Monday, January 03, 2005
Another Take on Economies of Scale
In response to my posting on the subject last November, the following came in from Don Arnwine, a long-time toiler in the vineyards of health care:
“I have had a different experience re ‘economies of scale’ and merger. Was once the first CEO of the merger of five hospitals. Based on my experience it is not the merger itself that failed to perform but the execution following the merger. Many don't face up to the conflict that bringing things together can create. That is particularly true of the medical staffs. I know of many merged situations in which the medical staffs are still separate 25 years later. No economies there.”
In response to my posting on the subject last November, the following came in from Don Arnwine, a long-time toiler in the vineyards of health care:
“I have had a different experience re ‘economies of scale’ and merger. Was once the first CEO of the merger of five hospitals. Based on my experience it is not the merger itself that failed to perform but the execution following the merger. Many don't face up to the conflict that bringing things together can create. That is particularly true of the medical staffs. I know of many merged situations in which the medical staffs are still separate 25 years later. No economies there.”
