Carilion Clinic
Problem Statement: Can Carilion Clinic develop comprehensive, vertically integrated healthcare system despite its bad image/the obstacles it faces/the controversy it faces?
Scenario:
• Carilion Clinic employs 13% of Roanoke’s total population, which includes 12 different facilities within 20 miles of the city’s center
• The Clinic has a children’s hospital and several breast care and lactation centers as well as acute care hospitals and a physician group practice
• Carilion clinic employs over 500 physicians in a multispecialty group practice that is active in 10 not-for-profit hospitals within a 150-mile radius
• System admits over 1 million patients annually
• There were clinic’s additional joint ventures
• Since 1998, Carilion Health System has become Carilion Clinic, a vertically integrated system of 10 hospitals that includes graduate and undergraduate medical education programs, a group practice of over 500 physicians, and other ventures
• The organization has net operating revenue of over $1.2 billion, with assets of $1.1 billion in 2007
• In May 1988, the U.S. Justice Department’s Antitrust Division tried to prevent the merger of the two hospitals located in Roanoke (Memorial Roanoke Hospital and Community Hospital of Roanoke Valley) because of the monopoly it would create in the area
• Congress addressed the issue of monopolistic practices by passing the Sherman Antitrust Act of 1890, which limited the anticompetitive practices of business
•
Analysis:
• Dr Murphy wants to vertically integrate the organization
• Constantly, Dr Murphy is talking about growing the hospital into a vertically integrated healthcare system
• Text says “I’ve been enamored of this model of healthcare delivery for a long time…”
• He is clear about his intentions for the future of Carilion Health System
Conclusions:
• Antitrust laws and methods of calculating market density, such as the Herfindahl – Hirschman Index, are imperfect and can leave
Scenario:
• Carilion Clinic employs 13% of Roanoke’s total population, which includes 12 different facilities within 20 miles of the city’s center
• The Clinic has a children’s hospital and several breast care and lactation centers as well as acute care hospitals and a physician group practice
• Carilion clinic employs over 500 physicians in a multispecialty group practice that is active in 10 not-for-profit hospitals within a 150-mile radius
• System admits over 1 million patients annually
• There were clinic’s additional joint ventures
• Since 1998, Carilion Health System has become Carilion Clinic, a vertically integrated system of 10 hospitals that includes graduate and undergraduate medical education programs, a group practice of over 500 physicians, and other ventures
• The organization has net operating revenue of over $1.2 billion, with assets of $1.1 billion in 2007
• In May 1988, the U.S. Justice Department’s Antitrust Division tried to prevent the merger of the two hospitals located in Roanoke (Memorial Roanoke Hospital and Community Hospital of Roanoke Valley) because of the monopoly it would create in the area
• Congress addressed the issue of monopolistic practices by passing the Sherman Antitrust Act of 1890, which limited the anticompetitive practices of business
•
Analysis:
• Dr Murphy wants to vertically integrate the organization
• Constantly, Dr Murphy is talking about growing the hospital into a vertically integrated healthcare system
• Text says “I’ve been enamored of this model of healthcare delivery for a long time…”
• He is clear about his intentions for the future of Carilion Health System
Conclusions:
• Antitrust laws and methods of calculating market density, such as the Herfindahl – Hirschman Index, are imperfect and can leave