Post Merger Analysis: Consolidation Of Health Care

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Post Merger Analysis
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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

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