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Health systems function in an ecosystem that is turbulent and competitive because of demographic, economic, political, technological and lifestyle changes and sociopolitical influences, requiring hospitals to adopt comprehensive business strategies. Failure to do so may result in duplication, waste and deficits. This original article uses the prism of agency theory to examine differences in approach at two levels of hospital management and the consequent problems in the incorporation of necessary changes. Agency theory posits an inherent conflict of interest in organizations, including health organizations: the managers (agents) always aim to maximize their profit or personal interest instead of that of the owner or organization (principal), potentially causing difficulty in managing the organization. The aim is to generate recommendations for policymakers.

The study is based on 30 semi-structured, in-depth interviews with key figures in the health system and on two levels of hospital management: senior managers and heads of selected departments. The analysis used a categorical qualitative methodology.

The main findings are five key themes: views of business behavior, asymmetry of interests, asymmetry of information, transparency and cooperation between various levels of management and ambivalence toward business in hospitals. The two levels of management are clearly divided in terms of interests, information and activity, leading to difficulty in cooperation, efficiency and achievement of organizational goals.

Using agency theory, this study provides a systemic and organizational view of hospitals' management and environmental adaptation. Understanding the processes and increasing cooperation at various managerial levels can help make the system more efficient and ensure its survival in a dynamic market.

This study aims to map perceptions and changes in public hospitals in response to competition with the private health system, describes solutions adopted by the public hospitals and considers their implications for the business and strategic management of those hospitals.

This paper opted for a qualitative study using the open-ended approach of grounded theory, including 40 in-depth interviews with key figures in the health system and administrators at various levels of management.

Public hospitals are constantly adopting changes because of state-mandated reforms and growing competition with private hospitals. Notable measures include making hospitals customer-oriented and adopting business-oriented behaviors and competitive and marketing strategies. However, because public hospitals are unable to institute radical changes, they typically introduce hybrid services (private services within public services) and other creative solutions such as business-funded research foundations operating alongside them.

The main methodological limitation of this study was the difficulty in obtaining data because of the limited cooperation and lack of transparency of Israel’s health-care system. The interviewees expressed concerns that their department or hospital would appear in a negative light, especially as motivated solely by financial considerations. In anticipation of this difficulty, requests for participation were addressed individually and contained extensive detail regarding the study, the ethics committee’s approval, the data gathering and the strict maintenance of anonymity and confidentiality.

Adopting business-oriented behaviors in public hospitals is somewhat contrary to the principles of public medicine. Their adaptation to the market is partial, and their creative hybrid solutions require state regulation. The absence of controls leads to duplication and waste, causing various problems, including increased social inequality, costs and deficits.

The COVID-19 pandemic has affected educational systems worldwide, forcing them to abruptly shift from face-to-face to online teaching and learning. This case study illustrates how a traditional lecture-based activity for undergraduate students in a Management of Health Service Organizations program was transformed into an argumentation-based learning activity using the technique of digital concept mapping and was deployed in an online format during the COVID-19 lockdown.

The students were tasked with solving an ill-structured problem bearing significance for their future professional lives and connected to the contents of their course (entitled “Assimilation of service quality in health systems”). The activity was composed of two phases. In Phase 1, participants were asked to provide five arguments to establish their proposed solution to the problem by using a concept map on a digital platform (Mindomo). In Phase 2, they were asked to substantiate their arguments. Reflective journals were used to ascertain how the participants viewed the activity. Thematic analysis was used to analyze the qualitative data by searching for themes demonstrating different epistemological positions.

Six themes were inductively derived from the students' reflections: (1) transitioning from passive to active learning; (2) generating epistemic change; (3) social perspective-taking; (4) domain-based knowledge; (5) prior knowledge and experience; and (6) online collaboration with other students. Episodes, thoughts and feelings expressed by the students were reported so as to increase the reliability of the recurrent and common themes.

This study mainly shows that combining constructivist teaching and learning tools with advanced technology in an online course enables the development of lifelong learning capabilities among students in the health management professions.