Case eight. The acquisition of a community hospital by a religiously sponsored healthcare system.

Abstract

St. Martin's for many years enjoyed a friendly and supportive relationship with a small community hospital nearby even though it was the leading provider of healthcare in the other's market place. In the highly competitive environment reported in the case, it was clear that the smaller hospital would have to move aggressively to increase its market share, consider closure or merge with one of the larger competing hospitals. St. Martin's administration knew that it needed to decide whether to attempt to align itself with Community in some fashion or to compete aggressively enough with Community to so dilute Community's market that it could no longer function. One of these actions was required to avoid serious erosion of St. Martin's own patient base. The decision was made to pursue acquisition. This case presents the successful implementation of a carefully crafted and realized strategy. It provides the opportunity to consider multiple "what ifs" in terms of the alternative strategies not chosen.