Using a Network in Risk Management: The Example of Health Insurance

Do network forms of organisation offer relevant responses to risk management? Transaction cost theory holds that hybrid structures do not offer sufficient protection from the major risk of opportunistic behaviours. However practice would show that network forms of organisation involve governance mechanisms which are as efficient as, and less risky than, financial and hierarchical integration.
At the beginning of the 1990s, when the failure of traditional regulation was blatant, the French government encouraged professionals and financial institutions involved in the health insurance system to change to a network form of organisation. Unexpectedly, insurance companies shifted from traditional forms of action to health call and information management centres. Those new structures were used to control the information flows regarding the type and cost of health services and thus to reduce asymmetries of information that characterise the sector. Heath call centres offer a cognitive space of negociation, allowing actors to achieve win-win transactions based on observed behaviours and actual constraints. They give birth to a new approach to health insurance and to new forms of networking among insurance companies, dentists, opticians, etc.
Those health information platforms, which can be identified to a form of “strategic kernels” (Jarillo, 1988), confirm the relevance of this concept for the coordination of exchanges and the control of compliance to common rules by actors of an organisational network.