Abstract
The consequences of a merger between two large teaching/research Veterans Administration (VA) specialty medical centers on the psychiatric hospital component in that merger were investigated. The existing literature on mergers, organizational culture, and change theory were reviewed and discussed with specific reference to the VA merger. The interaction between the stated goals of improving patient care, cost reduction in patient care, and perceived effects on employees as a result of the merger was determined. The research is based on case study and ethnographical methodologies. The investigator examined a contemporary phenomenon, a merger in the health care system of the Veterans Administration, within the context of the actual merger, utilizing several sources of evidence, specifically, documentation records, archival records, interviews, direct observation, and participant observation. This study found that the merger process utilized to implement the merger change had serious consequences. It also found that the consolidation did not improve patient care. There was a paper loss of positions with a resultant cost reduction in salary savings; however, the cost reduction was offset by other considerations. The study found that the human resources component in the merger, the staff, were demoralized and angry. The high ambiguity in the merger resulted in morale deterioration, increased patient incidents, distrust of management, and a violation of the psychological contract. The results of the study suggest that a much more intense planning and communication process should take place before a decision is made to merge a psychiatric hospital (where human behavior is a legitimate concern) with a medical surgical hospital. The first recommendation from this study is that VA Medical Center managers be familiarized with change planning. Another recommendation is that the planning process be modified both prior to and after the merger. A final recommendation is that all mergers be evaluated after merger.