Hospital Services Amalgamation and Its Outcomes Essay

The process of hospital merging has some benefits and drawbacks. While the benefits of developing such a plan may help health care providers to save money and devote their financial and material resources towards a more profitable business structure, political and social ramifications of this decision may negatively affect the situation in the local community.Hospital Services Amalgamation and Its Outcomes Essay.  This paper aims to explore the outcomes of a strategic plan that describes a process of the hospital services amalgamation with a condition of job loss for a thousand workers, including seventy management positions and six hundred and fifty nursing and staff positions.

Economic Ramifications

The economic ramifications of this plan may vary depending on the efficiency of the developed program. On the one hand, a smaller number of hired personnel may help the merged hospitals to lower expenses connected to workers’ compensation and benefits. Moreover, the process of hiring and developing a management structure should also be cheaper. However, according to Holmes (2015), many hospitals that underwent a merger, experienced a further loss of finances due to the lack of a proper managing structure. Furthermore, some hospitals that decided to merge due to their low profitability reported that their financial situation only became worse after the amalgamation. Postma and Roos (2016) note that a merger often happens under the pressure of insurers and competitors that usually concentrate on financial matters of the services. Therefore, the result of a merger does not bring the desired results because the hospitals that have been acquired remain inefficient and unprofitable.

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Social Ramifications

Social ramifications are largely connected to the process of firing personnel. A community that encounters such an amalgamation may suffer from a higher unemployment rate, which may, in turn, lead to greater levels of competition. According to Holmes (2015), hospitals are one of the biggest employers in many communities. Therefore, the amalgamation of hospital services followed by an excessive job reduction can significantly affect the situation of job markets on the local level. Moreover, the satisfaction of patients may also change. The lack of personnel implies that services of most hospitals become less accessible to members of the community. Therefore, these medical establishments may encounter a problem of low customer satisfaction. On the other hand, Lim (2014) writes that the levels of job satisfaction for staff may rise. According to this study, mergers of hospital services may positively affect staff members that remain at the working establishments because their positions become more valuable than before. Hospital Services Amalgamation and Its Outcomes Essay. However, the negative social impact of amalgamations is undeniable as well. Many workers, especially nursing and medical professionals, that lost their jobs may find themselves in a difficult position.Hospital Services Amalgamation and Its Outcomes Essay.

Political Ramifications

Finally, political outcomes of this strategic plan may include the growing dissatisfaction of citizens with the current political figures. Health care is considered to be one of the most important areas of service that can be accessed by individuals. Therefore, citizens’ attention to the quality of health care services remains high (Postma & Roos, 2016). If a hospital becomes more efficient and accessible for patients, the amalgamation will result in clients’ satisfaction rising to a better level. However, if the merger results in multiple establishments becoming even less stable and reliable than before, then citizens’ negative reaction may spread to the positions of political leadership in this area.Hospital Services Amalgamation and Its Outcomes Essay.

Conclusion

All in all, the ramifications of a hospital services merger may affect the community as a whole as well as its individual members. Furthermore, the unstable results of such amalgamations may negatively influence the economic position of hospitals, the political situation in the area, and the levels of customer satisfaction.

References

Holmes, M. (2015). Financially fragile rural hospitals mergers and closures. North Carolina Medical Journal, 76(1), 37-40.

Lim, K. K. (2014). Impact of hospital mergers on staff job satisfaction: A quantitative study. Human Resources for Health, 12(1), 70.

Postma, J., & Roos, A. F. (2016). Why healthcare providers merge. Health Economics, Policy and Law, 11(2), 121-140.

When the size of an organization continuously increases in size, management problems arise. Such large organizations operate through bureaucratic structures. The main factors that make bureaucracy work are standardization, co-ordination and specialization. Bureaucratic structure is very efficient in achieving economies of scale and avoiding duplications. The bureaucratic structure works best when there are clear rules of coordination and a clear chain of command (Cameron & Green, 2004).Hospital Services Amalgamation and Its Outcomes Essay.

The history of company mergers and acquisitions dates back to the 1980s. The most common practice for organizations to counter-act aspects of competition was through the adaptation of technology. Nevertheless, recent research has shown that sophisticated technical expertise is not enough to contain competitive advantage. Elusive resources like culture, organizational leadership, and business processes are also crucial. Through mergers and acquisitions, companies are able to manipulate their own influence by adhering to a series of principles. This paper takes a tour into the nature and form of mergers and acquisitions. The paper employs a case study that includes ananalysis of a specialty health care business. The management plans to establish a clinic with the following departments: heart disease, gynecology, dermatology, respiratory diseases, and surgery (DePamphilis, 2011). The management of the clinic has contracted my organization to offer advice for the merging and acquisition process.

Merging aims in combining two existing models. This results to the creation of a new model.Hospital Services Amalgamation and Its Outcomes Essay.  The new models reflect the activities and principles of the incorporated models with the aim of sharing risks as well as profits. Mergers and acquisitions help to deal with constraints like bankruptcy.

A merger refers to the situation whereby two firms combine on an equal basis. The initial stocks are retired and new ones issued. Usually, the name of the new company is sourced either from one of the parent companies, or from an amalgamation of the two. The result of merging is that one of the parent companies emerges as the dominant management. Because of economic constraints, it is becoming crucial for companies to commit to mergers (Habilozek & Kovacich, 2005).

There are disadvantages and advantages associated with the phenomenon as discussed at this section. Merging and acquisition are beneficial because they enable the firms involved to increase their gross income. A merger takes place when two firms come together to form one large firm. The resultant firm will experience a reduced level of competition as reflected in its augmented market share. The reduced competition could be unfavorable to the public interest. This forms a platform for the company to generate more profits. Nevertheless, mergers could help the public enjoy economies of scale benefits. This is through the reduction in prices that effect from a reduction in the average costs of the firm. A large firm produces a high level of output resulting to economies of scale. The economies of scale emanate from bulk buying, lowered rates of interest for large companies, a centered secretariat and technical economies through the creation of significant fixed costs. Another advantage of mergers is that it aids in dealing with the threat of international competition brought about by multinational companies(Miller & Amihud, 2007).

Mergers promote the rise of monopolists in the market. A large firm could exhibit monopolistic forces, leading to lower quantity, a reduction in consumer surplus, and higher prices resulting to allocation of inefficiencies. The reduced competition can result to less investment in innovative products, with inferior quality traits. Mergers could also result to job losses. The new firm hires and fires employees in its quest to accommodate new preferences. Hospital Services Amalgamation and Its Outcomes Essay.

As a basic principle, acquisitions and mergers represent a loss of value to shareholders. This means they are cost accretive, avoiding the shares of the acquiring company. Nevertheless, the possibility of moneymaking ventures in the demerged organizations is high. A merger and an acquisition are distinct to some extent. Mergers are uncommon as they take place between two companies that imitate each other in terms of reach and size. Both companies give up their identities to form a new brand. An acquisition takes place when a bigger organization purchases a smaller organization. This takes place regardless of the smaller company’s willingness or cooperation. The common motivations are gaining market share and reach, economies of scale, and eliminating a competitor. The main demerit of acquisition is that they fail because of cultural mismatches. Every organization is oriented in the course of time by the background and vision of its management or promoters. This is referred as “company culture” and reflects the way companies project themselves in the market, their social responsibilities, integrity and commitment, and their mode of operation (Page, 2003).

It is difficult for two companies to carry out their transactions the same way. Hospital Services Amalgamation and Its Outcomes Essay. This is despite the two operating within the same sector. When one company buys the other, their cultural differences become evident. This results to losses in key personnel alongside with priceless intellectual property and a customer base (Page, 2003).

The pressure for better healthcare is mounting. Healthcare dealers must choose either to improve on their efficiency or risk being irrelevant. Organizations are forced to pay focused attention to intricate and costly therapies and treatments. Handling these specialized areas (dermatology, gynecology, heart disease, respiratory disease, surgery, and gastroenterology) requires specialized capabilities that call for extensive investment. For most companies, the chance to explore the modern patient dynamics and unique quality of healthcare opens the door for mergers and acquisitions. The market strategyof merging and acquisition would enable the hospitals acquire sophisticated equipments. This would come in handy when dealing with the modern demands of the medical world. Merging and acquisition would also lead to a reduction in overhead managerial expenses (Sherman, 2001).

Doctors moving into larger groups and sharing that quality coverage will have their quality of life improved. When merging occurs, the combined entity will be able to use physician extenders to their maximum capacity. Successful mergers will generally infuse into the entire group consequently leading to a stronger united group. Such a group will be better equipped in dealing with competitive pressures in the current health care environment.Hospital Services Amalgamation and Its Outcomes Essay.

Combining two or more health facilities will lead to such facilities benefiting from acquiring equipment that is more sophisticated and that that reduces managerial costs (Sherman, 2001). In addition, there would be a reduction in competition. Merging of the healthcare facilities would discourage costly duplication of technology and staff. The resultant health facility would be able to utilize the available space properly by transferring some services to its “underused” merger partner.

Doctors moving into larger groups and sharing that quality coverage will have their quality of life improved. When merging occurs, the combined entity will be able to use physician extenders to their maximum capacities. Successful mergers will generally infuse into the entire group consequently leading to a stronger united group. Such a group will be better equipped in dealing with competitive pressures in the current health care environment (Habilozek & Kovacich, 2005).

Bringing together two or more health facilities may also have some shortcomings, which include reduced morale of personnel; as they will feel insecure about their jobs. Difficulties will also arise in changing a professional bureaucracy. Physicians and nurseswill have difficulties in accepting decisions taken by others regarding their working conditions. The professionals have their own working practices, demands for quality and ethical rules. Their loyalty towards their employer is less than their loyalty towards their own colleagues.

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Through a SWOT (strength, weakness, opportunities and threats) analysis, the feasibility of the resulting company could be determined. Hospital Services Amalgamation and Its Outcomes Essay. Through an extensive feasibility study of the company after the merging and acquisition process, my organization can confidently offer advice to the client (the management). The assessment is carried out on a sketch design, to determine whether the managements of the companies posses the technical expertise to bring he project to completion. The healthcare specialists need guidelines on how to set up a successful healthcare specialist hospital. The hospital need sub-division into specialized departments thus the need for superior technology. The specialists also need to place special attention to staff morale. Professional advice would dictate that the management should come up with strategies for boosting employee morale before the acquisition process. The business needs a complete makeover. The management needs new partitions for the hospital. The partitions represent specialized departments to feature in the strategic plan. Hospital Services Amalgamation and Its Outcomes Essay. The new departments could have been absent in the previous business unit. Before commencing operation, the management should identify internal and external problems (threats). The internal ones like under-paid staff, inferior technology, and others handled through internal measures and controls. The management could contract experts to address their external problems for a successful take-off of the investment. The merging and acquisition process would lead to expansionof the company. This would form a brand with added strength in the market. A company that has undergone a merging and acquisition process would have its market shares increased. This will occur at the expense of a… Hospital Services Amalgamation and Its Outcomes Essay.