In the late 1980s to the 1990s, many health care organizations’ strategies included partnering with other organizations to form networks, integrated delivery systems, mergers. Recently, there has been a marked slowing in this trend and, in fact, many such

`IN THE LATE 1980S TO THE 1990S , MANY HEALTH CARE ORGANIZATIONS STRATEGIES INCLUDED PARTNERING WITH OTHER ORGANIZATIONS TO FORM NETWORKS , INTEGRATED DELIVERY SYSTEMS , AND MERGERS . RECENTLY , THERE HAS BEEN A MARKED SLOWING IN THIS TREND . A DISCUSS FOR THE ATTRIBUTED REASONS FOR THIS DECLINE (2006

INTRODUCTION

In contemporary times stiff competition exist in global business arena where organizations do all within their power to curve a niche for themselves and make an edge over their competing rivals . In this instance , many organizations have resorted to corporate alliance integration , merger and

networking . For the sake of financial managerial and resource consolidation this corporate marriage is seen as a means to an end . Adducing the rationales behind corporate marriages Huck and Konrad (2004 :104 , has it that a temporary overvaluation of own stock or an undervaluation of the target firm might make acquisitions attractive . A second set of motivations are synergies which include complementarities in production or marketing , economies of scale , improvements in risk characteristics or financial constraints , or tax advantages . A third set of motives include asymmetric competence on the part of the management of the acquiring firm or empire building Fourth , the effects of merger and acquisition on market concentration and market power considerations play a major role

In the late 1980s and 1990 's , there were increasing occurrences of corporate alliances , mergers , networking and acquisitions in health care industry . By 1998 , 66 percent of hospitals had either acquired or formed a long-term contract with one or more physician organizations These relationships vary from loosely networked , open confederations to exclusive , fully integrated organizations (Cuellar Gertler , 2002 But in recent times this trend is on the decline . What are the reasons behind this decline in integration , merger , networking and corporate alliance in health care industry ? This is what this essay intends proffering answer to

INTEGRATION , MERGER AND NETWORKING IN HEALTHG CARE ORGANIZATIONS

In the 1980 's hospitals were buying dude ranches in Montana and bottling companies in Ohio . They were expanding into janitorial services catering firms , condominiums , travel agencies , and health clubs Unrelated diversification was intended to spread risks or develop new sources of revenues to support acute operations however many of the diversified businesses have been divested or liquidated as losing money or not in the best interests of a hospital . Some unrelated diversifications broke even or were marginally profitable , but they did not justify the diversion of the time . Merely having a large asset base , owning a lot of beds or health-related businesses or employing a lot of physicians does not , by itself , create value . What many healthcare executives really seem to be seeking in integration is to maximize the use of their assets , not reduce the per capita cost of care or improve the health of their communities (Healthcare Forum Journal 1994 . Many hospitals administrators lacked the skills to manage these non-acute care businesses . In addition , boards of trustees questioned the additional capital needed and wondered when these diversified businesses would become profitable . Some managers with the view...