case studu The Merger of Two Competing Hospitals-Case for Chapters 5, 2, and 12
ID: 420322 • Letter: C
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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 accredited hospitals, both of which have a full logy, including MRI and CAT scanners, 24-hour This case highlights the process of merging two fully complement of state-of-the-art diagnostic techno located in a community of 60,000 in the southeastern part of Idaho. The emergency care centers, and specialized women's centers. Both of these facilities are success of the merger hinges on the timely resolution of several issues that the executive staff human resource management, (4) staffing, and (5) benefit issues mutually enhancing solutions in the areas of: (1) leadership, (2) culture adaptation, (3) Overview Hospital A: Porter Regional Medical Center (PRMC) Located on the east side of town, Porter R consisting of 110 hospital beds, 8 of which were reserved for transitional care. PR owned fac 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 egional Medical Center (PRMC) was a for-profit hospital, MC was a privately ility, Mountain Health Care (MHC), a large healthcare organization in the Rocky Mountain conditions. PRM C 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 assiste 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. d living center was located adjacent to the hospital, and the sports medicine complex Last year, the hospital's operating budget was $34 million. However, in the same year, the ho ienced 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 officeExplanation / Answer
What can administrators or boards do to reduce staff fear before, during, and after the merger?
1. COMMUNICATE TO REDUCE FEAR
The moment employees learn about a merger, fear, uncertainty, and doubt usually take hold. Your first communications priority is to answer the “me” questions. What does this mean for me? Do I still have a job? Who do I report to? If you don’t have answers to those questions, tell employees when you will. Until the “me” issues are addressed, employees will have difficulty focusing on work.
2. COMMUNICATE TO WIN HEARTS
Once you’ve addressed the uncertainty, your next communications priority is to start “selling” the deal internally. You need to share the rationale for the deal and a vision that employees can buy into. Good communication is not just a one-way push of information down. Communication depends on people absorbing the information and ending up on the same page. A two-way dialog is useful here. You’ll know your “selling” is done when employees have confidence in and allegiance to the newly merged organization.
3. COMMUNICATE ON MULTIPLE CHANNELS
Face-to-face communication is the best, but there are practical limitations on the number of meetings that can be held. Jessica Tyler, a senior manager with American Airlines that worked on the merger with US Airways, comments on the range of communication channels they used for their merger: We do email, webinars, and phone calls, and we have digital and print versions of our employee magazine. We use posters and TV monitors in break rooms. We also do customer letters and media. But the intranet is the hub for most of the communication.
Intranets or secured merger websites are invaluable for merger communications, as they allow employees to consume information on their terms. They support interactive communications, such as Q&A forums, and they support fresh, consistent content dissemination on a 24/7 basis.
4. COMMUNICATE RELENTLESSLY
According to merger integration consultancy Pritchett, “Silence is deadly. It only leads to rumors and speculation, giving a voice to the typical 30% of the people in the target company who oppose the merger.”
So communicate without let-up. When there is no new news, share the dates when information will be available or when decisions will be made. Share the same information repeatedly–your message has to be heard multiple times before it’s truly digested. In a merger situation, there is no such thing as too much communication.
Ultimately, the goal of merger communications is to win the hearts of employees. Long after close, you need to continue to sell the deal internally. As employees buy into the deal rationale and the common vision and values, they become engaged. And engaged employees don’t quit
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