Employment Employment-Hospital

Hospital Merged: Is Your Contract Purged?

December 21, 2015

I watched a clip from one of those shark shows. A shark was eating a shark.

That reminded me that hospital mergers are on the rise.

What will happen to your hospital contract or to your hospital employment relationship in the event the hospital merges? Will you still be the contract holder? Will you still have a job?

To the general public, the merger of two business entities appears to be the creation of a partnership of sorts. The reality is much different. One entity disappears into the other. Just like in the case of those sharks.

OK, you got me! Sure, we might be able to see the old hospital building standing there. It might remain open. (Or, it might be knocked down and turned into condos or maybe a Wal-Mart) But if it’s open, it’s now owned and controlled by the surviving merger “partner.” Setting aside the legal niceties, “we’ve merged with you” is simply the more polite way of saying “you’ve been acquired.”

So, what can you do in advance to reduce a degree of merger risk? Consider one or more of the following contracting deal points:

  1. Your contract will continue uninterrupted in the event of a merger.
  2. You will receive $X in the event your contract is interrupted due to merger.
  3. You have the right to terminate your contract in the event of a merger.
  4. The hospital will take all reasonable steps to assure that your group is the one providing X service at that location following a merger.

The complete list is longer and, depending on your circumstances, customizable.

Leave a Reply