McKinsey reports : "Anyone who has researched merger success rates knows that roughly 70 percent of mergers fail." And they weren't just talking about hospitals!3) A merger offers little that cannot be accomplished by a strategic alliance between the parties. In an alliance, you can still have the benefits of coordinated care and payment risk sharing. You avoid, though, the cultural problems noted in number 2, above. Indeed, you might be more successful achieving your common goals because each of your own constituencies feels a loyal commitment to success. 2) There is no such thing as a merger. Every merger is a take-over of one institution by another. "Cost savings" from this chimera are chimeras.* A merger inevitably makes evident cultural differences and produces jealousies and alienation. The business benefits that are supposed to emerge are often lost in the crush of overly aggressive and overly passive aggressive participants.
* I've been wanting to use that word twice in a single sentence for years! A chimera is an organism, organ, or part consisting of two or more tissues of different genetic composition, produced as a result of organ transplant, grafting, or genetic engineering. It is also a fanciful mental illusion or fabrication.