The document provides information about a case discussion on the potential consolidation of two hospitals, Gorsich General Hospital and Holy Family Hospital. It includes an environmental scan of the hospitals, an analysis of alternative consolidation scenarios, and a stakeholder analysis. The consultant team has been hired to assist with the consolidation and provide recommendations. Their key questions are: 1) what consolidation recommendation to provide; 2) how to execute the consolidation; 3) how to communicate recommendations; and 4) how to deal with potential opposition groups.

1. 1
Strategic Management For Health Care Manager

2. Agenda of Case Discussion
Information from the case
1. The characters
2. External and internal
analysis
3. Alternative Scenario
4. Stakeholder analysis
5. Other issues
The Questions
1. What would your
recommendation be? Why?
2. How would you recommend
the hospitals proceed?
3. How would you propose the
consultants communicate their
recommendations?
4. What strategy should them
adopt with to potential
opposition groups?
2

3. INFORMATION FROM THE CASE
3

4. Environmental scan of Gorsich
4
Holy Family
Hospital
Gorsich
General
Hospital
Gorsich
Clinic
Consult Team

5. Characters- Consult Team
• The Team is hired by the board of the
hospitals for assisting the consolidation.
• John Tortini: Leader of the consult team
• Bill Dean: Review the financial situation and
environment of the hospitals.
• Dustin Robbs: Take charge of the interviews
and surveys.
5

6. Characters- Gorsich General Hosp.
6
President of the chamber of the commerce
Well respected in the community
Commit the consolidation

7. Characters-Holy Family Hosp.
7
Manager of the construction company
Active in community affairs
Commit the consolidationa
Holy Family
Hospital

8. 8
O: opportunity, T:threaten, U:uncertainty

9. Implications of external analysis
• Although there is a pessimistic prediction in economics issues,
but the competitiveness of Gorsich is low. I propose the 2
hosps can consolidate in a progressive ways.
• There is a substantial demand in preventive medicine
services, esp. in employee wellness, elderly health services
and temperance services.
• Oligopoly in inpatient service in Gorsich and surrounding area
means they could grow the service volume and scale of the
economy by consolidation, but they might invite disaster in
anti-trust.
9

10. 10
Overview of the hosps.:
--: complementary, --: clash with the other hosp if consolidation occur.

11. Alternative Scenarios
• Implications:
– According to internal analysis, consolidation has many
benefit to both hosps in operation and market share, but
different managerial style and organizational culture will
be a problem.
– #4 & #3 have substantial effect in cost saving, but the risk
and complexity of them are much higher than #2
– In order to achieve the best effect in cost saving,
implement #3 or #4 is still worthy in the long run.
11

12. Stakeholder Analysis
• Implication:
– Independent MDs and Employees might be the potential oppose
forces to consolidation.
– Board members are the most eager to consolidation.
– Clinic MDs might be the opposition group if full consolidation occur,
although they seems to support somewhat collaboration.
12
Agree degree of
collaboration
No
Collaboration
Minimum
Collaboration
Mid
Collaboration
Maximum
Collaboration
Community 0% 3% 25% 72%
Ind. MDs 17% 11% 19% 53%
Clinic MDs 0% 7% 29% 64%
Board Member 0% 0% 15% 85%
Mgmt. and
Emp.
5% 7% 23% 65%

13. Stakeholder Analysis
• Implication:
– The opposing reason of Ind. and clinic MDs are due to fear of
competition.
– The opposing reason of employees are different values and the fear of
layoff.
13

14. Other Issues
• Implications
– Board members’ ambition: Lowering the
operating cost is the ultimate goal. But fully
consolidation and abandon one campus is
unfeasible.
– In order to avoid anti-trust, make a acceptable
decision is critical and essential.
• How to make a strategy of the collaboration
that fit with this two conditions?
14

15. THE QUESTIONS: #1
1. What would your recommendation
be? Why?
2. How would you recommend the
hospitals proceed?
3. How would you propose the
consultants communicate their
recommendations?
4. What strategy should them adopt
with to potential opposition groups?
DECISION OF THEDECISION OF THE
CONSOLIDATIONCONSOLIDATION
HOW TO EXECUTEHOW TO EXECUTE
THETHE
CONSOLIDATIONCONSOLIDATION
COMMUNICATECOMMUNICATE
WITH THEWITH THE
STAKEHOLDERSSTAKEHOLDERS
DEAL WITH THEDEAL WITH THE
RESISTANCERESISTANCE
15

16. #1 Decision of the consolidation
• If I were Mr. Tortini, I would recommend the
consolidation in a progressive way.
– Because the opposition group can introduce anti-trust
actions.
– To ensure the collaboration can be effective, both hosps
need time to know and learn to each other.
– But reduce operating cost is the ultimate goal, the
collaboration should have substantial imrovement in cost
reduction.
• In my opinion, the consolidation should be
implemented in alternative#2 in short-term and adopt
with#3 as 2-year goal than #4 as 5-year goal.
16

17. Analysis of Alternative2
• Consolidation by strategic alliance and JV:
17
Pros:
•Low cost and low risks
•Low resistance from opposition
group
Pros:
•Low cost and low risks
•Low resistance from opposition
group
Cons:
•No substantial benefit in
operating cost reduction
•There are little differential
services they can cooperate in a
complemental way.
Cons:
•No substantial benefit in
operating cost reduction
•There are little differential
services they can cooperate in a
complemental way.
Uncertainties:
•Financial problem can be solved by this insignificant action?
•In this JV, which hosp is the accountable leader?
•If the JV fails, maybe both of them will lose other collaborative
opportunities.
Uncertainties:
•Financial problem can be solved by this insignificant action?
•In this JV, which hosp is the accountable leader?
•If the JV fails, maybe both of them will lose other collaborative
opportunities.

18. Analysis of Alternative3,4
• Consolidation by merge and acquisition:
18
Pros:
•Huge improvement in
operating costs reduction.
•Satisfy the expectation of
community and the board.
Pros:
•Huge improvement in
operating costs reduction.
•Satisfy the expectation of
community and the board.
Cons:
•Clash between 2 hosps may
come up with M&A.
•Huge investment capital
•Anti-trust agencies’
intervention
Cons:
•Clash between 2 hosps may
come up with M&A.
•Huge investment capital
•Anti-trust agencies’
intervention
Uncertainties:
•The degree of resistance from MDs could be strong.
•Can the new organization operate in a mission-oriented and high-
efficiency way or in a self-interest and low-efficiency way?
Uncertainties:
•The degree of resistance from MDs could be strong.
•Can the new organization operate in a mission-oriented and high-
efficiency way or in a self-interest and low-efficiency way?

19. Compare Alter3 & Alter4
• If alternative#2 goes well, which one should
be recommended as the next step?
19

20. THE QUESTIONS: #2
1. What would your recommendation
be? Why?
2. How would you recommend the
hospitals proceed?
3. How would you propose the
consultants communicate their
recommendations?
4. What strategy should them adopt
with to potential opposition groups?
DECISION OF THEDECISION OF THE
CONSOLIDATIONCONSOLIDATION
HOW TO EXECUTEHOW TO EXECUTE
THETHE
CONSOLIDATIONCONSOLIDATION
COMMUNICATECOMMUNICATE
WITH THEWITH THE
STAKEHOLDERSSTAKEHOLDERS
DEAL WITH THEDEAL WITH THE
RESISTANCERESISTANCE
20

21. Figure out the collaborative strategy
21
Both of 2hosps need know each other since the
initial of JV. They have to build up a common
mission, value and vision from the leadership.
When they have sufficient understand in vision, the
consolidation should start.
They have to plan a complemented ,feasible, and
progressive strategy in align their business units.
They have to choose a promising market, and know
how to compete. Then each BU have to set the
functional policy in service, HR, and marketing area.

22. #2 How to execute the consolidation
Timeline of the collaborative strategy implementation:
22
Arrange
JV
0~6M
Arrange
Consolidation
18~24M
Arrange
Service
Concentration
42-48M
Year 1 Year2 Year3 Year4 Year5

23. Why do I recommend this
strategy?
1. To start up from the most feasible alternative, and
avoid the opposition groups boycott.
2. In first two years, both hosps have sufficient time to
know each other, cooperate the JV and infuse their
common values and vision
3. In order to solve the financial problem completely,
the consolidation should be implemented with a
lower objection since year3.
4. To collaborative effectively, the concentration in BU
should be executed during year5
23

24. Corporate strategy of 2 hospitals
24
New JV
Preventive Services:
wellness, Health checkup
Bob acts as leader of JV
Coordinative StageCoordinative Stage
year1- year2year1- year2
Cooperative stageCooperative stage
year3- year4year3- year4
Original G.G.HOriginal G.G.H Original H.F.HOriginal H.F.H
Coordinative StageCoordinative Stage
year5- afteryear5- after
Original G.G.HOriginal G.G.H Original H.F.HOriginal H.F.H
Jeff act as CEO, Bob act as the
mentor/ senior consultant,
maintain their administration
individually
Outpatient services are provided
in original G.G.H campus, inpatient
and ER services are provided in
H.F.H

25. Projected operation cost saved
25

26. THE QUESTIONS: #3
1. What would your recommendation
be? Why?
2. How would you recommend the
hospitals proceed?
3. How would you propose the
consultants communicate their
recommendations?
4. What strategy should them adopt
with to potential opposition groups?
DECISION OF THEDECISION OF THE
CONSOLIDATIONCONSOLIDATION
HOW TO EXECUTEHOW TO EXECUTE
THETHE
CONSOLIDATIONCONSOLIDATION
COMMUNICATECOMMUNICATE
WITH THEWITH THE
STAKEHOLDERSSTAKEHOLDERS
DEAL WITH THEDEAL WITH THE
RESISTANCERESISTANCE
26

27. #3 Communicate with the
stakeholders
• Goals of the communication
– Let mgmt. of 2 hosp. commit to collaboration
– Erase the doubt from potential opposition group
– Let community understand the new JV service will
help them
27

28. Proposed process of communication
28
Board Meeting
CEO meeting to gain a
common view
Approve
Executives of 2 hosps. meeting
Plan the preparation of JV
Assign a cross-organization
project team to build the JV
services
Outsource part services to Ind.
MDs
Advocate the JV to their
community
Communicate with employees
Communicate with mgmt
Arrange the press conference
to spread to public

29. Suggestion for G.G.H
1. Keep an attitude in arranging collaborative
activities
2. Let H.F.H lead the JV and offer the staff or
professions.
3. Communicate with Jeff to adjust his
aggressive attitude, see Bob as his mentor
and respect him.
29

30. Suggestion for H.F.H
1. Be responsible for leading the marketing,
facility, and initial operation of the JV.
2. Set the JV location in their campus.
3. Assign Bob work as the leader of the JV, Jeff
and other executives provide assists.
30

31. THE QUESTIONS: #4
1. What would your recommendation
be? Why?
2. How would you recommend the
hospitals proceed?
3. How would you propose the
consultants communicate their
recommendations?
4. What strategy should them adopt
with to potential opposition groups?
DECISION OF THEDECISION OF THE
CONSOLIDATIONCONSOLIDATION
HOW TO EXECUTEHOW TO EXECUTE
THETHE
CONSOLIDATIONCONSOLIDATION
COMMUNICATECOMMUNICATE
WITH THEWITH THE
STAKEHOLDERSSTAKEHOLDERS
DEAL WITH THEDEAL WITH THE
RESISTANCERESISTANCE
31

32. Government:
Monopoly is discouraged
#4 Deal with the resistance
• Environmental scan: Who are potential opposition groups?
32
Holy Family
Hospital
Gorsich
General
Hospital
Gorsich
Clinic
Consult Team
Lay off?
Clash in values?
Heavy work
load?
Micro-
managing?
Monopoly?
How to survive?
How to
leverage the
change of 2
hosps?
Lay off?
Religious
difference?

33. Opposition group: Employees
• Doubts: Lay-off, Different leadership and
managerial style, and impact in belief
• Who: The executives of both hosps should
communicate with their staff and lay down
related policies to promise and clarify the
span of change.
• How: Promise no lay-offs, hold OJT in the
other side, establish a cross-org. project team.
33

34. Opposition group: MDs
• Doubts: monopoly or deprive of their niche
• Who: Executives and Cross-org. project team
• How: They could arrange some of the
preventive services that outsource to Ind.
MDs. And executives should visit ind.MDs and
clinic to emphasis that the collaboration is
complementary to their service, this won’t
harm their niche.
34

35. Opposition group: Government
• Doubts: Monopoly
• Who: CEOs and boards of the hosps
• How: Strive for everyone of the community is
really critical to ensure the collaboration. They
should start their consolidation from JV to
minimize the opposition voice and maintain
good relations to other stakeholders.
35

36. 36
~Thank You~~Thank You~