Pre-requisites for an alliance are willingness and mutual requirement of the partner organization to share risk and cost, knowledge and capabilities and to take advantage of interdependencies to achieve common goals.

Globalisation has taken the healthcare industry too into its fold. Alliance in healthcare is one trend that proves this trend. Corporates like Wockhardt, Fortis and Max are taking to alliances to have an edge over other private hospitals in local market. Alliances of Wockhardt Hospital with Harvard Medical Institution, Fortis and MIT are slowly becoming popular.

In India, healthcare industry has vast scope for utilizing the concepts of alliance. Not only hospitals but also allied areas like TPA and insurance sectors have entered into tie-ups with healthcare providers across the globe.

The alliance of Parekh Health with UnitedHealthcare International Group (US) is a good example of application of innovation and technology from US to suit the needs of local markets. Many state governments are investing in restructuring the facilities of public hospitals. Disinvestment policies and success of alliance between Gokuldas Tejpal Hospital Mumbai and Wockhardt Hospitals Limited may pave way for more such ventures.

The pre-requisites for an alliance are willingness and mutual requirement of the partner organization to share risk and cost, knowledge and capabilities and to take advantage of interdependencies to achieve common goals. The objective of alliance is to gain competitive advantage, leverage critical competencies, and improve flow of innovation and flexibility in responding to market and technology changes. Providers can enter into alliances in order to gain economies of scale and scope, enhance the acquisition and retention of key resources, expand their revenue and service base, increase their influence, and improve market position.

Alliances in healthcare can be of the following types:

Operational:
This type of alliances are usually entered into for collective bargaining, sharing information and methodology regarding operational process and also sharing human resource capital.

Strategic:
Organizations come together for better market penetration, improving brand image and also to share risk and returns on investments.

The benefits from inter-organizational cooperation and alliances can be to:
Develop opportunities to learn and adapt new competencies.
Gain resources.
Share risks.
Share cost of product and technology development.
Gain influence over domain. Gain access to new markets.
Enhance ability to manage uncertainty and solve complex problems.
Gain mutual support and group synergy.
Respond rapidly to market demands and technological opportunities.
Strengthen competitive position.
Successful alliances have several key ingredients, beginning with shared objectives among the participants. Commitment is based on mutual need; the alliance will endure only so long as mutual need exists. Risk sharing completes the bond, creating a powerful incentive to cooperate for mutual gain. Alliance partners must learn to appreciate and adjust to differing view, trust and respect the need to maintain individual internal cultures.

Method of operation of alliance:
Members must have commitment to devote time, energy and resources and a strong belief in capabilities of each other for achieving the objective of alliance. Alliances are to model keeping into consideration importance of designing and communicating common purpose; developing realistic expectations; and clearly framing the domain, scope and activities of an alliance. The most difficult task in alliance is to maintain equality of interest of multiple parties involved and to maintain openness and transparency of communication.

For alliance partnership to be successful, the three mandatory conditions are:
1. Selection of an appropriate partner(s). It is essential that participating members or partners of an alliance are rigorous in analyzing themselves and each other as to compatibility and complementarily of goals, purpose vision and values and possession of clear indications of interdependency.
2. The basis of the alliance trust and commitment. Fragile nature of alliances leaves open the question of whether they will prove to be temporary or permanent organizational phenomena.
3. The term and terrain of the alliance must be clear. The operating rules must be explicit and expectations mutually understood and agreed upon.

Characteristics of effective alliances:
 Objective importance.
 Long term return on investment.
 Balance of power.
 Integrated flow of information.
 Openness and transparency.
 Institutionalization of alliance.
Measurement of effectiveness of alliance:
Effectiveness of alliance can be seen in two different perspectives:
Variance perspective: The effectiveness is measured by the substantial change in the utilization rate of services offered, increase in bed occupancy rates and increase in the overall market share.
 Process perspective: Any change in structure, process and outcome due to cost and risk sharing, innovation, human resource, capabilities flow within the alliance partners can be measured for effectiveness of that alliance. The most important factor is from a hospital perspective is a change in patient satisfaction level, decreased length of stay and also reduction in operational cost. Performance would be judged in context of * An economic dimension (e.g. economies of scale, new resources of revenue and capital). r An organizational dimension (e.g. market position, human resource management). * A social, political dimension (e.g. access to care availability of services).

It is not necessary that every alliance turn out to be a successful alliance. Alliances turn out unsuccessful because of :
 Short-term financial results rather than long-term objectives judge alliances.
 Lack of trust among the alliance partners.
 An uneven commitment and imbalance of power exists.
 Individuals at lower operating levels (who must make it work) are not informed about or involved in the alliances.
 There is an absence of clear understanding of partners respective motivations and expectations.
 There is a lack of mutually accepted performance measures.

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