HOSPITAL MERGERS

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HOSPITAL MERGERS

HOSPITAL MERGERS

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In an era when the healthcare industry is facing a turbulent time due to the rising cost, mergers and acquisition have become the order of the day.  In the last two decades, the hospital industry has undergone remarkable changes since the federal government undertook a policy reversing expansion of the hospital industry (Minchin, 2001).  The cost of health care has increased by more than two thirds and hospital mergers have become a solution to increase efficiency and cut cost of operation.  Although merger is seen as a marriage that would improve efficiency of a hospital, it has been reckoned that a merger is more like a divorce than a marriage (DePamphilis, 2008). However there is a positive side in every merger.  The main reason behind the increased merger of hospital is to increase their efficiency or market consolidation. This emanates from the fact that as the cost of health care rises, the population is finding itself disadvantaged and most cannot afford health care.  Mergers therefore assist hospital to utilize the junior doctors like registrars and in taking many other cost reduction measures.    In most cases, the merging hospital find themselves entangled in vulnerabilities, sensitivities, suspicions and  redirection which makes them prone to loss of their initial direction and workers morale. Most often, there is a high probability of communication breakdown contributed by lack of time for common clinical practices. Mergers are therefore not made in heaven and they are prone to more troubles than success if not well managed.   For merging hospitals, there have to efforts to ensure full integration of management and cultures of the merging parties if they have to succeed.