Understanding Mergers and Acqusitions in the Health Care Industry

As the human race has evolved, as with so many other things, health care has become increasingly complex, and expensive, becoming a multi-trillion dollar industry worldwide, for example (Levins, 2000). In fact, the use of the term "industry" to describe health care itself leads to the topic of this research; namely, the impact that mergers and acquisitions have in health care from a variety of points of view. By using specific examples, this paper will discuss these multiple impacts in an effort to better understand what mergers and acquisitions mean to health care organizations, services, workers, and patients alike.

Impact of Mergers and Acquisitions on the Organizations Involved

To begin, it should be understood that health care has become an industry in and of itself because of several factors, such as the boom in population which leads to more people needing medical services, the proliferation of new diseases which emerge many times because of environmental factors, and a general increase in the standard of living in many nations which makes health care available to more paying patients (Levins, 2000). All of these factors have turned health organizations into businesses, and like all businesses, mergers and acquisitions are commonplace. What this means to the organizations, as an example, is a disappearance of small, regional health care organizations in favor of large conglomerates so to speak, making the profit/loss factors, rather than quality of care, patient relations, and the interest of the workers a priority.

Because of the quite literal matter of health care being a matter of life and death for the patients/customers, when care is compromised due to business decisions, and patients are injured or die as a result, the organizations must also contend with lawsuits and negative public image, although in fairness, lawsuits and the like have become commonplace in all businesses due to the litigious nature of society as a whole.

Overall, one of the most critical areas to be affected is the delivery of services itself, which will now be discussed.

Impact of Mergers and Acquisitions on the Delivery of Health Care Services

Services have changed, or more precisely the availability of those services, because of mergers and acquisitions in health care; for example, when localized hospitals and clinics are closed, and regional facilities are put in their place, those who live far away from the new facilities have less access to care (Singer, 2002). When these facilities are in effect downsized, and the delivery of services is compromised, an ethical issue also arises in terms of the social responsibility of health care providers to make services easily available; for example, health care organizations need to keep profits in mind, but where the line between profits and ethics is drawn has created a great deal of controversy (Ginsburg, 1996).

Impact of Mergers and Acquisitions on the Health Care Workforce

Workers in health care, because of the conversion of health care into a commercialized business in many respects, have found themselves exposed to the same opportunities and problems that face workers in the rest of the working world. Because of the fact that certain types of health care workers are in high demand, many of these workers will quickly switch jobs and be more likely to expose the organizations to staffing shortages unexpectedly. Additionally, from the viewpoint of the employers, mergers and acquisitions often create massive layoffs or pay cuts, due once again to the view of health care as a business rather than public service (Ginsburg, 1996).

Also, the bottom line to consider, in addition to all of the affects on the health care workforce, is the impact that the workers pass along to the patients.

Impact of Mergers and Acquisitions on the Patients

Patients may be the hardest hit by the mergers and acquisitions that have become commonplace in health care worldwide in recent years; for example, staffing cuts in the interest of profitability often cause patients to receive less attention and care than they would in a fully staffed facility. As was mentioned earlier in this paper, this often has irreversible effects on the patients due to the nature of health care as something that holds the power to quite literally cure or kill. As one source so aptly put it, when discussing health care as a business, the desire for profits may be one of the most lethal diseases of all, very contagious, and extremely hard to cure (Levins, 2000).

Conclusion

Overall, research has shown that when health care becomes a business rather than a public service, there are some negative effects, and in fairness some positive ones. In closing, perhaps the most important thought to take away from this research is that health care organizations, while having to be profit conscious as a matter of necessity, must not forget the human element of what they are doing to avoid catastrophe.

References

Ginsburg, C. (1996, November 18). The Patient as Profit Center: Hospital Inc. Comes to Town. The Nation, 263, 18+. Retrieved January 18, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5002274395
Levins, R. (2000, September). Is Capitalism a Disease? the Crisis in U.S. Public Health. Monthly Review, 52, 8. Retrieved January 18, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5002365863
Singer, P. A. (2002, May). Rx for Reform. Foreign Policy 76+. Retrieved January 18, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5000749779