Massachusetts General Hospital Merger Case

In 1997 University of California, San Francisco (UCSF) merged its two public hospitals with Stanford’s two private hospitals. The two separate entities merged together to create a not-for-profit organization titled UCSF Stanford Health Care. The merger between the health systems at UCSF and Stanford seemed like a good idea due to the similar missions, proximity of institutions, increased financial pressure with cutbacks in Medicare reimbursements followed by a dramatic increase in managed care organizations. The first year UCSF Stanford Health Care produced a profit of $22 million, however three years later the health system had lost a total of $176 million (“UCSF-Stanford Merger,” n.d.). The first part of this paper will address reasons

Physician-hospital relations: Hospitals are having issues aligning themselves with physicians due to the fact that physicians tend to be individualists, lack of overall involvement of physicians, doctors tend to be the figurehead and not a subordinate, physicians see problems differently than administrators. These issues cause strain between the two parties and overall employment of physicians and various

According to Ingols and Brem (as cited in Swayne, Duncan, and Ginter, 2006), Massachusetts is known across the world for computer technology, education, and health care. In the words of the authors, Massachusetts' "health care expenditures per capita were between 27 and 29 percent higher than the national average from 1990 to 2000." At the time, there was a general consensus that Boston's health care was relatively expensive as a result of the region's cutting edge and high quality services (Ingols and Brem, 2006). During the 1990s, a number of healthcare insurance plans at the national level chose to merge in an attempt to further enhance their ability to compete effectively. This trend according to Ingols and Brem (as cited in Swayne, Duncan, and Ginter, 2006) was also replicated in Massachusetts where the eventual formation of three large competitors had far-reaching consequences. One consequence of the increasing power of these three formations in the marketplace was reduced payments.

The Stanford Health Services and UCSF medical center merger was projected to have a great turnout as it was supposed to be “enhanc[ing] the academic mission[s], strengthen[ing] referrals, and creat[ing] a more cost effective teaching hospital” (Sjoberg, 1999). The two competitors joined forces in hopes that it would alleviate the pressures of the new managed care systems by merging resources and acquiring more bargaining power. Stanford Medicine and UCSF came together at a time when many other academic health centers were looking to improve their negotiating powers with healthcare plans and physician groups. The merger offered hope to UCSF and Stanford by strengthening training programs and offering innovation plans as well as financial support.

In the Harvard Business School case study of Intermountain Health Care (IHC), we learned about the efforts made by IHC to adopt a new strategy for managing health care delivery that is focused on improving care quality while simultaneously saving money. Beginning in 1986 as a series of experiments tying cost outcomes to traditional clinical trials, IHC’s approach to delivering care became known as “Clinical Integration” which “referred to both an organizational structure and a set of tools” (Bohmer, 2002). The organizational structure required a departure from the traditional administrative management model to one that “involved administrative and medical

A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate

Mountain States Healthcare, or MSH as we will continue to refer to it in the rest of the paper, started off as a single hospital in Salt Lake City, Utah. When MSH began to become more profitable and successful, their board of directors decided to begin purchasing other hospitals in the tristate area. MSH ended up being wildly successful after the merger. All of the different installations were treated as different subsidiaries, all falling under the same executive management. After some time, however, managers and shareholders realized that some of its administrative costs were much higher than other medical facilities of similar comparison. In response to these revelations, MSH decided to hire a consulting firm to analyze where costs could

One of the goals of the Affordable Care Act (ACA) was to reduce healthcare spending in the US (DeMichele, 2015). However, the passage of the ACA has spurred activity that is counter to this goal of decreased spending in the form of increased hospital consolidation which many studies show has led to higher prices. While, there are many other effects of hospital consolidation such as the impact on quality of care or innovation, these topics are beyond the scope of this paper.

- Internally, the medical profession has been weakened through an oversupply of doctors and the fragmentation and lack of success in resisting government controls of its labor union. Because health

As progress was made in medicine gradually with new medical technologies which could only be used in the hospitals, doctors started charging more, which was unaffordable for most people, with time, all this started to change as the industrialization of the American economy caused families and people to start relying on services from doctors and the

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.

At the time in 1984 only 2% of the prescriptions filled where through mail-order dispite having been available for nearly 40 years (Medco).

As a health administrator, my priority is to make sure the patient get a good health care which is the value for the money and affordable to all the citizens from all walks of life. Therefore, bargaining for the prices is a welcome initiative since the hospitals is not a profit making institution. Furthermore, all the human beings do not have the same income. This makes it rational to negotiate for prices to make sure the system cover all the patients. Thus, as administrator my first reaction is to listen to the suggestions given by the patients and other organization to get their point of view as to why they think the prices should come down.

The Massachusetts General Hospital is a healthcare hospital located in the West End neighborhood of Boston, Massachusetts and is proclaimed to be one of the leading healthcare providers in the nation, with it having the prestige of being the original and largest teaching hospital of Harvard Medical School and a biomedical research facility and the largest healthcare provider in Massachusetts. When first observing the website, one of the main things that is stated on the first page and is clearly stated in big bold letters is the proclamation of the achievement that the hospital holds. It is stated that the Massachusetts General Hospital has been named among the top hospitals in America and it has been ranked among the top three of hospitals

First, the objectives across the two accentuated the debacle. Public hospitals are regulated to offer services, while the private counterparts are profit-driven. The state-owned services are invested in serving the community, which led to cheap services. On the other hand, private institutions set prices and extent of services to suit revenue objectives. Moreover, the owners created different tiers of healthcare to suit one’s budget. However, the structure is biased to force people to spend more for “quality healthcare.” Therefore, people are likely to miss quality care in private sector because one could not afford the exorbitant fees in the industry. Therefore, the private hospitals exploited the public on a service that should be based on the ideals of the public contingent.