The merger between two health care systems Research Paper

The merger between two health care systems - Research Paper Example management overlooked potential distrust from local care providers, it also did not focus on the overall inefficiencies as well as the market forces that come about during a merger. Furthermore, the new entity did not have cost-saving skills needed to keep the company a float after the merger; they combined this with poor cultural knowledge and team leadership needed to deal with losers and winners in the arrangement. Pennsylvania witnessed what could potentially be their largest health system yet in the 7th month of 1997 through the creation of Penn State Geisinger Health System. At first, the new unit now had 1342 beds, 1000 physicians, 77 outpatient clinics, 3 hospitals, 1 drug treatment facility as well as patients from about 40 counties in central Pennsylvania (Sidorov, 2003). During the formation process, the two former organizations needed to decide upon executive leadership, so they came up with a methodology for creation of a new board. They took a 50-50 split between board members from both health systems; however, Geisinger got the upper hand in this regard because its representative was the chairperson. He had the power to break ties during votes and he contributed towards a higher ratio of members from his own company; this implies that executive decisions were now skewed towards the chairperson’s former organization. Not all the aspects of the two companies were dissolved as Pen State Hershey would be retaining control of the college of Medicine that was under Hershey Medical Center. Several changes took place throughout the organization; for instance, the Health Plan under Geisinger now became a joint plan whose name accommodated the new change. This had the advantage of increasing the customer base to about a million for the HMO and expanded the geographic regions from which consumers came. The merged unit still maintained the regional demarcations that had been used by Geisinger, and only added Penn state HMC as a forth region which would