1. Mallory O’Brien
Professor Jasinski
PUBHLTH 390CT
Final Case Analysis
December 13th, 2015
The Merger of Two Competing Hospitals
I)
Two regional hospitals, Porter Regional Medical Center and Banner Regional Medical
Center, are in the course of merging to form Portsmith Regional Medical Center. Porter Regional
was a for-profit hospital owned by Mountain Health Care. Porter Regional was located on the
east side of town and offered various medical services. Additionally, Porter Regional was
struggling with a steep one-million-dollar loss and predicted losses of five hundred thousand in
the on-coming year. Banner Regional, a county owned hospital, was located opposite that of
Porter Regional. Banner Regional is an older hospital but they have shown positive income from
their services and have also reserved funds for renovations.
Both hospitals come from different leadership and administrative backgrounds. Porter
Regional, owned by Mountain Health Care, had an in-house management team but it was
primarily the corporate office at MHC overseeing the daily operations. Banner Regional
practiced a self-governance style of management. For the sake of eliminating competition,
Banner Regional sold their facility to the county. Banner Regional and MHC came to an
agreement to merge the facilities. In this agreement, it was required that the newly merged
hospitals agree on a new name and an interim team to help with leadership changes and benefit
packages. A new hospital board would need to be elected along with a new mission statement.
With the help of an outside firm, it was decided that Pat Herman, previous CEO of
Banner Regional, received the position of CEO of the newly formed Portsmith Regional Medical
Center. Herman’s extensive management experience and background made him a better
contender over Porter Regional’s CEO Scott Johns. Banner Regional and Porter Regional came
from different management cultures creating some conflicts with many of the employees.
Communication from upper management to other lower management areas was lacking. Dale
Miller was elected as the new Vice President of Human Resources at Portsmith Regional. Miller
has a lot of knowledge and experience in mergers. When Miller stepped in, he recognized that
the merger brought in an abundance of differences between management and employees.
II)
Portsmith Regional Medical Center faced the major obstacle of not functioning as a
unified organization. This was detrimental to their success as the only operating health care
facility for the surrounding community. Hospital staff and other personnel needed to support the
merger by resolving their differences in management, culture, employer benefits, policies and
values. Banner Regional and Porter Regional had oppositional leadership style. When the merger
occurred these differences in styles immediately surfaced, causing many employees to react
negatively. In addition, Banner Regional hospital board and Herman created the vision and
mission statement for Portsmith Regional, yet it was inconclusive and was not shared to the rest
of hospital staff. If it was communicated more clearly, the whole hospital would have a shared
goal of working to deliver that vision.

2. Another problem was staffing. There were a lot of LPNs compared to RNs, and it should
have been quite the opposite. Registered Nurses are needed for high level specialty nursing and
LPNs are not qualified for that work. Also, according to a staff analysis, many hospital personnel
were lacking technology skills. If Portsmith Regional strives to be able to eradicate outside
competition, their staff needs to be up to date with science and technology.
A merger cannot please all involved, but so far Portsmith retained a high number of
employees from Porter Regional and Banner Regional. Unfortunately, due to a disorganized
system of deciding a benefits package, many employees left voluntarily, for they were afraid of
losing their current benefits. Portsmith Regional needed to get organized and consider what was
good for the hospital, not a single group. Employees were also concerned with their job security
and compensation. Since duplicate positions transpired following the merger, staff members now
viewed each other as competitors. Portsmith staff needed the reassurance that their position of
work was valued and that they were also being compensated appropriately. Also, Portsmith
Regional heavily relied on its employees’ skills and knowledge, especially for the surrounding
community. If staff needs are not met or they are not happy, more employees will likely walk out
the door. This can create a huge problem as the hospital will lose money from employees leaving
and also from gaining new ones. Patients will ultimately be affected by this turnover of
employees. Upper and lower management need to work together to keep their employees
satisfied.
As a new health care organization, Portsmith Regional needs to get serious about their
mission, vision and value. If these are not created soon enough, it will be harder to do so in the
future because the divide between staff will keep growing. Herman, CEO Portsmith Regional,
could also be unintentionally contributing to this divide since he was previously CEO of Porter
Regional. There is still time to change this divide and to turn around the attitudes of some
employees. This change will take a lot of teamwork and employers will need to put their
differences aside. Herman, along with Miller and other management can communicate that the
fate of Portsmith is dependent on them. When employers begin to act as team members and are
considerate of others, Portsmith Regional will find that it will function more effectively as an
organization.
III)
As a newly established facility that offers an abundance of health care services, Portsmith
Regional has capital, advanced technology and services offered as a few major strengths. Porter
Regional was once losing big sums of money and had to liquidate. Alternatively, Banner
Regional needed to renovate their dated facility. Merging was a win-win for both hospitals.
Competition was eliminated by this consolidation and the funds are now being shared.
Technology is evolving and hospitals are in a hard position when and how to adopt a certain new
medical tool. With the alliance, Portsmith has the money to spend and employees to train with
advancing technology. On top of technology, the copious amounts of health services offered
between the pre-existing hospitals are never ending. This allows people of the community to not
go very far to get certain treatments and also brings in patients from around the globe. If
employees recognized and understood these strengths, the organization would develop a more
positive outlook as a team.
With strengths, come weaknesses. Some weaknesses that exist at Portsmith Regional are
employees’ unwillingness to promote teamwork, vision, values, and mission deficiency, and
finally the LPN and RN ratio. I believe that the biggest of the three weaknesses is the employees’

3. unenthusiastic attitude towards the merger. This is further damaging the lifespan of Portsmith
Regional. It is up to upper management to communicate to employees that teamwork is
necessary in making it as an accredited hospital. With help from Vice President Dale Miller and
some funds from the shared capital, Portsmith employees can undergo intensive team training.
Portsmith employers will be reminded that they need to work as team in order to meet the patient
needs, which is most important. Another weakness is the organizations lack of values, vision and
mission statement. This prevents employers from reaching a goal. When an organization works
together towards the same goal, the goal becomes more tangible. Finally, the ratio between LPN
and RN ratio is a weakness that is preventing the company to explore further medical and
scientific advancements. Without enough staffed RN’s on the clock, hi-tech equipment that a
patient is in need of cannot be used. In addition, these will also cause RN’s to become
overworked and putting patient’s life at risk if they do not receive the attention they need.
IV)
There are an infinite number of solutions that could be applied to Portsmith Regional that
could take the medical center in many different directions. Some solutions that I find that are the
most attainable is the implementation of a cross functional team and hiring a strategic planner.
Also, Portsmith Regional can encourage LPNs to continue further education in order to earn their
BS in nursing.
Portsmith Regional Medical Center’s dilemma is staff is treating this organization as two
separate hospitals rather than the one hospital it has become. This was a massive merge of two
competing hospitals and a lot is changing. Management in all department levels need to reassure
staff of their importance, keep them up to date on daily events, encourage team work and
promote the significance of the patient’s well-being. As Vice President of Human Resources,
Miller should be in charge of configuring a benefit’s package for Portsmith’s employees.
Employees have already grown disgruntled over the lack of an organized benefits package, with
some even opting to leave the organization. Miller should provide a benefits package that caters
to the employees’ particular skill level. Next, Miller should apply a cross functional team. A CFT
will not only look out for the staff at Portsmith, but also for the future of organization. The
team’s job is to make sure that both clinical and nonclinical staff needs are being met and are
aware of what is going on. When staff needs are being satisfied, patients’ satisfaction also
increases. A pro of this recommendation is that it encourages unity of all employers on all levels,
clinical and non-clinical. A con of this is that a CFT’s require teamwork, which some employees
are not ready to begin. The CFT should consist of both clinical and nonclinical personnel that are
driven and ready to make a positive change at Portsmith Regional.
CEO Pat Herman should consider hiring a strategic planner. Pat Herman, Dale Miller, the
medical board, upper and lower management can work along with the strategic planner to
communicate what they want to see for Portsmith Regional’s future endeavors. I believe that a
strategic planner is necessary for the future of Portsmith Regional. It’s very important as a new
organization to develop a strategic plan and then execute the strategy to ensure the organization’s
success. Within the strategic plan development process, MVV statements will be made and
communicated clearly throughout the whole organization furthering the unifying of employees.
A positive part of this recommendation is that hiring an outsider for the strategic planner position
is that he or she will provide an unbiased approach. Since there is so much division within
Portsmith, it is necessary that someone can come from the outside and do what they are asked to
do, without worrying about walking on egg shells. A con to this recommendation, however, is

4. that someone who is already working for Portsmith and experienced with strategic planning may
feel that they would suit this position since they are from the inside. Tensions may rise between
the hired planner and upper management for taking control of the hospitals direction. Although
very unlikely, given the detrimental state Portsmith is in with its clashing employees. Hopefully
after the teambuilding experience, employees will be more open and motivated to help change
the course of Portsmith to a positive one.
Portsmith Regional should motivate LPNs to attain their BS in Nursing which would help
in easing the uneven ratio between LPNs and RNs. Portsmith Regional can possibly even pay or
offer scholarships for current LPNs. I find that this could be more cost effective than actually
hiring more RNs. A benefit for this would be that LPNs currently at Portsmith already have a
basis of patients that they see. Also, LPNs will be going through the teambuilding process and to
have them leave and new employees come in could mess up the dynamic. A con of this is the
time it will take for LPNs to achieve their degree. However, the time will be worth it and it is the
most cost effective option.
V)
There are a lot of different changes occurring at Portsmith Regional. I feel that after the
first year of implementation of these solutions, Portsmith Regional will begin to see changes
taking place. Employees will begin to feel comfortable working together as unit and that their
needs are being met. Portsmith Regional will become aware that the organization is moving
forward with an increase in patient volume and the hospital will become profitable.
Patient satisfaction and the success of the organization are directly related to employee
satisfaction. One measurable goal for Portsmith Regional is to have staff be fully integrated by
two years. An evaluation plan to make sure that goal is going to be met is to do quarterly
surveys. The survey can be anonymous, but cater to the department the employee works in.
Every departmental manager can administer the anonymous survey. Then they can hand it over
to the cross functional team to document the results. If there are changes to be made, the team
can contact the department directly and figure out a plan to help improve the setting.
Portsmith Regional wants to be able to compete with surrounding hospitals and to obtain
the best technologies. Staffing experience, like the ratio between LPNs and RNs, is preventing
this from happening. Portsmith Regional should set a goal of two years to make sure the ratio of
RNs to LPNs will reach 60:40. Accelerated programs can be found online and possibly at the
local state university. It is imperative that LPNs complete this transition to a RN for Portsmith
Regional’s future as a successful healthcare center. This is most cost effective way to avoid the
high price of nursing turnover.
Portsmith Regional can implement a plan to make sure that the LPNs who are attending
school are not being overworked. Services like free tutoring or day care can be options for the
LPNs. These services will hopefully keep LPNs motivated and also satisfied with the direction
their training will take them in. In the end, the new hospital will be able to move forward in a
positive course while also handling the health care needs of the surrounding community.