Question

Physician Group Strategic Recommendation

You are the managing partner of a physician group practice that wishes to grow in size to gain greater bargaining power. You have 2 options: seek a permanent solution via a merger or acquisition with another physician group or create a strategic alliance? What are the pros and cons of each option? What do you prefer and why?

Answer 1

Merger and acquisition are interchangeable, it is an equal partner, acquisitions bring the asset of another. Collaboration among health care providers to coproduce services mergers and acquisitions promotes interest in collaboration it will achieve their desired ends and provide best outcomes than a strategic alliance.
alliance almost similar to mergers it promotes organization mission and promotes performance and has their own legal freedom, it will be more informal and involve little commitment of partners collaboration. Mergers and alliances provide financial performance and protect themselves. mergers provide benefit with increase price and market scope, scale, and power, make adjustments in product mix and service.
Merger and acquisition:
Pros:
-It provides more value and improves market power
-Cost-effective
-Provide growth in size economy
Cons:
Provide distress
-there can be no culture
-there will not be a unique decision
Strategic alliance:
Pros:
-It reaches their target goal
-It improves trust and makes innovation
-It provides trust and makes innovation
-It provides awareness and has financial assistance
-Avoid new market power
Cons:
- Have employer crossover
-Make conflicts in ownership
-have more cost expenses
-It leads to discrepancies
-there will not be any culture and late in implementation.
I prefer Merger and acquisition with another physician group can provide better financial performance, cost savings, and higher profits. but the alliance will not provide financial performance and provide only decreased quality of care and benefits and get a less financial scope.