Post Merger Analysis Name Institution Introduction Consolidation of health care institutions has remerged again in the contemporary market place after the unprecedented peak in the late 1990’s. Mergers and acquisition are becoming a norm in this industry. However, the reasons for merging differs quite significantly with those of the 1990s . The earlier consolidations were majorly a response to pricing pressure from managed care penetration, while the trend being experienced at the moment is attributable to multiple causes. Various key financial drivers have been attributed to the current wave of mergers and acquisition in healthcare. Key financial drivers for mergers Hospital Reimbursement reductions and changes The revenues …show more content…
One of the key factors is setting a new vision for the merged institution. The management of the new firm need to come up with a vision that will guide the workforce in carrying out different tasks in the institution. As espoused by Eugene Brigham, (2007), for a merger to be able to bring positive outcomes in terms of shareholder value in the organization, it need to have a clear and realistic vision. In generation of the vision, it is important for everyone to be involved so that they can own it. Another factor driving financial planning in the post merger phase is implementation of new shared corporate culture and management culture. The management in the merged organization need to put in place both the shared corporate and management culture from the two entities. This is critical in avoiding the rise of discrimination from the organizations that have formed the merger. Another important factor is bringing together the formerly separate units from the two or more organizations involved in the merger. This is to make sure that activities are performed in an efficient and effective way. This is realized through the sense that two groups from two separate organizations are able to work together as a team and also by availability of resources in the merged firm (Carleton, …show more content…
If the organizations are able to attain this, the overall financial position in the entire industry will improve. With the ACA slowing the rate of acquisition in 2009, it is expected that this pace is likely to gain momentum once again in reforming the healthcare. With increase in risks in the industry, the next five years are likely to see the need to risk sharing and this will promote more formation of mergers and acquisitions. Huge healthcare entities will be exploited sufficiently to be able to continue with
Bigger hospitals increasing market share Loss of Medicaid and Medicare reimbursement Decline in revenue Loss of patients
Consolidation within health plans has included several large scale mergers such as Anthem and Cigna as well as Aetna and Humana, primarily driven by a need for growth, with a particular focus on growth within the Medicare Advantage market. If successful, the deals would collapse the health-insurance industry’s top five players into
In the year of 2005, the companies eventually found a way to make it easier for the companies to combine without having any major issues or problems. Unfortunately, around the year of 20010 the merging com...
...lenge in the operation of the organizations since there are more clients to be dealt with than was the case before merger. The FTC-UHS merger is also a challenge since there is only one management of all the clinics run in all the countries where other individual organizations were situated; there is need to improve on the management schemes.
Hospital Corporation of America (HCA). Staff Analysis Statement of Problem HCA, after following a conservative financial policy since its establishment, has entered the new decade preparing to make some changes in order to realign their financial strategy and capital structure. Since its establishment, HCA has often been used as a measure for the entire proprietary hospital industry. Is it now time for the market to realign their expectations for the industry as a whole? HCA has target goals that need to be met in order to accomplish milestones in the future.
The purpose of this paper is to attempt to recompile information about the merger of two corporations; one of many taking places i...
Introduction Mergers and acquisitions are some of the popular techniques that businesses employ to gain a competitive advantage (Kluyver, 2010). A merger refers to an agreement that allows two companies to combine their resources in a bid to dominate the market. An acquisition describes a situation where one corporate purchases another company as part of its overall strategy to conquer the market. Normally, the company being acquired is small than the purchasing corporation.
That brings a great challenge to succeed, and lets the leadership work in new and innovative ways to make such a merger successful. McClelland’s theory states, in regards to the need for achievement, that people strive “To excel one’s self.to rival and surpass others. to increase self-regard by the successful exercise of talent” (Kreitner & Kinicki, 2010, p. 215). By this definition, the merger would motivate leadership to excel in the face of a challenge, and to increase their professional self-regard in their success in doing so. On an individual level, you are asking the performers and employees to recognize both economic and social climates, and to come together in action to save both their careers, as well as their passion for life....
This memo is to advise solutions for improving the likelihood the new organization will be successful. The major obstacles to the success of the merger are individual and organizational forces. Such forces encompass organizational structure, the mission and vision, and organizational culture. Other obstacles include poor communication.
Almost immediately, in the attempt to consolidate, these services are placed under a hospital outpatient department (HOPD). Makes sense as why would you have two different agencies doing the same thing? However, the HOPD collects a much higher payment for the service as they are “allowed” to under hospital pricing regulations as a method to offset the higher cost of hospital services. In this scenario, the price of a “product” goes up even though the location and service provided do not change. Playing this out, we are now beginning to see payers saying they will not pay these higher fees.
Additionally, the company incorporate can recognise the differences of culture and come out with solutions during the merging period in order to accomplish a success alteration. Moreover, reducing internal conflicts in the workplace will lead to an increment of effectiveness from the employees so that the employees can focuses more on contributing good performance within the organisation. Hence, hybrid structure results in growth of output and increases the profits of business. As an evidence, the Disney company with hybrid structure shows their good social relation with its employees as their motto is to treat its employees like customers through good communication and they appreciate their effort with the best
Providers realize their long-term survival will rest on becoming part of a larger organization, This can be possible by either joining an current network or creating a new one, because the current organization’s suppliers and payers are becoming better and stronger. Organizations who are standing on their own simply do not have much knowledge, good resources and power of the market to survive on their own. Nearly all the larger entities created over the past few years have been created through horizontal integration — formal affiliation with other economic units producing the same goods & services. Through economies of scale Horizontal networks of hospitals can lower their costs, but they do not essentially respond to the growing number of noneconomic threats such as scientific and technological growth; purchasers' growing demands for value; and consumers' needs for affordability, convenience and informed choice.
Health care service providers compete on four different unproductive kinds of competition. First is annual competition to enroll more subscribers for health plans. It not only restricts the network for the payer but also its goal is not to provide value for the long term as the subscription is only for one year. Second is to give deep discounts to payers or employers to have increased flow of patient population just because they are associated with large companies. It is not economical because it takes same resources and cost for hospital to treat discounted patient and a self-employed patient.
It is difficult when acquiring intangibles, such as intellectual capital, to motivate employees of the target to stay on post-merger. Employees of the target may feel alienated or threatene...