case Studu The Merger of Two Competing Hospitals-Case for Chapters 5, 2, and 12
ID: 420304 • Letter: C
Question
case Studu The Merger of Two Competing Hospitals-Case for Chapters 5, 2, and 12 Mary Anne Franklin, Dale Mapes, Audrey McDow, and Karin Mithamo This case highlights the process of merging two fully accredited hospitals, both of which have a full complement of state-of-the-art diagnostic technology, including MRI and CAT scanners, 24-hour physician-staffed emergency care centers, and specialized women's centers. Both of these facilities are located in a community of 60,000 in the southeastern part of Idaho. The suc implemented, mutually enhancing solutions in the areas of: (1) leadership, (2) culture adaptation, (3) human resource management, (4) staffing, and (5) benefit issues. ccess of the merger hinges on the timely resolution of several issues that the executive staff Overview Hospital A: Porter Regional Medical Center (PRMC) Located on the east side of town, Porter Regional Medical Center (PRMC) was a for-profit hospital, consisting of 110 hospital beds, 8 of which were reserved for transitional care. PRMC was a privately owned facility. Mountain Health Care (MHC), a large healthcare organization in the Rocky Mountain region, owned the facility. Built in 1990, the facility was designed to efficiently handle patient flow from the emergency room to the pharmacy and to be a point of referral for more complicated patient conditions. PRMC services consisted of general and same-day surgery and full-service rehabilitation and radiology departments. Other services included a kidney dialysis center, on-site retail pharmacy, a regional Red Cross blood bank, 24-hour laboratory, home health, Infusion/Home IV, and a women's center, including obstetrics and numerous other amenities Other assets owned by PRMC were the adjacent medical office buildings, a day care center, the land on which an assisted living center was located adjacent to the hospital, and the sports medicine complex adjacent to the state university's arena. These assets represented 188,000 square feet of facility space housed on 63 acres. The hospital employed 450 personnel. Last year, the hospital's operating budget was $34 million. However, in the same year, the hospital experienced a $1 million loss, and a projected $500,000 loss was anticipated for the following year. After three years of red ink, PRMC decided to liquidate. Hospital B: Banner Regional Medical Center (BRMC) and Turner Geriatric Center Built in 1951, Banner Regional Medical Center (BRMC), a county-owned hospital, was located on the west side of town. The hospital structure included 154 inpatient beds and a geriatric healthcare center that consisted of 100-106 beds, 13 transitional care beds, and 7 rehabilitation beds. A medical officeExplanation / Answer
Answer : The major foreseen complications can be listed as below:
1. Leadership conflict: The leaders of both the organizations had different approaches and management style to govern their organizations. For the merged organization it would be difficult to follow a common leadership style with the same leaders frm both the organizations trying to impose their own style..
2. Organizational structure and strategy: One organization had a more centralized structure and less or almost no power was vested to the individual departments/entities. Everything was decided by the corporate office, rather autocratic. While the other organization was less structured and was decentralised, autonomous and self governing. Post merge it would be difficult to determine the ideal organizational structure and strategy to manage the merged entity
3. Staffing issues: The existing staffs had to compete for same positions. Many positions were being restructured and there were alignment issues with respect to staffing.Many opted for voluntary exit and many were left with fears and apprehensions.
4. Compensation and benefits disparity: The restructured compensation and benefits would be lucrative to some and for other it might be dissapointing. The individual benefits and compensation structure for each of the organizations was framed considering the preferences of larger groups within the organizations . However the management now has to follow a middle path and strike a judicial balance so as to fairly commpensate the merged workforce
5.Cultural differences: Both the organizations had different cultures , beliefs and sense of belongings and were governed by different sets of rules whch they were very musch accustomed to over several years. Post merger working together under a common roof with arch rivals would be a mentally agonising and difficult task day in and day out for the staff.
6.Specialization and orgnaizational focus: Both the hospitals were specialised in different domains and their entire operational strategies and budgets were geared towards stremlining the operations in that direction. However post merger there would be serious challenges in budget allocations and prioritization of specialization. This is like adouble edged sword which if properly managed can act as a USB and can complement each other.
7. Quality and cost of service: The quality of service would suffer during the transition . But more importantly the patients would face the challenge of no having no place for alternate treatment and in the absence of any competition the cost of health care services would also burgeon.
8. Operational inefficiencies: First of all geographic isolation of the facilities and entities of the merged organization could pose serious logistics challenges.It would also be difficult to manage such a huge portfolio of services and there will be a requirement to frame new SOPs to streamline operations for the merged entity. Physicians would have their own preferred brands and suppliers . It would be difficult to compel them to accept common set of suppliers and brands .
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.