Health Care Organizations Essay

Founded in 1946, Seattle’s Group Health Cooperative was created by doctors and community members who believed that there needed to be a health care program that was affordable, member centered, and held principles of social justice. This cooperative was one that had been successful for many years, but just recently was acquired by the not for profit Kaiser Permanente health-care company on February 1, 2017 for 1.8 billion dollars. Although Group Health is a cooperative and Kaiser Permanente is a nonprofit healthcare company, they have similar views on how they run their companies because both have missions to put their members and employees first. This is something that the articles stressed because this merge is going to affect thousands of members and employees. I plan on focusing on the process Kaiser Permanente had when wanting to take over Group Health Cooperative, the pros and cons of the final decision to merge the two healthcare programs, and ultimately how Group Health’s marketing and management strategies will be implemented in the merge. (12)

Growing through integration can have a positive effect on the competitiveness of a business in that firms are able to buy out or merge with other large powers in the market to make a ‘super power’ in the market. This ‘super power’ gains a larger % of the market as the two original

Merging with another organization has downfalls of destroying wealth from the merger. Considering the buying price is important when merging, spending too much on the merger will impound the value after the merger. Some mergers do not create wealth so capital is lost through the merger. There is no guarantee of financial gain and every formula considered with focus, just as with an acquisition. The final decision dictated by the variables. One company merging with another company takes the debt and losses of those companies in the new formed company.

To add to the dilemma, the rising cost of healthcare will not adequately be addressed by any new healthcare system. The costs of healthcare in America are staggering and currently represent over 17% of our national GDP with the expectation of that number rising to 20% in less than 5 years. These costs are direct hits on the revenues received by hospital which affect their ability to remain operational. As the hospital’s revenues and profit margin decrease, so does the expected longevity of the hospital.

The hospitals are more in favor of having physicians on the hospital staff rather than contracts. The high costs of Medicare and Medicaid are raising the cost of healthcare for this hospital, and the nation. The competition between a not-for-profit hospital and a profit hospital are beneficial to the consumer. The competition with a profit hospital will have the effect of lower prices for this hospital, but higher quality of care for our

“Within the health care industry, competition impacts several relational perspectives; with numerous studies reporting the impact of increased competition. For example, several studies have examined the relationships between competition and quality of health care (Zwanziger and Melnick, 1996; Enthoven, 1993; Kassirer, 1995; Chassin, 1997); between competition and health care system costs (Robinson and Luft, 1985; Robinson and Luft, 1987; Robinson and Luft, 1988; Zwanziger and Melnick, 1996; Zwanziger and Melnick, 1988; Robinson, 1991); and between competition and patient satisfaction (Miller, 1996; Brook and Kosecoff,

Over the years more healthcare organizations, like DaVita, Inc. and MedStar Health have increasingly expanded to become integrated healthcare systems through mergers, acquisitions, or joint ventures with efficiency and good performance by achieving a strategy of focusing on being more accessible with population health and providing high quality care at an affordable reduced, cost with a goal of keeping patients healthy with good medical outcomes.

Merger of Hospital A and B and its consolidation into PRMC was essential as Hospital A was crippled with losses for 3 previous years and was also forecasting losses in the coming year. Hospital B was struggling with an aging facility. Furthermore, given that both the hospitals were in the same community and therefore essentially serving the same community, they were competing both: for the same patients, as well as, the clinical staff. The merger, allowed the new PRMC to reduce the healthcare costs, address the shortage of healthcare personnel and improve the delivery of healthcare by reducing the duplication of services and providing wide variety of services to the small community of 60,000 in southeastern part of Idaho.

The greatest financial challenges to a health care provider are its revenue cycle and receivable management. The revenue cycle is the process that includes all the administrative as well as the clinical functions that are essential and important for capturing, managing, and collecting the patient service revenue whereas the receivable management deals with the planning, organizing, directing, and controlling the receivables. Therefore when all these are taken into account with proper measures they can serve well in making the health care provider sustainable in financial decision. Well if we look at the health care organization we can concatenate many of these who are actually available for the discussion of their alternative to the

The hospital has two primary external factors that it must appease. First is government needs and regulations. This contributed largely to why ‘A’ wanted the merger to begin with. The government was looking to reduce chronic care facilities and by merging with their larger cousin, their survival was more certain. The second external aspect is the business aspect, the reason that ‘B’ agreed to the merger. Despite their strong customer care, they were not business minded and as a result were facing potential bankruptcy. For the purposes of this analysis, the external environment is assumed to be outside the control of the hospital and is mentioned here due to its importance to the internal environment, which can be controlled.

One of the biggest industries in the United States is health care industry, which accounts for over 17.5 percent of the Gross Domestic Product (GDP) of the country. This big representation of the nation’s economic activities impacts the overall economy. In other ways, it’s also impacted by the general economy. While the health care industry continues to grow, transformational changes also continue to enforce change in its organizational structure. Change in organizational structure enables health care providers to make arrangement for the change. In this case, the overall health care providers’ advance in new medical technology (to provide the best quality services), financial system, and the entire health care service structure, rules,

In the short story “The Merger of Two Competing Hospitals”, we see both Porter Regional Medical Center and Banner Regional Medical Center reach an agreement to form a merger. Both Hospitals had at least one major current flaw and by teaming up they no longer had to worry about the aspect of competing with each other. PRMC faced the problem of annually losing large sums of money. While over at BRMC the problem laid within the infrastructure and not the problem of money.

There are many different forms of competition among health care organizations. Some of them are the prices of services, different co-pays someone will have to pay out of pocket, lower premiums, they have to be competitive in the quality of the service in which they perform daily. The health care competition is being advertised every day. The competitive nature of business cause them to reach out to the community. The health care industry has to fight for the approval of the community, the government, the insurance companies, the pharmaceutical companies and of course the stake holders as well as future investors.

Hospitals also compete for physicians by offering more highly trained supportive staff and/or better equipment. Hospitals are more likely to compete for patients by providing more services, better amenities, or discounted prices. There is a strong competition for cutting edge technology and medical talent locally and globally. Hospitals also have to compete for inclusion in insurer’s provider networks. Insurance plans compete for cost to payers, quality of provider networks, credentialing screening, and quality assessment procedures.

With each passing day the health care industry is experiencing an increase in participants due to its perfect competition nature. Due to this increase the industry participants, the industry has vicious competition which in effect leads to an increased in the cost of doing business. Smaller companies within the industry are hard hit by this competition due to their limited resources and therefore find it hard to remain relevant within the industry. Due to the looming threat of closure and liquidation, small companies must explore various strategies they may use to remain in operation. On the other hand large hospitals that are looking to eliminate competition and at the same time improve on their market share and in effect their revenues, merge with those that are struggling with low profitability. These mergers are beneficial to the smaller struggling companies since they provide increased savings on company overheads and availability of specialized machinery. Growth is also expected due to the increased market share as well as the good will already established by the large company. Contrary to popular opinion, mergers are not always between a large and a small company. In the healthcare industry two small companies may come together in order to pool their resources together and be in a position to compete against the large companies.