Business Case Studies & Business Publications

When Competition Isn't Enough: Rural Hea...

Matherne, G. Paul,...

Case

When Competition Isn't Enough: Rural Health in Southwest Virginia (A)

Matherne, G. Paul; Goldberg, Rebecca; Bermel, Peggy; Fox, Brennan; Minogue, Kevin; Oberleitner, Ryan; Punches, Charlie; Rose, Caroline

S-0314 | Published September 6, 2019 | 14 pages Case

Collection: Darden School of Business

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Mark Seidman at the Federal Trade Commission is evaluating a proposed merger between two health care entities and competing market leaders in southwest Virginia. The rural region is characterized by poverty, unemployment, and poor population health indicators relative to the rest of the state. The merger would form a virtual monopoly, normally prohibited by federal consumer protection laws, but the two companies assert that it would allow them to remain profitable and to continue to offer health care services in the region. In the B case, Marissa Levine, the Virginia Commissioner of Health, considers reports for and against the merger as she decides whether to issue a waiver to allow it. The optional C case describes the consequences of these decisions. The case set includes excerpts from public filings, which provide rich insight into the reasoning behind each entity’s opinion. This case set explores the differences in and conflicts among the interests of for-profit health care systems, of rural, low-income residents, and of federal, state, and local governments. It allows students to engage in an in-depth discussion of the sometimes emotional issue of rural healthcare. It is suitable for students in a classes spanning health care management, nonprofit management, public policy, governance, ethics, and the social sector.

Apply stakeholder theory to complex medical facility decisions. Understand the links among poverty, rural locations, population health, and access to health care. Consider how traditional market forces might fail in meeting the purpose and goals of the health care industry.