Merger Recommendation Report

Merger Recommendation Report

Introduction

Integrating with Skyline Health Services seems

lucrative since Country Hills Hospital will widen its market share and increase

is power. Considering a merger would also give the hospital enough room to

improve on quality deliverance and reduce operational cost. On the contrary, a

merger would make resource allocation far from the rural health facility and in

turn limit accessibility. Staff and patients will have to commute to the city

for employment and health services. The rural area population is manageable

with an average income in homesteads which gives only a few citizens economic

sustainability. With $17, 567 per capita income, most citizens live below the

poverty line both the aged and the youths the unemployment rate of the area is

4.3 percent.

Conceptual Framework

The two hospitals operate in two different economic

zones, in case of a merge there is a possibility of the less fortune hospital

to completely become submerged to the extent it gets out of market. Medical institutions

are supplied with staff dependence on the area population and the rate of

medical visits, as noted by Zuckerman, (2011). This brings the concept of supply and demand, the supply of medics is dependent on the demand for the services.

Country Hill Hospital might merge with Skyline Health Services to sustain its supply of medics since the population is manageable. In the society the resources might be finite but the demand and consumption of such resources is infinite, what is referred to as scarcity Postma, & Roos, (2016). In this environment the per capita income is finite and the need for medical services is infinite this arises the need for a merge.

The ideology of forgoing the best alternative where

choices have to be made is referred as opportunity cost. In this environment, people

around Country Hill Hospital have no opportunity cost since the per capita

income shows most prefer the available resource. For those around Skyline

Health Services there is a possibility of opportunity cost having more than

three health facilities and a higher per capita income with a very few

unemployed individuals making more people under insurance covers. Winning more

clients is done through quality service delivery and the higher the services

and independence means a higher competitive advantage to consider a merge means

a lower probability of a competitive advantage. There are other factors to

consider that are, necessities and desire. The two explain the urgency in

considering the merge, is the need for quality services could make mergers considerable

and the necessity to remain unique in the market could hinder the need for a

merge.

Analysis Presentation

The living condition at Country Hills Medical Center

has peephole with a low income with a median domestic income of $30,647 with

most of the people living below the poverty line. Individuals around Skyline

Health Services live in a well better environment with a median household

income of $ 41,278 an average household income of $ 64,839. The population has

more employed people with little unemployment rates hence more people living

above poverty lines. The vicinity has a wide hospital network and minimal

unemployment rates this elaborates the rate of patient demand for the Skyline

Health Services being higher compared to Country Hill Hospital.

Skyline Health Services will be allocated more

resources compared to Country Hill Hospital at the moment due to the population

and the higher patient demand. In case of a merger, more resources will be

allocated to Skyline Health Facility to meet the demand and ensure a leveraged supply

on labor. As noted by Lindsay, & Berridge, (2012), a merger brings more resources to the dominant function to disseminate the funds to the acquired entity. A merger is considered under economies of scale, the more the consumption the higher chances of market independence, the lower the consumption the higher chances of a merger or an acquisition. The current consumer base does not substantially support Country Hill Hospital Independence, the area population is manageable and more patients can be taken care of with the local nursing staff.

The two institutions are well managed with reputable

stakeholders like the clergy, businessmen, and political advisors, this brings

in the issue of conflict of interest among stakeholders of the two medical facilities.

The clergy will opt not to adapt a merger by considering the poverty levels of

the community around Country Hill Hospital, since most functions will be taken

to the city and will require commuting to access the health services. The

political advisors and businessmen might have the same ideologies about the

merge since most of their functions are on self gain.

With most functions in the city there is a

possibility of market growth since the consumption of goods and services is

high. The merger will also improve the social amenities in the city hence more

resources will be allocated to the Skyline Health services benefiting the

businessmen. Political advisors would focus on socio-economic gains thus

fostering on a merger since more functions would be taken to the city and hence

access to the society. The perspectives from the three stakeholder class

converge on socio-economic gains but diverge once the clergy brings in only

social life, caring for the poor, and, bringing more resources to the rural area.

 

 

Implications of merging

for Country Hill Hospital

Considering a merger would reduce the market share

and power for the health facility since it would discourage the growth making

it a function of a great health facility. A merger would make Country Hill

Hospital lose the ability to acquire resources since more will be allocated to

Skyline Health Services to devolve. According to Tenn, (2011) increasing market share is a good thing considering the economies of scale, to develop a cost advantage there is need for higher volume instrumentalism. Market share always increases sales in a stagnating market environment and for Country Hill Hospital it will be beneficial. The stakeholders might also consider market reputation and result in increasing the market share.

For the healthcare consumers in Country Hill

Hospital a merger would have two impacts, positively the merger would allow

availability of more health services and reduces cases of medical referrals.

Negatively, the consumers will have to commute to attain medical attention

which is not economically friendly considering their economic conditions with

more people below poverty line. Commuting would cost them a fortune and lead to

economic degradation which is not considerate. For patients, an increased market

power for the health institution means streamlined protocols leading to

enhanced standards of quality healthcare. Mergers also can moderate low-volume

surgeries occurrence which means patients will undergo procedures under

conducive environments with skilled medical professionals. On the contrary

increased market power for the patients will increase their access to medical

care and prefer quality service care. Despite the economic conditions, patients

would raise funds and consider quality medical attention and shun away from the

rural hospital. In the long run country hill hospital would have to do thorough

consultation and consider a merger.

 

Implications of merging

related the Triple Aim Framework

The Triple Aim Framework is economical and friendly

in relation to the modern medical demands. For Country Hill Hospital, adopting

the Triple Aim Framework means being considerate with the citizens since the

framework improves the experience of care, improves the health of the

population, and reduction of per capita cost in health care. On adapting the

framework more patients would access quality healthcare and improve their

visits to the Country Hill Hospital creating a swift chain in terms of demand

and supply. Scarcity will be controlled with more resources being allocated,

however, the facility would lose more patients since with affordable care

patients would prefer Skyline Health Service the context of opportunity cost, as

noted by Koppel, & Lehmann, (2015).

Patients prefer comfort and assurance through

quality medical attendance, the Triple Aim Framework has incorporated this

factor through patient experience and affordable cost. The Affordable Care Act

(ACA) institutionalizes the need for quality attendance under all medical

frameworks. Such factors make Country Hill Hospital confident in taking care

for its patients considering the economic challenge in the vicinity. However,

the above factor can be risky since more patients might opt to commute and

attain medical services at Skyline Health Services since there are more facilities

compared to the rural health facility. Once stakeholders note an increase in

referral trends they might opt a merger thus allocating more resources to the

city health service.

Recommendations

Considering issue of demand and supply it would be

advisable to incorporate a merger since Country Hill Hospital would increase

its market power and market share. There also certain conditions which should

be incorporated to find out the essence of a merger, the Triple Aim Framework

has brought economical friendly solutions and quality assurance in health care.

This in a way discourages a merger since it empowers the Country Hill Hospital

on long term basis it will attain more patients, more stability and

professional medical care. To consider a merger there should be clarity in

terms of rationale for affiliation, this considers community benefits and

expected organizational benefits once the merger decision is undertaken, Jacobs et al., (2013). The other consideration is whether the outcome would ensure cost and value creation for the consumers as well as the stakeholders.

Merger plans should clearly stipulate the need for

undertaking such a decision. Will there be communication between the two

hospitals in case of a merger? There should be evaluation of long

term and short term effects of considering the merger. If the communication

system will be affected on incorporation a merger then there is no reason

behind incorporating the merger. Considering the narrow economic zone, a merger

should ensure all stakeholders are involved in the decision making and strategy

implementation for the two health facilities. The two health facilities have

different organizational structures, this is very critical before consideration

of a merger. The two organizational cultures should blend with each other to

harmonize the partnership, if not they should abandon the merger and work on an

independent entity.