How Mergers Affect The Health Care Industry

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Mergers have become normal practice in the health care industry by creating a larger hospital system that provides broader services with the focus on lowering healthcare cost and being economically profitable with keeping in line with regulatory guidance. A merger happens when two or more organizations agree to join together and become one organization. One or more organizations essentially must dissolve for this to happen. Sometimes both organizations dissolve and take on a completely new name as in this case of the merging of the two competing hospitals. (McClure, n.d.) Hospitals along with health systems are following the same trend to merge with other hospitals, this movement has continue to gain momentum and appears to be the future trend in the health care industry due to high operating hospital cost. In a survey done in 2012 regarding hospital maintaining independence only 13% plan not to align with other hospitals or health care systems, while the other 87% plan some type of merger with another hospital or health care system. (Hospital Mergers and Acquisitions, 2013) Healthcare organization is constantly making changes to operate at their optimal functional level and budget. There are different ways it can be determined what and where adjustments are needed to be made within the organization. A common technique or strategic plan involved is the SWOT analysis. This technique involves a discussion about the strengths, weakness, opportunities and threats in an
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