• Financial challenges because Children’s hospital has unsustainable revenues as follow: In 2000 – 2.2%, 2001 – 1.9%, 2002 - -0.3% and 2003 – 0.8%.
• The cost of maintaining the staffing and other operations to ensure patients safety and high quality care
• Disproportionate share of budgets for merging cost (Children’s hospital has insignificant revenue).
• Providers tension between fee-for-service and regulated prices.
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3. Mack is already in a stronger position and has a great power. A hospital with numerous assets such as 900 beds; it’s located in a strategically suited location; it operates 17 outpatient and ambulatory surgical centers in the suburbs, a physician-hospital organization (PHO), a network of five community health centers, and an IPA-Style HMO A.K.A M-Plan. Merging amid two other hospitals with a greater values such as the children’s and university hospitals, will make them the biggest hospital system in the US with a wide range of services.
Strengths:
• Will have all the tools, competence and expertise needed for a successful merge. Shortell & Kaluzny’s believe that “the increased diversity will drive greater variations in strategies and force successful health care organizations to be agile and adapt to the cultural and demographic needs of their constituents”.
• Mack hospital will be a one stop hospital for the families. Lim (2014) also, points out that mergers are believed to remain a preferred policy solution for failing hospital over other measures such as new senior management