title: How to evaluate a potential merger or acquisition.
abstract: Economic imperatives in health care financing are compelling a variety of mergers, acquisitions, integrations, and other forms of amalgamation. As hospitals merge, their pathology practices are merging. Physicians are forming clinically integrated groups, both with and without hospitals. Universities, commercial laboratories, and even insurance companies are acquiring laboratories and pathology practices. There are few standards or guidelines to help the practicing pathologist respond to such new undertakings. In the present study, we present a "how-to" guide or template to assist pathologists in evaluating proposals to amalgamate and in managing the alliance. The procedure begins with an articulation of the cons and pros, followed by a series of assessments of the cultures, the market, the organization, and operations, as well as a legal and financial assessment and human resources appraisal of each of the entities. We then outline the method for developing an organizational and operational model for the new merged entity and for performing the feasibility analysis, making a final decision, drafting a contract, and developing the business plan for the new venture.
authors.affiliation: From the Keck School of Medicine, University of Southern California, Los Angeles (Dr Horowitz); and Billing Concepts and Solutions, Beverly Hills, California (Mr Provizer). Mr Barry is an independent CPA in Los Angeles, California.
authors.forename: Richard E
authors.initials: RE
authors.lastname: Horowitz
authors.forename: Harold
authors.initials: H
authors.lastname: Provizer
authors.forename: Michael J
authors.initials: MJ
authors.lastname: Barry
mesh_terms: D006273:Health Facility Merger / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration*; D006801:Humans; D015271:Insurance Pools / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration; D010337:Pathology Department, Hospital / Q000191:economics / Q000331:legislation & jurisprudence / Q000458:organization & administration*; D013038:Specialization