You have been presented an outstanding opportunity to serve as a graduate student intern for the chief executive officer (CEO) of a large HCO. The HCO is an HMO model and originated approximately a century ago as a small rural hospital. Due to the rural setting, the HMO model flourished and, over the years, expanded throughout the region. Today, the HMO has a presence in over eighteen counties and has a number of competing interests from for-profit and not-for-profit HCOs in the region.
The board of directors recently approved the acquisition of two regional hospitals. First, the HCO decided to acquire a small rural critical-care-access hospital in a relatively remote county. The interest in acquiring the hospital is to service the existing population and expand the reach of the HMO. Second, the HCO decided to acquire a private full-service hospital in a moderate-size city (population forty-two thousand). The HCO’s move is strategic in nature, preventing the sale of the hospital to its for-profit competitor, and will gain the region its sole emergency department level 2 (two) trauma center with helicopter transport while giving the HCO the ability to service its growing HMO membership in the area.
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