The combining of two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock.

3 Reasons Why Merging Is Advantageous.

Struggle to Survive

Small, not-for-profit and other types of hospitals seek mergers for a range of reasons as the atmosphere to stay afloat grows tougher. Not-for-profit hospitals throughout the U.S. are reducing unprofitable services while expanding more lucrative lines to help protect margins.

New Forms of Healthcare Delivery

Covering uninsured patients’ expenses, coping with diminishing government reimbursements and the upcoming challenges of healthcare reform are forcing hospitals everywhere to look at cost effective ways of managing care. Merging plays an important role in allowing hospitals to experiment with innovative new forms of healthcare such as the accountable care organization.

Community Matters

A hospital serves its community and in doing so should keep the community informed and contented on the development of a merger. When hospitals change from nonprofit to for-profit it can have a large impact on the community such as reduced charity care and the ability to meet other local needs.

Hospital mergers allow for integration of patients’ care through new healthcare models, the ability to take on the financial risk tied with overseeing groups of patients and simply, the ability to continue providing care to patients in the community.