case studu The Merger of Two Competing Hospitals-Case for Chapters 5, 2, and 12

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case studu The Merger of Two Competing Hospitals-Case for Chapters 5, 2, and 12 Mary Anne Franklin, Dale Mapes, Audrey McDow, and Karin Mithamo This case highlights the process of merging two fully accredited hospitals, both of which have a full omplement of state-of-the-art diagnostic technology, including MRI and CAT scanners, 24-hour physician-staffed emergency care centers, and specialized women's centers. Both of these facilities are located in a community of 60,000 in the southeastern part of Idaho. The success of the merger hinges on the timely resolution of several issues that the executive staff implemented, mutually enhancing solutions in the areas of: (1) leadership, (2) culture adaptation, (3) human resource management, (4) staffing, and (S) benefit issues Overview Hospital A: Porter Regional Medical Center (PRMc) Located on the east side of town, Porter Regional Medical Center (PRMC) was a for-profit hospital, consisting of 110 hospital beds, 8 of which were reserved for transitional care. PRMC was a privately owned facility. Mountain Health Care (MHC), a large healthcare organization in the Rocky Mountain region, owned the facility. Built in 1990, the facility was designed to efficiently handle patient flow from the emergency room to the pharmacy and to be a point of referral for more complicated patient conditions. PRMC services consisted of general and same-day surgery and full-service rehabilitation and radiology departments. Other services included a kidney dialysis center, on-site retail pharmacy, a regional Red Cross blood bank, 24-hour laboratory, home health, Infusion/Home IV, and a women's center, including obstetrics and numerous other amenities Other assets owned by PRMC were the adjacent medical office buildings, a day care center, the land on which an assisted living center was located adjacent to the hospital, and the sports medicine complex adjacent to the state university's arena. These assets represented 188,000 square feet of facility space housed on 63 acres. The hospital employed 450 personnel. Last year, the hospital's operating budget was $34 million. However, in the same year, the hospital experienced a $1 million loss, and a projected $500,000 loss was anticipated for the following year. After three years of red ink, PRMC decided to liquidate. Hospital B: Banner Regional Medical Center (BRMC) and Turner Geriatric Center Built in 1951, Banner Regional Medical Center (BRMC), a county-owned hospital, was located on the west side of town. The hospital structure included 154 inpatient beds and a geriatric healthcare center that consisted of 100-106 beds, 13 transitional care beds, and 7 rehabilitation beds. A medical office

Explanation / Answer

As the hospitals are merging both CEOs should find the core values of the new company, it is important for any organization. PMRC and BRMC’S to find out best working culture for the new organization. And should try to retain old employees from the previous organization. Need to compare both organizations mission and vision to find out common vision for new organization. As 1200 employees are part of new organization, management should motivate or educate them about new organizations core values. Also should provide enough training and time to adapt new culture or the organization. Consolidation usually leads fear in employees mind. CEO of PMRC, should conduct meeting with all the employees to understand their issues, so that they can avoid people leaving the organization. Also should create a proper document on new benefit packages, job seniority etc, because that is the biggest motivation to the employees. If new management care about 1200 employees, automatically they will give more productivity. If employees are happy, then performance or productivity will increase. So new management should create a very positive environment in the organization.

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