Question
Mergers and acquisitions could be used to help prevent against closure by allowing two or more organizations to merge, and by allowing vertical collaborative arrangements
Mergers and acquisitions could be used to help prevent against closure by allowing two or more organizations to merge, and by allowing vertical collaborative arrangements to integrate better control in coordination of health care services. By doing this, it prevents closures. Costs are reduced, efficiency increases, there is more access to resources that are shared among organizations, there is more of a wider range of services offered, and it will allow more investments to be made. Based on the textbook, "An initial reaction in the hospital industry has been to acquire and merge organizations, and to purchase or develop extensive physician networks as the hospital industry assumes more financial risk. As hospital organizations grow, they have also begun to undertake direct approaches with employers with insurance-like options, eliminating the health insurance plan in the middle" (Hicks, 2021). However, this topic seems to be quite controversial among the health care industry. Arguments may include work shortages and lower wages for workers. Although, other evidence states that rural areas that underwent merges saw better outcomes, but as we see, these facilities are more at risk for closure, and merging is what keeps them open. These are the reasons why mergers and acquisitions help to prevent against closure.
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