Monday, March 11, 2019

Why some health system mergers fail, while others succeed

Healthcare mergers are focused on three keys: cost efficiencies, culture compatibility, and systems integration.  A failure in any one of these areas can doom the merger.

A successful merger will reduce operating costs and improve margins.  This is very good for stakeholders.  For patients and the community, it depends on the circumstances.  If the hospitals were relatively healthy and now, through reduced competition, keep prices high and don't pass any of the cost savings on to patients, it can impact the community negatively.

On the other hand, if one or both hospitals are weak financially, and in danger of cutting back service, then a merger to create a more financially healthy hospital will benefit patients and the community.