Consolidation can lead to quality and cost-efficiency gains if organizations are able to reshape their merged assets into a fully integrated system. At HFMA’s Thought Leadership Retreat this past October, leaders from recently merged and affiliated systems shared the following keys to success.
Have a compelling vision. For Catholic Health East (CHE), which merged with Livonia, Mich.-based Trinity Health to become CHE Trinity, knowing that its faith-based mission would be preserved and strengthened through the merger with Trinity was a key driver behind the decision. Another driver was the ease with which the organizations’ cultures aligned. “In fact, when we spoke with rating agencies, that was one of the first questions they asked: ‘How well aligned are your cultures?’” said Jenny Barnett, executive vice president and interim CFO and treasurer for CHE Trinity.
Be sensitive to employees’ feelings. Respect the ambivalence and anxiety some employees will experience after a collaboration, affiliation, or merger. Let them know: “If you don’t want to get on the bus, that’s OK, but we’re not changing our destination.” When two hospitals in west-suburban Chicago—Central DuPage Hospital and Delnor Hospital—merged in 2011 and became known as Cadence Health, fewer than 5 percent of employees chose not to get on the bus, according to John Orsini, executive vice president and CFO for the health system. In fact, organizations may find that getting the right people on the bus is hardest.
Develop sustainable energy among leaders and staff. Find some early wins in the initiative, suggested Sandra Van Trease, a group president for BJC HealthCare in St. Louis, one of four organizations in the Missouri market, the Illinois market south of Peoria, and parts of Kansas and Arkansas that form the BJC Collaborative. For example, early wins for the BJC Collaborative included millions of dollars in savings in the area of clinical engineering and partnerships among member organizations to expand pediatric, cardiology, and bariatric services. When Baptist Health System in San Antonio merged with Nashville, Tenn.-based Vanguard Health System (now part of Tenet Healthcare Corporation) in 2003, it gained immediate access to capital (a $200 million commitment in the first six years after the merger), increased operational expertise, and greater contracting leverage with payers and suppliers, according to Jeff Eppinette, former CFO for Northeast Baptist Hospital in San Antonio (and now CFO, Remington Medical Resorts).
Work to gain and maintain CEO commitment. When big decisions are made, ensure that initiatives stay on course, as delays or changes in approaches midstream may cause uncertainty among staff. Ensure that CEOs and other key leaders meet in person regularly, and recognize that not all of the organizations will experience “wins” at the same time.
Ensure clarity in communications to leaders and staff. Engage with leaders and staff to test their understanding. “Don’t assume that anyone understands anything,” Van Trease said.
Jeni Williams is managing editor, content development, HFMA’s Westchester, Ill., office.
Publication Date: Friday, November 01, 2013