Mergers of healthcare facilities: impact upon materiel management

Hospital mergers afford healthcare providers the chance to take advantage of economies of scale, integrate clinical, administrative and support functions, eliminate functional redundancies and redesign patient care delivery. This article explains how such advantages were realized, demonstrated through a hypothetical case based on information obtained from actual mergers. A corporate materiel management division was established, and centralized warehousing, product evaluation and purchasing instituted. Some management positions were eliminated or restructured and patient care services were closed, relocated, or opened among the various entities in the merger. Through these and other changes, the new healthcare system was about to realize about $1.7 million in one-time savings and expects savings in the seven digits over at least the next three years. The article concludes that as hospital mergers continue to increase, the position of corporate director of materiel management will evolve as the next logical career step for materiel management professionals.