Introduction

            Health care industry has been encountering substantial restructuring. The reason behind that entails understanding the manner in which the industry has the capacity of aiding understanding some of some of the changes which have been encountered in the same industry (Hammaker & Knadig, 2018). Nevertheless, the amount of the cost expenses which the organization receives from the private and other governmental organizations is the one which has the capacity of influencing or enforcing the health care providers to the extent of moving fee-for-service so has to enhance their health care services. The idea behind this is because it is the one which assists them in consolidating their everlasting corporate organizations (Penner, 2013). 

                                    Risk analysis and capital structuring

            From the perspectives of the healthcare organizations, it implies that any changes which might have been encountered will have to take into account some of the changes non-profit organizations could have encountered.  From the information collected, it implies that some of the not-for-profit hospitals like the Louisville hospital are the ones which have been always involved in acquisitions and mergers. Although other organizations could have entered in the same deal, it implies that they could have entered in the losing end (Li & Fei, 2017).  Regardless of the fact that health care information to be provided by each hospital varies, it implies that there is the need of ensuring that have followed the same protocol. The reason for that is because it is the one which have the influencing as well as evaluating some of the strategies and partnership needed to enhance their survival. Conversely, there is the need for understanding the ideas that outline some of the processes such a hospital organization utilizes to enhance their health care services (Wong et al., 2013).

            Conversely, the cost management and containment health care pressure are some of the factors which hospitals try to consolidate. The reason for that is because some of the affliction proposals obtained from the for-profit and not-for-profit partners are the one which will provide some of the fundamental solutions to economics and governance issues that impacts health care organizations.  In order to make this strategy a key goal, it is important to ensure that free proposal and open process have been integrated in understanding the impacts such conversion has to financial wellbeing of such a merger. This is important because the good understanding of the peoples’ values is one of the key ingredients which will enhance successful transaction.  Such an approval will ultimately take into account some of the political interests aimed at enhancing its environmental conversions (Hammaker & Knadig, 2018).

            Additionally, the above considerations imply that such conversions that is currently washing through the modern hospital industry is always driven by the financial and strategic pressures that is generated by the health care organizations. Taking into account the double-digit inflation found in the health care expenses, it means that the donors of this organizations have the motives of controlling some of the health care expenses to be encountered (Penner, 2013).  The modern health care information collected suggests that it the managed care which ends up doubling some the health care impacts it has on hospitals. Regardless of that, some of the incentives which were included were specifically developed for the purpose of maximizing the utilization of skilled and outpatient nursing facilities. 

            Some of the various strategies that have been adopted by the hospital boards are aimed at sheltering such organizations from affliction storms generated by other hospitals or neighboring hospital systems. Because of that, it implies that that hospital should have the capacity of realizing some of the key goals which will enable them to achieve organizational survival (Li & Fei, 2017). Taking such strategies into account, it means that the first mechanism will entail measuring what the hospital will be gaining. The reason for that is because it is the ability of organization that takes into account the means they use in partnering with the HMOs (health maintenance organizations).

            Nonetheless, in the process of partnering with the Louisville as one of the non-profit organization, it is important to ensure that its management authority have had the capacity of achieving the economies of scale through spreading fixed expenses. The idea behind this will entails streamlining the health care services that they offer. For some of the buyer who might be ratcheting down payments, it implies that the kinds of individual who will be surviving are the lowest income earners (Hammaker & Knadig, 2018). It is the demand for lower expenses invariably which ends up resulting for the push for size. The reason for that is because the lower medical purchasing power is the one which enhances lower cost capital, purchasing power, as well as the general access to production through enhancing the potential of the production systems (Penner, 2013). 

            The strategic rationale which necessitates a hospital to seek affiliation will mainly take into account some of the health care services they provide to satisfy the requirements of their clients. Although it is not an easy task, it is the responsibility of the hospitals’ boards of directors to ensure that they are emotionally connected to the needs of their co-workers and their community at large (McCue et al., 2015). Additionally, in order to evade such financial risks, the hospital organization should ensure that they have become protective in the manner in which they share their healthcare information.

            Despite the fact that it is it is highly appropriate and accepted that the decision made by the board to affiliate any health care decision, the truth is that at times the board do not end up receiving any considerable attention. The reason for that is because several participants have been noted to be ill-served by some of the health care organizations which have been long served by need of resisting the market pressures. In the process of seeking a financial partner, what happens is that the non-profit hospital strategic options and values is what end up diminishing. As this scenario continues, the truth is that such a hospital will be left with the responsibility of handling any health care partner who might be willing to meet its financial needs. This means that it is a truism in the hospital’s affiliation process which enables it to enhance as well as renegotiate some of the nonfinancial issues that ultimately impacts its vision (Hammaker & Knadig, 2018). It is because of this delayed hospital fiduciary roles which end up delaying the actions its management authority takes.

            The type of proposal that the not-for-profit and for-profit hospitals come up with is the one that represents a scenario in which previous competitors tries to rejuvenate fierce rivalry aside so as to come together in improving the interests of their community. The main objective behind this entails reducing costs through the process of rationalizing their health care services as well as increasing market clout (McCue et al., 2015). Furthermore, the combination of the hospital thwart HMO’s is the one which attempts to induce rivalry amongst each other. Regardless of that, the truth is that it is the modern health care system that has the capacity of improving its services through reducing non-patient and management care services.

            This will be mainly achieved through eliminating a certain percentage of its management team as well as merging back some of its office functions for instance, billing and accounting. Despite that, such transaction has been found to be difficult to implement (Wong et al., 2013). The reason for that is because in most cases the hospitals’ board of directors has been found to be resistant in streamlining any means which one organization can use to take over the other.

            On the same note, it should be understood that this kind of merger is the one which end up faltering the selection of CEOs (chief executive officers). The reason for that is because one of the largest barriers is the resistance developed to the notion of rationalizing their clinical services. As a result of that, it implies that the need of concentrating hospital tertiary services is the one which inflames competition amongst powerful medical practitioners as well as arousing jealousy between management and the board of members (McCue et al., 2015).

                                                            Conclusion

            Recent research indicates that antitrust law is one of the challenges that health care organizations do experience. Basically, as the two hospital tries to improve their financial base as a joint venture, their initial statements ought to be taken into account. It is this law which has been found to be frustrating the board of directors because it does not consider them to be in the profit-oriented organization. It is this scenario which always chafes them from the returns to be made by the physician groups or for-profit payers at the expense of the community health care organization. Since health care payers are the main customer of the health care organizations, it implies that the merger with for-profit and not-for-profit hospitals is the one which can be constructed as anticompetitive. It is this concept that always imbues the whole idea of the not-for-profit organization.

 

 

 

 

 

                                                            References

Hammaker, D. K., & Knadig, T. M. (2018). Health care management and the law. Jones & Barlett Learning Press

Li Han, & Fei Ren. (2017). Risk Assessment and Management in Hospital Merger and Acquisition. Journal of Commercial Biotechnology, 23(2), 31–36. https://doi.org/10.5912/jcb782

McCue, M. J., Thompson, J. M., & Tae Hyun Kim. (2015). Hospital Acquisitions Before Healthcare Reform. Journal of Healthcare Management, 60(3), 186–203. https://doi.org/10.1097/00115514-201505000-00007

Penner, S. J. (2013). Economics and financial management for nurses and nurse leaders. Springer Press

Wong-Hammond, L., & Damon, L. (2013). financing strategic plans for not-for-profits. Hfm (Healthcare Financial Management), 67(7), 70–76. Retrieved from http://165.193.178.96/login?url=http%3a%2f%2fsearch.ebscohost.com%2flogin.aspx%3fdirect%3dtrue%26db%3dbth%26AN%3d88970823%26site%3deds-live

 

 

 

 

 

Appendix

                               Louisville Hospital income Statement

                             Annualized data for twelve months

Date	2017	2016	2015	2014	2013
Months	12	12	12	12	12
Current status	Initially submitted audit	Information settled after  audits	Current information settled without audit	Reopened audits	Reopened audits
Revenue obtained from inpatients	$3,532,270,451	$3,481,722,376	$3,352,814,276	$3,147,442,262	$2,563,867,529
Revenue obtained from outpatients	$3,374,428,298	$3,120,295,809	$2,863,849,688	$2,694,679,636	$2,287,032,486
Total inpatient and outpatient Revenue	$6,917,697,749	$6,612,018,184	$6,316,763,865	$5,842,131,899	$4,951,900,124
Discountable allowances	$5,037,420,463	$4,820,329,560	$4,604,460,855	$4,156,045,067	$3,484,056,515
Net inpatient and outpatient Revenues	$1,861,274,287	$1,768,688,617	$1,702,203,109	$1,576,076,834	$1,456,833,625
Total hospital operating Expenses	$1,814,865,430	$1,661,237,265	$1,696,104,162	$1,397,901,766	$1,366,798,100