Developing a Shared Vision: Hospitals Mergers and Layoffs

Developing a Shared Vision: Hospitals Mergers and Layoffs
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Developing a Shared Vision: Hospitals Mergers and Layoffs
Recent changes witnessed in the healthcare industry have set off a rush of reorganization, in response to the new reforms; Mergers and consolidation of health care service have become necessary. A total of 105 hospital merger took place in 2012 with 50 percent of mergers expected annually (Dafny, 2014). The rush for mergers and consolidation presents a special set of problems within the health care sector. Government reforms have compelled employers to reorganize its services while employees are forced to face the consequences of consolidation or merger at the same time handle change related uncertainties including low morale, decreased productivity and layoff due to declining revenues (Howard, 2015). Even though experts argue that through merger and acquisition hospitals have become more efficient, healthcare workers are yet to benefit from such arrangements.
Why Mergers and Health Care Service Consolidation Is On the Increase
The profound changes in the healthcare industry have made hospitals and service providers reorganize themselves through mergers and consolidation. Such realignments have come with positive and negative effects including; improves efficiency and quality with negative effects like acquiring greater market power and massive employee layoffs (Ramirez, 2014).
According to Ramirez (2014) merger and consolidation are based on reducing costs or eliminating redundancies which most parts involves job losses because mergers are meant to save money and improve services.
Reorganizing hospital operations in response to mergers or consolidation have the potential to affect the quality of care due to several factors. For example, if a merger comes with financial benefits the gains can be reinvested to improve quality. Service consolidation increases access to services and increases procedure volume. However, mergers and consolidation are likely to reduce competition, affecting the quality of service due to massive layoffs (Howard, 2015).
Innovative techniques enable the hospital to provide quality and efficient care services. Advanced technology has increased costs and the need for specialized personnel. Hospitals strive to become more efficient by controlling rising costs through efficient ways that include mergers. The potential impact of mergers on the workforce has usually been underestimated (Dafny, 2014).
Howard (2015) states that the main argument presented by medical experts is merging health care services will increase efficiency through economy of scale effect. The actual outcomes of mergers have generated mixed reactions. In one of the recent reports presented by the Institute of Medicine, a single merger can negatively affect the hospital's efficiency. Although mergers come with certain benefits, the hospital may also incur hidden costs. For example, the cost arising due to increased sickness and inadequate employee due to the restructuring process. Despite hospitals merger being cost effective, mergers are often complex and difficult processes that come with variable outcomes (Dafny, 2014).
Opportunities to reduce operation cost and gain econo...