The Hidden Dynamics of Path Dependence by Georg Schreyögg & Jörg Sydow

Author:Georg Schreyögg & Jörg Sydow
Format: epub
Publisher: Palgrave Macmillan

7.6 Future directions

Technology induced modularity has greatly increased the ability of diagnostic radiologists to operate in other countries; yet, the ability of firms to modularize these and other professional healthcare services to offshore locations have been impeded by informal behavioural path dependencies that influence who domestically-based healthcare professionals will work with and by formal regulatory path dependencies which specify the licensing, credentialing, and legal requirements which healthcare offshoring must satisfy. This chapter highlights the factors that are both facilitating and restraining the offshoring of high value added physician services. It argues that this discussion can be readily extended to a large and growing range of healthcare services. For example, many healthcare plans in the United States have begun phone and email-based ‘Ask a Nurse’ programs as a way to provide lower cost yet high quality medical consultation programs for their members. As these programs use on-line databases and phone and email based interactions, these services have already been modularized: so, the next question is how path-dependent providers, patients, and regulators are. Will the providers and patients adjust their own behaviours to allow for these nurse programs to take advantage of potential cost and quality improvements by locating overseas? Will the regulators modify existing requirements regarding licensing and legal hurdles if quality levels can be vouchsafed?

While the focus of this chapter has been on healthcare, it can clearly be extended to a number of other service sector parts of the economy, especially those which are characterized by the dual tension of increasing technical modularity and path-dependent regulatory frameworks. Alan Blinder (2006) recently argued that

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