The Merger of Two Competing Hospitals: A Case Study

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 clinical and managerial interventions.

Background

Based on the case study provided: Hospital A, Porter Regional Medical Centre (Hosp. A) & Hospital B Banner Regional Medical Centre and Turner Geriatric Centre (Hosp. B) merged to form a consolidated entity named “Portsmith Regional Medical Centre” (PRMC). Both Hospital A and B were fully accredited hospital, with “state-of- art diagnostic technology” which included MRI and CAT scanners, 24-hour physician staffed emergency centers. Both Hospital A and Hospital B are located in a small community of 60,000 people in southeastern part of Idaho.

Hospital A before the merger was a for-profit hospital, relatively new facility, in east side of town. It consisted of 110 hospital beds, 8 of which were reserved for transitional care. Services provided were: general surgery and same day surgery, full-service rehabilitation department and radiology department. Other services included kidney dialysis center, on-site retail pharmacy, blood bank, women’s center e...

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