Quo Vadis: Strategic partnerships in Healthcare – balancing the integrated ecosystem model with the paradox of competition vs. collaboration

Strategic partnerships have increasingly moved towards an integrated ecosystem model

Strategic partnerships in medtech and healthcare have undergone a profound transformation in the last five – eight years in many parts of the world, moving away from simple, often vendor-purchaser relationships toward integrated, ecosystem-based collaborations designed to tackle efficiency improvements and high-growth areas like Artificial Intelligence (AI), robotics, and remote patient monitoring – which often require pooled resources due to high costs and complexity. This is true for both private sector (e.g. private hospitals in collaboration with private medtech and pharma distributors, manufacturers, payers etc.) and public sector (e.g. NHS hospitals and clinics in collaboration with social care structures, procurement commissioners, local and regional authorities, Health Ministries).

Ecosystem models of partnerships emphasize co-creation, formal governance and contractual frameworks, synergistic value creation and mutual dependence (Irene M. Duhaime et al., 2021).

Private partnerships are now focused on "beyond the product" value — integrating AI into devices and healthcare admin operations, sharing data, and improving operational workflows to deal with rising R&D costs and supply chain constraints. In public sector, strategic healthcare partnerships moving towards the ecosystem model are becoming more important as they look to align public health goals with external expertise and capacity in order to render healthcare delivery more efficient, accelerate innovation, share data for research and planning, share risks and costs, bring in training and create shared governance forums and goals.

The paradox of competition vs cooperation

However there is a well known paradox of competition vs. cooperation between organisations in business (Brandenburger and Nalebuff, 1996), which has been somehow overlooked over the past 10 - 20 years or so due to globalisation, strong focus on cooperation and in order to avoid disruptive conflict, especially after the 2008 financial crisis. The period of peace and prosperity enjoyed especially in the developed world until a few years ago was possible due to a strong culture of cooperation among firms and institutions, at both national and international level. This cooperative model has been promoted and supported through levers such as education, regulation and international forums and governance, brought about by globalisation. It is easy though in such times of prosperity and "benevolent environments" (Bob de Witt, Ron Meyer, 2010) to become complacent as a business, less eager to change and innovate and even lose sight of initial objectives.

British Prime Minister Lord Palmerston (1784 – 1865) said in the 19th century Britain:

“We have no eternal allies and we have no perpetual enemies. Our interests are eternal and perpetual, and those interests it is our duty to follow.”

That reminds us of the importance of keeping focussed on one’s objective (interest) and also of being assertive – meaning respectfully but clearly defending those objectives in front of both business partners and competitors.

Modern Healthcare systems in Europe, UK and elsewhere focussing on a cooperative ecosystem model need to remind themselves the words of Lord Palmerston and acknowledge there are bound to be contrasting objectives and agendas among the ecosystem members. Healthcare is somehow a different type of industry (or should be) guided not just by efficiency and financial objectives but also by patient health benefits and a series of qualitative measures. Forcing organisations that are too different or with inherently contrasting objectives to work together is likely to foster frustration and power struggles.

Aligning incentives, embedding agile communication processes and finding ways to turn potential conflicting interests into collaborative innovation is one way to deal with hidden power struggles between alliance members. But on the other hand some economists caution that forcing too much cooperation, where there are inherently contrasting interests can be counter productive (Porter, 1990) and lead to complacency, lack of motivation and mediocre results.

One example comes from the STPs (Sustainability and Transformation Partnerships) in the UK, in place between 2016 - 2021 – they brought together NHS providers (hospitals and clinics), Clinical Commissioning Groups (CCGs), and Local Authorities within 44 geographical areas in England. These collaboration ecosystems forced members with contrasting interests (primary care; specialist clinical and hospital care; social care/community care; procurement commissioners; local authorities) to work together and share a pot of financial resources. Many STPs proposed reconfiguring hospital services, such as centralising specialised services (orthopaedics, maternity) and reducing the number of hospital beds to move care into the community – supposedly proving this way their focus on disease prevention, mandated by the national NHS England strategy and finding a way of sharing the healthcare budget. This had unfortunate consequences long term. It led to a significant decrease in the number of hospital beds/1000 inhabitants in England, from c. 2,33 beds/1000 people in 2015/16 to c. 2 beds/1000 people in 2020/21 (NHS England data collection, 2026), a drop of over 12%, in the conditions where England and UK had already one of the lowest rates of hospital beds in Europe, ahead only of Sweden in 2020. In comparison Germany had around 8 beds/1000 inhabitants and France around 6 beds (OECD 2025). Even countries with lower budgets like Greece and Italy fared better with c. 4 and 3 beds respectively per 1000 inhabitants (OECD 2025).

This is just one example where forced cooperation between too many organisations with contrasting interests in a Healthcare ecosystem led to overall inefficient and detrimental patient outcomes, as well as a loss of value for the system instead of value creation.

Why partnership model and strategy are important

The vast majority of business alliances and partnerships fail – not just in healthcare, but across the board. Many studies show that rates of failure are around 60 – 70% within the first two years across sectors (Harvard Business Review, 2007). In Healthcare there seems to be a higher incidence of alliance problems and failures due to clinical risk, safety constraints, regulatory complexity, longer clinical evidence cycles, fragmented funding streams and multi‑stakeholder governance (Journal of Legal, Ethical and Regulatory Issues, 2021). In healthcare, strategic partnerships often seek to align clinicians, hospital management, public and private payers, third party product and technology providers and distributors, regulators and sometimes patient groups – many of these with contrasting interests, values and ways of working.

However, it is not just the nature of interests and type of organisations in the ecosystem, but ecosystem size matters a lot too. Human cooperation thrives better in smaller groups and familiar environments (Elinor Ostrom - Governing the Commons, 1990). Forcing it into too large networks may only give the illusion of efficient cooperation, carrying the risk of covet power struggles and inefficiencies.

There is a tipping point over which allowing too many members or partners in the ecosystem can even lead to the ecosystem collapsing. This is because adding too many partners and members increases complexity and coordination costs, making decision-making and innovation slower and less effective and blurring accountability.

Another example can be drawn from two UK Healthcare data programs care.data (2013-16) and GPDPR (2021) - aimed to link GP records with other NHS data for planning and research, but public engagement, patient data consent handling and transparency were inadequate; communications failed and the programmes were suspended and later closed amid public and parliamentary concern. The initiative required coordination between national public agencies, GP practices, private data processors and third‑party users; conflicting priorities (speed of data access vs patient privacy and trust) and poor governance led to confusion about who was accountable for safeguards and loss of public trust put an end to a potentially valuable data initiative.

Therefore having a well planned, designed and executed partnership strategy – where partners are carefully chosen and assessed, roles and responsibility allocated wisely, there is a clear business case and mutual trust established – is ever more important, regardless of the size of the partnering organisations.

Conclusions

Overall what defines successful partnerships at their core hasn’t changed that much over time:

• Strategic alignment, trust and shared goals: Partners must share a common vision for patient care and financial goals, but also long-term, value-focused objectives. Alignment and shared goals, especially if communicated clearly and transparently between partners can establish a mutual relationship of trust, where expectations about the what (common goals and roles and responsibilities of each party) and how ( the roadmap of getting there, steps to be taken and also exact rules of behaviour and conflict resolution etc) are openly negotiated and formally agreed.

• Robust governance: Clear, transparent formal agreements regarding authority, accountability, decision-making structures, financial stakes and exit strategies are vital to avoid conflict but also to ensure that goals are met, risks managed or avoided and that stakeholders are protected.

• Cultural fit and communication: Successful partnerships, often facilitated by executive leadership and industry forums, require strong, proactive communication on both sides. Cultural fit is also important. The partners need to become just “us” instead of “us” versus “them” and speak with a common voice. Cultural fit doesn’t mean the organisations in the partnership need to be identical or have the same culture – but that there needs to be a complementary of skills and capabilities in the two firms and a “marrying” of mindsets, values, strategic goals and ways of doing business. If these elements are too divergent, the partnership has low chances of success. For example a “clan culture” of a small company focussed on collaboration, mentorship and cohesion can go well with a “structured culture” or a larger more formal organisation, focussed on stability, safety, efficiency of rules and procedures and good governance.

Partnerships work better when they are between only two parties and when the groups size is smaller. Often in Healthcare that is not possible and the ecosystem model means more partners – often with contrasting interests and organisational cultures – need to work together. That creates tension due to the paradox of colaboration vs competition. The ecosystem model requires specific design and coordination. In the private sector strategic collaborations things are somehow easier – but nevertheless they require careful planning, design and strategic thinking.

Contact us if you would like to know more and if you are in a strategic partnership, part of an ecosystem or looking to become part of one.