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Healthcare Merger Case Study

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Healthcare is a competitive business therefore sometime they may have to use alternative strategies to ensure they remain relevant on the market. The financial health of the organization may lead them to finding another way to earn addition revenue. The decision to merge healthcare entities can vary and requires strategic planning to guarantee its success. Although merging or acquiring new companies is challenging it may to vital to keeping the business open or to augment the level of care that is currently available. Over the past few years there have been several healthcare companies merging while some were to promote growth others were due to financial reason. Financial Drivers There are numerous drivers that can influence the decision …show more content…

Reviewing the balance and cash flow statements are two ideal methods that will indicate if the merger was successful. According to Baker the balance sheet is shows what the company owes and what it is worth (p. 13). Now that the two companies have joined the balance will show debt and the value of the business. As for the cash flow is essential as it project how the cash will allocated of a period of time. There are four methods that can be assessed to figure out where the funding is going. A debt that is reduced along with an increase of the company’s value is beneficial. Monitoring the cash flow allows for the funds to be allocated correctly. These two methods can easily identify if the merger will be successful. Negative findings require a reevaluation to correct deficiency. Now that two companies have merged the financial health has to be scrutinized to ascertain that merger is …show more content…

The impact to the organization will be enormous since the plan which aid the parties to achieve financial success. Aforementioned processes are set to improve the financial health by working diligently together by following the steps to guarantee that the company’s objectives are met. Numerous challenges may arise during the merging of two companies therefore to eliminate or reduce barriers it is imperative that they execute a plan to guide them through the daily operations. According to Zelman, McCue, Glick, & Thomas, (2014), healthcare organizations face complex issues by trying to keep their business competitive and financially viable (p. 1). Managing the financial aspect of a business is complex and requires a proposal that will lead them to

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In the end, this allows a foundation for combined synergy. It is important to understand and to recognize the potential legal risks that would impact the deal. Also, review and discuss the pensions or other equity plans the company has active.

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By following these steps, healthcare organizations can leverage the capabilities of their partners and achieve their strategic goals (Centers for Medicare & Medicaid Services, 2021). Federal laws such as the anti-trust and Stark laws can significantly impact strategic alliances between businesses, particularly in highly regulated industries such as healthcare (Federal Trade Commission, 2021). Companies must understand these laws and ensure that their alliances comply with them to avoid legal challenges and penalties (Federal Trade Commission,

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Many mergers tend to fail and many others succeed. A merger is the combining of assets and operations, usually between two similar sized companies, in an agreement to join together. Mergers can cause bankruptcy, job losses, less choices, and even a breakup. On the other hand, they have many advantages such as, increased market share, lower cost of production, and higher competitiveness. Most mergers can be highly risky but with the presence of knowledge and intuition they can be successful.

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