Carilion: A Corporate System of Managed Health Care

In the late 20th century, the management of care came under the control of large health care conglomerates, like the Carilion Health System in Roanoke, Virginia. This study examines the evolution of Carilion from its beginning in 1988 to the present and analyzes Carilion as a complex system by using analytical tools drawn from a variety of STS scholars.

Carilion's mission began with its hospitals. From 1954-1988, Carilion's predecessor, the Roanoke Hospital Association, developed a network for delivering care, training programs and management to small community hospitals throughout southwest Virginia. In 1988, the Roanoke Hospital Association was officially renamed the Carilion Health System. In its initial phase, 1988-1992, Carilion expanded its hospital network into as many communities as possible. The thesis of this work is that Carilion and communities came together to see if they could build a corporation to manage care and, at the same time, maintain local traditions of care.

From 1992-1996, Carilion transformed itself from a hospital organization to a health care system and finally to a managed care system in order to compete with rival Columbia/HCA. This transformation required the creation of a physician management company and a health plans division. In 1995, Carilion's administrators began a reengineering program which redefined services and strategies for corporate growth. This included construction of a state-of-the-art facility situated between two competing Columbia/HCA hospitals in the New River Valley. In 1998-2000, Carilion engaged in a massive advertising blitz to garner additional market share from Columbia/HCA. Carilion's marketing strategies show that health care has changed dramatically under a business model, in spite of corporate America's assurances that it would not.

This study gives voice to health care workers who describe exactly how their experiences have changed since corporations, such as Carilion, began managing their work. Drawing on interviews with Carilion physicians, hospital administrators, board members and medical staffs, the day-to-day activities taking place within hospitals and physician practices comes to life. The narrations describe how difficult it is for groups working within Carilion's facilities to carry out Carilion's growth strategies while at the same time maintaining communities' traditions of care.

Since 1999, Carilion moved in three new directions: the creation of the Carilion Biomedical Institute incorporating biotechnology and biomedicine; the institution of a hospital partial-ownership program, which meant Carilion did not have to assume full ownership and expenses of some facilities; and the installation of an electronic medical records system in physician practices to manage patients' data, physicians' costs and physicians' productivity. These new directions illustrate how Carilion envisions a different paradigm of care delivery. While the study addresses how Carilion became a managed care organization, this work represents foremost an analysis of system building in America today. Like most corporate systems, Carilion exemplifies a mix of social, economic and technological components that have been assembled to form a corporate entity. This work explains how corporate systems come to manage traditions, values and resources within communities and for communities.