How Did the Merger with Columbia Benefit the Company and Ultimately Almost Destroy It at the Same Time? What Are the Reasons of Downfalls of the Merger?
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How did the Merger with Columbia benefit the company and ultimately almost destroy it at the same time? What are the reasons of downfalls of the merger?
In business there is one modest rule: grow or die. Mergers and acquisitions are a dynamic part of any healthy economy and importantly, the major way that companies are able to provide returns to owners and investors. HCA was working in a traditional industry where there were major encounters and financial restrictions. One of the major factors that affected HCA is the bigger amount of uninsured Americans. HCA had a great effective standard of focusing on patient care, but lost focus by struggling to control the health care industry. Its business-level strategy primarily started off well but some developed into one that only dedicated on profitability of success of the company. The company soon lost vision of the main goal of satisfying the customer to gain value for the company. HCA focused on developing acquisitions and mergers to gain more profitability and expansion. This caused the company to expand past its ethical operating means. After merging the Columbia/HCAs goal was to emphasis on providing beds for insured patients to keep profits up. As the quantity of uninsured Americans increased, it made it harder to keep beds at full ability. Increases in health care costs also played a part in the HCAs operations. Healthcare facilities must tolerate the costs they are linked to treating the increasing amount of uninsured patients. This, in turn, caused the health care arena to shift the costs of treatment by increasing health care prices and the main reason for downfall of merger is that the federal governments inquiry of Columbia/HCAs billing performs became public through a sequence of break-ins by the FBI and the Internal Revenue Service.
References:
Duksaite, E. (2009). Why companies decide to participate in mergers and acquisition transactions. Mokslas : Lietuvos Ateitis, 1(3), 21-n/a. doi: 10.3846/145
HCA, Hospital Corporation of America (2011). Our History, found at