Mt. Auburn Hospital 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. In the same way that a sharp rap on the side of a beaker filled with a supersaturated solution causes crystals to form, the announcement set off a wave of merger talk throughout a Boston health care market that was carrying too many specialists, too many beds and too many service providers. Hospitals throughout the region began to seek affiliations lest they be left behind when the market had fully crystallized. Located across the river from Boston in Cambridge, Mt. Auburn Hospital intensified its own interest in forming an affiliation. Mt. Auburn 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 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 task force entertained presentations from nearly every type of player in the health care field. In February of 1996, the group faced the daunting task of picking through the various suitors and divining which was most likely to help Mt. Auburn achieve its goals. The changing health care environment Mt. Auburn background Situated on a slight rise overlooking a bend in the Charles River, Mt. Auburn Hospital was dedicated in 1886. Though the opening of the facility came only after an 18-year struggle to raise funds, the time was fortuitous for founding a hospital in the United States. Like most other hospitals at the time, Cambridge Hospital (as Mt. Auburn was known until 1947) began its existence as a purely charitable institution. During its early years, Mt. Auburn was funded by wealthy patrons who "gave a bed" so that working class patients could receive care.¹ In general, early U.S. hospitals were intended to warehouse the poor and the abandoned - those with any money or family bore their illnesses at home. But after the turn of the century, more and more patients came to Mt. Auburn not as a last resort, but to take advantage of the specialized equipment and personnel.
1. What is Mt. Auburn’s strategy?
2. What is the threat posed to Mt. Auburn by the merger of MG and BWH? Why is it disrupting the market so much?
3. How should the hospital respond to the merger?
