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Case
| HBS Case Collection
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October 1996
(Revised January 1997)
Mt. Auburn Hospital
by
F. Warren McFarlan and Jaan Elias
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Abstract
In December of 1993, two of Boston's largest and best known hospitals, Massachusetts General and Brigham and Women's, announced that they were setting aside their historic rivalry to form an alliance and build a regional health network. The announcement set off a wave of merger talk throughout a Boston health care market that was carrying too many specialists, beds, and service providers. Like its peers, Mt. Auburn Hospital began a search for an alliance. The hospital had managed to thrive during the previous decade by restructuring its operations in response to the revolution in managed care. But in a health care environment potentially dominated by regional networks, the hospital's position as a mixture of community and teaching hospital had made it vulnerable. Mt. Auburn's board of trustees formed a special task force on alliances to solicit proposals and make a recommendation as to which (if any) organization would make for the best partner. The suitors that showed up at the task force's door represented nearly every type of player in the health care market. In February of 1996, the task force faced the daunting task of picking through the various alternatives.
Keywords: Health Care and Treatment;
Negotiation Offer;
Alliances;
Networks;
Social Enterprise;
Horizontal Integration;
Health Industry;
Boston;
