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

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

Some hospitals have merged with other healthcare organizations in hopes of providing a more integrated delivery system. However, delivery in many organizations is still quite fragmented leaving many US citizens dissatisfied. According to a 2011 survey conducted by the Commonwealth Fund;

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.

From 1991 going forward, the health care environment again experienced fundamental changes as a result of the deregulation of hospitals which according to Ingols and Brem (as cited in Swayne, Duncan, and Ginter, 2006) was occurring for the first time in a decade. According to the authors, the impact of the move was immediate. Following the deregulation, the financial viability of most hospitals was

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

- 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

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

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.

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

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.

Cost is the driver that will most likely cause healthcare organizations to merge. Most healthcare organizations have issues with spending. Most industries today are faced with a variety of obstacles in achieving or remaining profitable. The healthcare industry is no exception. Profitability is enough of a challenge under normal circumstances, but especially so during fragile economic times. Uncertain revenue streams and rising costs have many healthcare organizations understandably apprehensive.

Controversy has become a staple part of modern society. The premise of various developments stemmed from debatable factors affecting progression or the end-product of a situation. The Private and Public hospitals epitomized this problem as both service groups are, in theory, meant to operate in the same manner. The nature of the two is controversial because each is governed by different ideologies that have contributed to communal problems. Consequently, the overlooked variants may be the catalyst for the imbalanced construct of the healthcare industry. Solving the disparity can become the solution to creating the better Medicaid and quality services that match the cost of healthcare.

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.

Modern society has developed formal institutions for patient care. The hospital a major institution offers considerable advantages to both patient and society. Number of health problems requires intensive medical treatment and personal care which normally can’t be available in patients home or in the clinic of a doctor. This is possible only where a large number or professionally and technically skilled people apply their knowledge & skill with the world class expertise advanced sophisticated equipment and appliances. The excellence of hospital services depend on how well the human and material resources are utilized to promote patient care.