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What economic factors should be considered

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Case Scenario: You are the chief financial officer (CFO) of a hospital located in a highly competitive, urban market split with two competing hospitals. The hospital is considering purchasing or affiliating with a large physicians' practice. Your hospital has 30% market share, but does not currently have any owned/employed physicians. Private insurers and Medicare are aggressively pushing value-based reimbursement under ACO contracts, and the one competing hospital has already acquired a large physicians' practice.

Question: To prepare for this Discussion, analyze the provided scenario. What are the advantages and disadvantages of the vertical integrationof the hospital with the physicians' practice? What economic factors should be considered? Consider strategies for the organizational integration of the hospital and physicians' practice. Be sure to address the economic factors you identified.

  • Compare the advantages and disadvantages of the vertical integration of the hospital and physicians' practice, including economic factors that need to be considered.
  • Recommend strategies for the organizational integration of the hospital and physicians' practice. Defend or argue the merits of your recommendations using economic principles.

 

Reference no: EM133554684

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