Medical breakthroughs and innovative techniques and equipment have enabled hospitals to treat a greater number of patients. However, these advances have also led to increased costs and the need for more specialized services. Hospitals are striving for growth and higher efficiency. The desire to control rising hospital sector costs, while simultaneously implementing expensive medical advances, has driven managers and politicians to find more efficient ways of organizing hospitals; this has involved hospital mergers. However, the potential impact of such mergers on the workforce has often been left out of planning considerations.
The international hospital sector is experiencing what has been labeled as ‘merger mania’ [
1]. The Norwegian hospital sector, in particular, has undergone a high number of hospital mergers. Between 1992 and 2000, more than 27% of Norwegian hospitals were involved in mergers [
2]. In 2001, all Norwegian hospitals were transferred from local county to centralized state ownership, which further increased the rate of mergers; from 2000 to 2010, more than 90% of public hospitals were involved in one or more mergers.
The main argument for merging hospitals has been to increase efficiency through economy of scale effects. However, the actual outcome of mergers is disputed [
2‐
4]. A study of Norwegian hospital mergers demonstrated that a single administrative merger can have a significant negative effect on a hospital’s cost-efficiency, whereas more profound mergers that involve a reduction in acute care, may have a positive effect on cost-efficiency [
2]. Although merging can benefit efficiency, they may also incur hidden costs. For example, costs arising from increased sickness absence among employees who have been exposed to restructuring processes. A large body of research has documented that workplace reorganization can have adverse effects on employee health [
5,
6]; the current literature suggests that mergers may also cause similar negative consequences.
Norwegian hospital mergers have not been characterized by major downsizing of personnel. Any potential negative health effects following such organizational changes are unlikely to be caused by job insecurity, but rather by the merger itself and associated change-related activities. The hospital sector accounts for a significant part of the Norwegian labor market, so even small effects on sickness absence rates can have a large impact on resource use across the sector.
Mergers and long-term sickness absence
Several reasons have been proposed for why organizational changes, like mergers, often lead to adverse health effects and increased sickness absence. During large organizational changes, employees often experience added demands because of these changes [
13,
14]. At the same time, changes may cause employees to feel more uncertain about their jobs and what is expected of them, and how the changes will affect their employment [
13,
15‐
17]. The uncertainty and involuntary nature of many change processes often results in employees feeling a loss of control [
18,
19]. In this way, organizational change can lead to working conditions that are described in the literature as being strained, and possibly harmful to employee health [
20,
21]. Furthermore, increased levels of conflict have also been postulated as being a potential stressor during change [
13], and cultural clashes during mergers are receiving increased attention [
22‐
25]. Mirvis [
26] described experiences related to the acquisition of a manufacturing company; this case study illustrated how frustration and conflict can be fueled by differences between the acquiring and acquired firm, i.e. because of different business systems, ways of running the company, and strategies. Vaananen, Pahkin, Kalimo and Buunk [
27] demonstrated that how mergers impact an individual employee’s job can affect their post-merger subjective health.
Current literature supports possible negative consequences from mergers and acquisitions, although not conclusively. The potential health effects of mergers have received less attention in the literature than other major organizational changes, such as downsizing.
Probst [
28] focused on the merger between five state government agencies involved in providing public health and human services. This merger spawned flourishing rumors of layoffs, although only minor layoffs actually occurred. Employees, identified by management as being affected by the merger, reported poorer physical and mental health 6 months after the merger was announced compared with immediately prior to the announcement. Similarly, Schweiger and Denisi [
19] studied the effect of a merger between two plants engaged in light manufacturing. They found that immediately following the merger announcement, the employees’ absence days increased, together with their experience of global stress and uncertainty. Layoffs were a possible consequence of the mergers, because the opportunity to eliminate redundant functions and staff was one of the expected gains from the merger. Brown, Zijlstra and Lyons [
29] investigated the effect of restructuring in merged NHS trusts. They found that affected nurses reported significantly higher stress and job pressure compared with non-affected nurses; some affected nurses also reported lower quality of life than non-affected nurses. Lindberg and Rosenqvist [
30] focused on two merged Swedish hospitals, which included downsizing and implementation of Total Quality Management (TQM). They found that sick leave in the merged hospital increased more rapidly than in the general Swedish population.
In contrast to the above studies, Westerlund, Ferrie, Hagberg, Jeding, Oxenstierna and Theorell [
31] found no significant effect of mergers on long-term sickness absence (absence spells of 90 days or longer) or hospital admissions among 24,036 Swedish employees in public and private organizations. They analyzed the effect of mergers that occurred over a 6-year period (1990–96) on health outcomes during the following 3-year period (1997–99). They found significant negative health effects from large expansions and moderate downsizing, but no effects arising from mergers. The potential lag time between merger exposure and the health measurements (2 months to 9 years) could have led to an underestimation of the effect, if the effect is assumed to be relatively immediate. Because this was a time of downsizing in Sweden, sickness presence could also be a potential confounding variable, indicated by a similar lack of effect of major downsizing on sickness absence rates. Netterstrom, Blond, Nielsen, Rugulies and Eskelinen [
32] investigated depression prevalence in Danish municipality and county employees, before and after a reform that merged several municipalities and counties. They found no significant change in depression associated with the merger. Their pre-merger control was measured for 9 months leading up to the merger (and then for another 9 months after the merger announcement). As a consequence, the control could have been affected by the employees’ knowledge of the impending merger.
Previous studies have focused mostly on the effect of one or a few mergers, and sometimes only the first or last phase of the merger. More comprehensive research is needed to investigate the health effects across mergers, and through the whole merger process. The Norwegian hospital sector provides a good case for such research, because of the high frequency of mergers and the availability of reliable longitudinal sickness absence data.
Mergers in the Norwegian health sector are likely to have directly and indirectly affected its employees’ working conditions by increasing the frequency of internal changes. First, they were initiated from above and outside the main organization with the merger forced upon the organization by the regional health authority. The employees’ control over the decision-making process was likely to be low. In this way, the mergers may have directly affected the employees’ working conditions, in particular by increasing their uncertainty and loss of control. Second, the mergers were introduced to enable internal changes and trigger change activities to explore economy of scale effects relating to patient treatment and administration [
33]. Merging hospitals have been shown to have higher degrees of internal organizational change following mergers compared to hospitals that have not undergone merging [
34]. Other studies have demonstrated that a high frequency of internal changes is likely to adversely affect employee health and sickness absence, by further impairing working conditions [
35,
36]. Finally, several mergers have resulted in more permanent structural changes, such as an additional management level. Furthermore, several units lost their local leader, the new management team being located away from the hospital with less direct contact with employees. Such centralization processes can also increase sickness absence levels [
37].
To measure the full effect of mergers on long-term sickness absence, it must be analyzed over an extended period of time. The immediate effects would likely involve feelings of insecurity elicited by the idea of merging; the subsequent effects would take place when the actual change activities are underway.