The Stanford Health Services And Ucsf Medical Center...

A). Why they thought it would be a good idea The Stanford Health Services and UCSF medical center merger was projected to have a great turnout as it was supposed to be â€Å"enhanc[ing] the academic mission[s], strengthen[ing] referrals, and creat[ing] a more cost effective teaching hospital† (Sjoberg, 1999). The two competitors joined forces in hopes that it would alleviate the pressures of the new managed care systems by merging resources and acquiring more bargaining power. Stanford Medicine and UCSF came together at a time when many other academic health centers were looking to improve their negotiating powers with healthcare plans and physician groups. The merger offered hope to UCSF and Stanford by strengthening training programs and offering innovation plans as well as financial support. B). What went wrong how they could have better prepared for merger Unfortunately, a lot of things went wrong in the UCSF and Stanford merger which ultimately cost them tens of millions of dollars. For instance, they were projected to save almost $300 million by 2020, when in reality they lost almost $90 million in two years’ time. It didn’t help that reimbursement rates were down at the time and patients were starting to move to lower paying plans. One notable problem from the start was that USHC continued to hire and ended up with 1000 new employees. Additionally, the IT costs for the year 2000 were astronomical to say the least, and the merger expenses were double than what