From The New England Journal of Medicine
Mergers and acquisitions are now such common subjects of discussion in our newspapers, on television, and in the country's larger law firms that they are hardly news any longer. The aim of a merger is to make something greater or stronger than the sum of its parts. What is newsworthy is that they may fail or be contested in the courts, and what is worrisome is that the world of business is littered with failed mergers. So it should come as no surprise that in the world of corporate medicine we have our own mergers to discuss or decry. In the hospital world of the 1990s, strength was often believed to derive from alliances that could drive better bargains in a changing world of reimbursements for medical services. In Boston, competition was fierce; in New York, the state no longer sustained hospital rates after January 1, 1997; and in California, health maintenance organizations grew rapidly. In this detailed and very well written book, John Kastor dissects for us three important mergers of the mid- and late 1990s that involved six of the country's leading academic hospitals, which were closely allied to five distinguished medical schools. The details, and of course the people, differed, but each group believed that they could continue to do what they already did so well if they teamed up with a main competitor so as to face a hostile new world with greater strength. Who would ever have thought that traditional rivals such as the Massachusetts General and Brigham and Women's hospitals, the Presbyterian and New York hospitals, and the Stanford and University of California, San Francisco, hospitals would consider such a marriage? And who would have guessed that in New York and Boston -- neither of which is known for cooperative spirit, and in both of which life is generally lived in the fast lane -- would have successful mergers (at least as works still in progress), whereas in laid-back, friendly California such a marriage would last only 23 months and would prove to be an expensive and embarrassing failure? Kastor, a cardiologist of note, a faculty member at Harvard and the University of Pennsylvania, and for 11 years chair of medicine at the University of Maryland, was, as this book amply demonstrates, born to be an investigative journalist. He interviewed 237 faculty members and administrators, some more than once, and with great clarity tells the story of the three mergers in two chapters each. In the first chapter pertaining to each merger, he briefly describes the history of each hospital and medical school and then discusses the hospitals' leaders and the increasing pressures they faced in a rapidly changing and highly uncertain medical marketplace. In the second chapter, Kastor describes in detail the internal and external pressures that resulted. An informative but rapid summary of the medical care scene in the early 1990s serves as an introductory chapter, and in a final chapter Kastor considers the contrasts among the three quite different merger arrangements and points to some of the lessons we might learn. As fascinating as these stories and their main characters are, it would not do them justice to attempt a capsule review of each in the space of a short review. Suffice it to say that in many places the story is a gripping one. Whether we can believe that ultimately such mergers will lead to better patient care or to better clinical education for medical students and house staff, only time will tell. The story of the three mergers that Kastor tells in such rich detail is not yet a work of history, nor does it pretend to be. There are historical nuggets throughout, and clearly any historian who works in the various archives of these institutions in order to write a history at some future time will use this book as an important source. Although it may be much too early to write such a history, at least two conclusions may be drawn. One, a theme of ever-increasing importance, relates to the differences and the similarities between a business enterprise and a university and its hospitals. A much fuller historical and organizational study of this complicated point is desperately needed if we are going to avoid the inevitable pitfalls when these two cultures meet. A second point implicit throughout these case histories is the importance of people not only with good will and good intentions, but also with vision and with the leadership skills necessary to carry out partnerships among dedicated faculty members from different traditions, different cultures, different loyalties, and (as in the California case) from public and private universities. As complicated as the economics, the geography, or the traditions may be, all those who contemplate such mergers ought to have a sign on their desk that says, "It's the people, stupid."
Gert H. Brieger, M.D., Ph.D.Copyright © 2002 Massachusetts Medical Society. All rights reserved. The New England Journal of Medicine is a registered trademark of the MMS.
Review
"A 'must read'for members of these institutions, anyone contemplating such mergers elsewhere, and officials charged with enforcing anti-trust laws." --
Alain C. Enthoven, Stanford University"A fascinating glimpse into the marital difficulties encountered in three prominent teaching hospital mergers." --
Charles Rosenberg, Harvard University"In a scholarly, lucid, and incisive manner, he identifies the cultures, costs, and environmental issues which make a difference." --
Kenneth I. Shine, M.D., President, National Institute of Medicine
