire to
reach a critical mass of viable organizations delivering added value to ensure a functional health
system.

Conclusions, personal statement

The criti cal point has been reached in the health system and now more than ever we need
new players, especially leaders, to adopt and propose creativity, innovation, thinking and
entrepreneurial behavior as a major catalyst to achieve positive change in our health care system
and delivery of healthcare
Entrepreneurial activities should be used by healthcare organizations to improve
organizational growth and profitability and should be promoted as a means to achieve more
efficient, flexible and adaptable management i n external environments competitive and turbulent.

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