Mergers Involving Academic Health Centers: A Formidable Challenge

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Escalating economic pressures on the clinical enterprise threaten the missions of education and research in many of the most prestigious academic health centers. Following the model of industry, mergers of the healthcare delivery systems of teaching hospitals and clinics held promise for economies of scale and an improved operating margin. Failure to follow business principles in constructing the merged entity, differences in organizational governance and culture, and inability of physician leadership to prioritize, downsize, and consolidate clinical programs to optimize operational efficiencies all compromise the success of such mergers in academic medicine. Academic institutions and their respective governing boards need to exercise greater discipline in financial analysis and a willingness to make difficult decisions that show favor to one parent institution over another if mergers are to be effective in this setting. To date, an example of a vibrant and successful merger of academic health centers remains to be found.

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