October 15, 2012
Steve Kovak, MHA
Change and Culture Case Study I
During the past decade the hospital industry has made profound organizational changes, including the extensive consolidation of hospital system through merger and the formation hospital systems (Evans & Gertler, 2012). The rules of health care are changing. Growth is not about just getting bigger. It is about developing all of the components needed for coordinated care and reduced costs. Health system reform has various incentives, such as those related to reducing readmission rates, and establishing an accountable care organization, but qualifying for them requires closer links to other parts of the medical care chain (Breakthroughs -Hospital merger and acquisition strategies, 2012). There is a definite value for growth opportunity through hospital mergers. Mergers occur for several reasons, a desire to increase size, to gain leverage for negotiations with managed care companies, the desire to penetrate new markets to attract additional customers, the need for improved efficiencies resulting from centralized administrative practices, and the desire to express value of promoting readily available comprehensive care. A merger is the combining of two or more corporate entities to create one new organization with one licensure, and one provider number for reimbursement purposes (Liebler & McConnely, 2008). Mergers and acquisitions in health care are increasing in numbers because of the increasing financial, socio-political and managerial challenges of decreasing reimbursement and increasing payor demand for quality-driven, patient-centered and cost-effective services to the community. Restructuring an organization through mergers, and affiliations are characteristic organizational efforts to achieve economies of scale, adapt, and survive. Two such specific reasons include: the need for improved efficiencies through administrative centralization, such as financial, and health information resources streamlining, and marketing intensification, and the desire to promote comprehensive, accessible are by keeping smaller community-based facilities from closing. Valley Care Health System of Ohio consists of the merger between Northside Medical Center, Trumbull Memorial Hospital, and Hillside Rehabilitation Hospital. Valley Care Health System replaced Forum Health name as an affiliate. “Valley Care sums up our purpose to provide compassionate, quality health care for residents of the Mahoning, and Trumbull Valley” said David Fikse, chief executive officer of Northside Medical Center, and Valley Care Health System.” Each of our hospitals, and health care facilities has its own unique characteristics, but as the same time, we benefit by sharing our knowledge, our best practices, and our strengths across a system of providers” (Valley Care of Ohio, n.d.). Northside Hospital quality scores were down, and the hospital was on the verge of closure before Valley Care Health System purchased it. This essay will discuss the transition of the employees and the impact the merger will have on the culture of the new combined organization and will address how systems will be developed as the new organization takes shape. Trumbull Memorial Hospital and Hillside Rehabilitation Hospital brings us best in class capabilities in inpatient and outpatient services. Blending these companies in a way that maximizes these capabilities and aligns our structure with our long-term strategy is a top priority. First, the managers will need to organize the new organization around the core business needs. These core business needs will form the nucleus of the new combined organization and each business unit will provide resources, decision-making authority, and direct control over matters critical to its success. Because each area is unique, the exact structure of what is contained in each business unit will vary...