|WHAT IS THE PROBLEM?
|The primary reason hospitals do not merge or sell is that they are not willing to give up control. The board sees a sale or even a merger as a loss of control and an admission of failure; they are letting down the community, the medical staff and the employees. The thought of selling out to the hospital with which they have been competing for years is a difficult one to face.
The problem is control. One of the greatest challenges facing the health care industry today is the process of market consolidation. Competitive forces and increased managed care penetration are causing many organizations to question their long-term viability as stand-along hospitals. While some of these hospitals are considering selling, merging or joint venturing, others are interested in acquiring or consolidating. There are many issues that must be addressed, but none is more fundamental and at the same time problematic than the issue of control. Although many hospitals are concerned about their survival, few are willing to give up control.
The fact of the matter is, if you don’t think you’re going to survive on your own, you can give up control now or you can give up control later. Either way, eventually you will lose control.