Running head RESEARCH PAPER ON HOSPITAL SYSTEM .docx

Running head: RESEARCH PAPER ON HOSPITAL SYSTEM
1
RESEARCH PAPER ON HOSPITAL SYSTEM
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Research Paper on Hospital System
Name:
Institutional Affiliation:
Research Paper on Hospital System
Introduction
Mergers and acquisition are important in the development of
any given organization. Having the merger of the 300-400 beds
and four locations makes it possible for the development of
quality services. It brings together both human and financial
resources to initiate the needed services to the patients in the
healthcare sector. This means that effective financial and
productivity management resonates to improved efficiency. Risk
management experts support implementation of the above
strategies in the healthcare sector. Hospitals and healthcare
systems employ enterprise risk management to boost their
competitive advantage, improvement of market shares, deal with
risks, and stabilize risk bottom lines. The alignment of risk
management and the safety of patient through effective
programs is instrumental in the above case. The above document
serves as a foundation of ensuring the aspect of discussing the
relationship between enterprise risk management and the
development of hospital systems. The merger between the two
inpatient hospital systems is important in ensuring an in-depth
evaluation of the risks involved and developing the right

framework in ensuring positive outcomes.
Presentation of Merger on the Two Hospital Systems
With the merger of the two health systems in different
locations, it means that the outcomes will have to adopt to the
dramatic change. This dramatic change will originate from the
aspect of ensuring that there is a proper alignment of advanced
technology, regulatory changes, and globalization among other
factors. The operating environment for two hospitals will have
to understand the rapid shifting in relation to the change
experienced. The shifting is from a volume-based delivery
model to one that is value-dependent (Zou, Kiviniemi, & Jones,
2017). A guideline for hospitals to transform from their current
fee-for-service first model to pay-for-performance second curve
system continue to take the center stage. It serves as the most
significant high-priority strategy to initiate increase efficiency.
It also improves the quality of standards in the operations of the
healthcare industry. It aligns the hospitals, healthcare staff, and
providers across the healthcare continuum. It also influences
patient safety by improving quality via the utilization of
medical practices that are evidence-based.
Literature Review of Enterprise Risk Management and Hospital
Systems
Zou, Kiviniemi, & Jones (2017) argue that enterprise risk
management serves as a framework that allows the achievement
of safe, reliable, and secure health care delivery. It can ensure
that there is an opportunity of providing a structure with the
capacity to fully integrate patient safety and risk management
across different care settings. The situation creates a
relationship between reactive and interactive approaches
towards risk identification, evaluation, and treatment via

principles of risk management. The above are entrenched into
strategic planning and corporate operations. The research argues
that it is important for any merger to ensure that it takes into
consideration the aspect of understanding the concept of
enterprise risk management before implementing a partnership
(Fraser & Simkins, 2016). Managing risk is the concept of
enterprise risk management in any given sector. The
management of risks within the perspective of an enterprise
allows a hospital to gain the capacity to employ cross-functional
approaches in the assessment, evaluation, and measurement of
risks. It assists in the provision of effective decision-making
within an organization. The above approach occurs to promote
tolerance for risk during the implementation of strategies under
the reforms that motivate the merger.
Callahan & Soileau (2017) present recent trends, among them
globalization of both business and financial markets, are
instrumental in influencing the development of a merger. The
market continues to integrate a hospital system with increase
regulations, insurance provisions, and corporate governance
among others. The situation creates a change in how the forces
behind the mergers integrate with the development of the two
hospital systems. It is important to focus on how the enterprise
risk management should engage positively in the change process
of the mergers. Modern day markets have somehow influenced
the enterprise risk management to convert from traditional
approaches to more diverse risk management strategies in the
functioning of healthcare organizations.
Also, Morgan, Ensor, & Waters (2016) confirm the fact that an
enterprise risk management is crucial in helping the
management of any hospital system to focus on the delivery of
effective and better management. It ensures that patients are
able to enjoy treatments and diagnosis of their diseases. It

provides effective outcomes of the procedures and processes
used to deal with patients. This means that patients are able to
experience security and safe risk management approaches
placed on their treatment. On the other hand, it eliminates any
financial and business risks. The value of the merger is
enhanced through benefits such as financial loss prevention,
brand reputation, and investments to support expansion (Riaz &
Hunjra, 2015). The above benefits become diversified because
of their intended outcome. They are used for the development of
the community by providing better incentives to different
members equally.
Concerning effective management, quality services, and
increased product accessibility, it is crucial to focus on key
performance indicators. Key performance indicators are always
instrumental in ensuring that the healthcare system is able to
receive the best outcomes. These outcomes are in turn of
collaborative performance outcomes, effective decision-making,
hiring of the needed skills/knowledge, and positive outcomes
(Papanicolas, Woskie, & Jha, 2018). Health care key
performance indicators are important for the two merging
hospitals. Each of the hospitals are seen to contain about 300-
400 bed spaces. They are also in two different locations. It
means that they will be integrating a collaborative service
framework focused on ensuring that different customers are
handled within the shortest time frame possible. Health care key
performance indicators, therefore, are important in the two
hospitals and the healthcare sector in general. They are
important because they track different areas of performance.
Studies show that public and private hospitals are always on the
verge of experiencing tightening budgets. They are also highly
influenced by the ever-evolving policies, regulatory
frameworks, and processes that originate from the global

markets. The above pressures are able to create real emphasis
on hospitals and healthcare organizations to establish the best
objectives. They are also able to promote the achievement of
positive business outcomes (Rahimi, Kavosi, Shojaei, &
Kharazmi, 2016). Concerning the above, how is it possible to
promote effective business outcomes in the objectives of a
merger? The question is dynamic in answering the aspect of
business development in an organization in the healthcare
sector. In the case of the merging hospitals, tracking and
measurement are the right answers to the questions (Morgan,
Ensor, & Waters, 2016). These are important processes in
ensuring that the merger creates the right results in the
healthcare setting and the community around it.
Si, You, Liu, & Huang (2017) state that it is important to note
that financial studies have come with the proof that businesses
that experience success are those that are able to measure their
capacity to adapt to change. It serves as a rule that any business
indicators that are able to be measured have a capacity of
experiencing some improvements. To measure and track the
objectives of a business, it would be crucial to bring on board
some few key performance indicators. The market comprises of
a number of key performance indicators that are instrumental in
initiating growth and development of any healthcare industry.
The key performing indicators tend to explain the objective that
organizations can measure. It also creates a strong explanation
of what needs to be changed in relation to developing a strategic
move forward (Ellis & Thomas, 1993). Key performance
indicators, evaluate the impact of strategies in ensuring that the
healthcare sector is able to achieve the needed objectives in
relation to the mergers and strategies employed in them.
Additionally, traditional risk management centers are important
in controlling different activities relating to better management

of medical service and product outcomes. There are different
means of control, avoidance, and avoidance of challenges that
are instrumental to consider. An enterprise risk management
systematic in relation to key performance indicators look at the
real aspect of evaluating the risk as an asset (Callahan &
Soileau, 2017). It also enables a hospital system to focus on the
potential gain. This means evaluating the risk-producing
activities to establish a risk-free environment (Kothari,
Hovanec, Hastie, & Sibbald, 2011). For a merger to occur, it is
crucial to focus on the capacity and benefits created via
enterprise risk management approaches. The merger has an
opportunity of choosing to use an ERM as a logical framework
for the identification, measurement, and undertakings of the
broad scope of potential risks affecting operational outcomes.
The benefits associated with an ERM and Key performance
indicators are instrumental in the avoidance of financial losses.
It also ensures legal entanglements and enhancement of
different effectiveness of management processes. The merging
hospital systems have the capacity to value stakeholders.
Among them comprise of the community around them, members
of staff, patients, and suppliers. They create stability for the
merger, protect brand reputation, and increase confidence
among stakeholders to enhance positive development (Sodhi,
Son, & Tang, 2012). Instead of ensuring that risks are handled
independently in the merger and the healthcare setting, the use
of an enterprise risk management approach recognizes the
interrelation of risks and their management.
Beguine (2018) presents different types of operational risks in
the market. Among the most significant comprise of operational,
financial, human, strategic, legal, and technological risks.
Operational risks in the situation of the merger focus on the
core businesses of the two hospitals and the formulated new

organization formed in terms of healthcare service provision.
Financial risks have a connection to the ability of the newly
created merged to maintain access to different benefits and
resources in the market. It ensures that there are issues such as
supplier support evaluation, contracting factors, and capital
handled amicably. Risks are handled through better performance
created by financial techniques. Human capital risks, ensure
that the organization is able to identify the relationship between
leadership and the employment circle. Epstein, Fiscella, Lesser,
& Stange (2010) argue that the staffing methodologies and
processes are significant in developing the needed outcome in
terms of decision-making. The process comprises of proper
recruitment, management, and retention of the needed
workforce.
An organization should be able to benefit from compensation
and better incentives. The situation influences occupational
hazards, violence in the workplace, discrimination, and
harassment among others. Strategic risks are at the center of an
enterprise risk management approach. They are able to ensure
growth is experienced in the environment of an organization.
The main reason is because it encourages mergers and
acquisitions. It also encourages joint ventures to become
successful. The resources that are allocated to the two hospitals
are merged to create a more pronounced outcome in terms of
the position of the hospital. It also eliminates the possibility of
the merger possessing reputational risks relating to performance
expectations and community relations (Nowotny, 2016). Legal
and regulatory risks have a better connection to the existing
complex regulations, rules, and standards in the market. They
ensure that there is an in-depth evaluation of licensure and
accreditation.
This is to identify the relationship it has with the professional

environment. For any merger to occur, Morgan, Ensor, &
Waters (2016) argues that the need to evaluate technological
risks is crucial. Technological risks, in this case, focus on the
proper use of information systems and electronic medicine to
enhance a better service outcome among patients. There are also
issues related to electronic health records among patients that
need to be evaluated at all times when two merging
organizations come together.
Strategic Risk Analysis and Strategic Risk Factors
Identification
As presented in the literature segment, there are a number of
issues that need to be considered when dealing with a merger at
all times. Strategic risk analysis and the identification of
strategic risk factors are at the center of ensuring effective
development of the merger (Si, You, Liu, & Huang, 2017). The
two hospitals have different resources at their disposal. Without
proper management of the merger processes and strategies, it
becomes difficult to manage the resources, stakeholders, and the
decisions that found the mission and vision of the two hospitals.
Dealing with the Objectives of the Merger
The results and objectives of a merger are quantifiable and
measurable. They focus on the newly intended goals of an
organization. For the two hospitals, it is important in creating
stable performance outcomes. It means focusing on the progress
of the newly created organization. It is crucial to collect data on
how the two hospitals work (Aven, 2011). Data on the
customers they handle and their performance indicators is
instrumental to identify the possibility of the merger (Nowotny,
2016). It also makes it possible to identify the impact it has on
the operational development of the two hospitals as one entity.
Despite the significant contribution to positive health care

outcomes, it is important to ensure that proper management is
crucial for the merger to bear the right results.
Risks evaluation associated with Technology
Risk evaluation in the type of technology that needs to be used
in the merger is important. Information technology critical for
the business of the merging hospitals. The issue is about the
processes associated with decision-making and outcomes of
health services. The risks, in this case, revolves around systems
and data. It means creating a response plan to the risks that may
affect proper operations of systems, hardware, and software.
Since the merger occurs, it is important to not that the two
hospitals will have to merge their information systems.
Merging of information systems may develop risks such as
human error, malicious attacks, viruses, and spam. Human
errors may originate from the fact that the management may fail
to align customer relationship management information with the
newly formed vision of the merger. Also, the electronic health
system may also require a lot of work in terms of recording and
merging the data about services (Callahan & Soileau, 2017).
Viruses, spam, and malicious attacks originate from hackers
who may try as much as possible to launch attacks if the system
of the hospitals is vulnerable.
Viruses, spams, and malicious attacks, manipulate data and may
lead to failure of systems. Realignment of the systems, data,
security, and processing capabilities is crucial in ensuring that
there are proper ways of encouraging robust operations. Other
problems comprise of floods, cyclones, and fires (Si, You, Liu,
& Huang, 2017). Despite the two hospitals being in different
locations, it is crucial to note that their systems will be able to

serve their needs simultaneously. Natural disasters may damage
their operations, if not properly checked. The establishment of a
business continuity plan ensures the recovery of the systems in
case of any damages.
Average Patient Wait Time, Treatment Charge, Bed Occupancy
Rate, and Average Hospital Stay
The average patient waits time measures and tracks business
objectives associated with the satisfaction of patients. It also
looks at the capacity management in ensuring that the patients
do not wait for long periods when receiving diagnosis and
treatment. Since the merger creates a double number of the
resources held by each hospital, it should be able to reduce the
waiting time for serving individuals. This means that all
employees and resources have to be placed collaboratively to
support effective outcomes (Callahan & Soileau, 2017).
Concerning bed occupancy rate, it is important for the merger to
focus on increasing the number of beds to service the needs of
patients in the community and national levels. Bed occupancy
serves as a good indication to ensure that the hospitals are able
to provide effective and safe treatment to patients in the market
(Fraser & Simkins, 2016).
Bed occupancy means that operational and capacity of the
hospitals is able to meet the objectives of the patients in the
market. Lastly, the average hospital stay should be conducted
by ensuring that there is proper management of treatment
services among patients. It is crucial to note that different
incentives are made possible to reduce the hospital stays in the
healthcare facility created by the merger. The Average Patient
Wait Time, Treatment Charge, Bed Occupancy Rate, and
Average Hospital Stay scores should be above the scale of 5 out
of ten when it comes to ensuring that the merger is satisfactory
to the stakeholders and managers in the newly created hospitals.

Staff-to-Patient Ratio
The staff is comprised of the medical and non-medical
employees in an institution. They comprise of the skill and
manpower surrounding the development of an institution.
Ackman (2012) argues that it is important to ensure that an
organization has enough staff to deal with the issues
surrounding the needs of patients. Staff ratio involves equality
when it comes to the development of services provided to
customers. The merger should have a capacity of ensuring that
it serves the needs of customers by allowing the right number to
eliminate risks of waiting time. Staff-to-patient ratio indicates
that the business objectives of the merger improves the quality
of health care provided to patients in the market.
Concerning the ratio scaling, it is important for the scale to be
over five out of ten to show above average results. In relation to
the above, the ratio may be obtained by merging the employees
of the two hospitals under one single entity and remuneration
framework. It means that employee's wages may have to be
increased to meet their needs and boost their morale (Adams,
2017). The human resource department should be able to initiate
growth by balancing costs of operations with generated
revenues. It is through the above that it becomes easier to
benefit employees and ensure that they are satisfied to
undertake their roles in the professional environment. The rate
for the employees, strategic outcome should be approximately 8
out of 10 to ensure positive developments are undertaken.
Conclusion
In conclusion, the paper shows that mergers have to be
evaluated through a key performance indicator and the

enterprise risk management approaches. The two approaches are
instrumental in ensuring that the two hospitals are able to
mitigate any financial, human resource-based, logistical, and
demand/supply issues. The elimination of the above issues is
crucial to create an environment that is highly flexible in
dealing with different issues faced by the newly created
healthcare organization. Mergers should balance financial and
decision-making approaches with the legal, human resource,
logistical risks among others for positive outcomes. It is
through the above that it becomes positive to focus on
evaluating growth and ensuring that an organization achieves
the best outcomes. Mergers have and will always exist in the
market to initiate growth for the intended entities. They are
meant to create the possibility of having benefits for clients
who are supported by the healthcare sector. Therefore, mergers
should be managed properly for effective outcomes.
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