In 2009, Connecticut's New Milford Hospital was facing significant operating losses and questions about its future viability as a stand-alone hospital. "The organization was losing patient volume, which affected the organization's ability to expand its clinical offerings, access capital, and recruit physicians," says Richard J. Henley, FACHE, FHFMA, president & CEO, Healthcare Strategic Solutions, LLC. "The board knew it was likely that the hospital would need to consolidate with another healthcare provider."
Brought in as interim CEO, Henley transitioned the 85-bed New Milford Hospital through a merger with Danbury Hospital, a larger teaching hospital about 15 miles away. The deal between the two not-for-profits was successfully completed in a year's time, and the two hospitals have since expanded and also consolidated a number of services.
Despite the speed of the transaction, the merger was anything but routine in the town of New Milford, which has a population of about 30,000. Employees had worked their entire careers at the hospital, and many had parents or siblings who had worked there, says Henley. Residents worried that they would lose community medical services, and many of the medical staff practiced only at New Milford, and felt like their livelihoods might be threatened by the merger.
"It was clear from the start that we needed to approach this with a strong sense of openness and transparency," says Henley. "The most important way of dealing with monumental change-whether mergers, employee benefit conversions, or other changes-is to have frequent, timely, and transparent communications."
How did you go about communicating the merger to employees, physicians, and other stakeholders?
Henley: It was clear that we needed a multipronged communication effort that included all of the hospital's constituencies: employees, physicians, the board, union leaders, community members, donors, major suppliers, and the media. If you communicate to one group and not another, then people start talking in the cafeteria and parking lot-and that's how falsehoods start multiplying.
For staff, we held town meetings at every juncture of our financial turnaround plan. Every employee was invited, and after I gave a presentation that summed up our progress, I opened up the floor for questions. Employees would often get up and say, "I heard such and such," which gave me the opportunity to clarify issues, address concerns, and dispel rumors.
To communicate to physicians, we spent a lot of time attending medical staff meetings and meetings of major clinical departments. At the end of the agenda, I would give an update on the financial turnaround and the merger discussions. It's very important to keep physicians informed because medical staff can often make or break a merger.
Knowing this, we added a very well-respected physician to the board committee that was negotiating the merger between the two hospitals. The physician was not then a regular board member, but he was very well regarded by his medical staff colleagues, his patients, and members of the community. By sitting on the board committee, he was able to provide regular reports to other physicians, build support, and dispel rumors.
How were you able to prove to stakeholders that you were sincere in your message?
Henley: Here's a mistake that many healthcare organizations make after merger negotiations commence. Typically, leaders put everything on hold. For example, there are no clinical advancements or new equipment purchases. The physicians and employees see that leaders are not trying to advance or develop the organization, which can really destroy morale. More important, if the merger ends up not taking place, the organization is now one year behind.
As the veteran of numerous mergers, I took the opposite approach. We did everything possible to strengthen the New Milford Hospital during the year leading up to the merger. For example, we acquired major capital equipment, including a brand new MRI and a high-speed, low-dose CT scanner, as well as a new linear accelerator for our cancer center. These investments showed the community that, even if we do merge, no one is going to close us down. I was honest with community members. I told them that some services would likely be relocated or consolidated. But I also stressed that the goal was to use the footprint of their community hospital-the buildings, the staff, the equipment-to continue to offer needed services.
In addition, by continuing to invest to become clinically stronger, we showed our medical staff, nurses, and other clinicians that we're making a strong commitment to improving services for our patients and staff. This helped minimize the defection of physicians, employees, managers, donors, and others.
What if a leader is not a good communicator by nature?
Henley: Some leaders are good at one-on-one communication, but freeze up in front of large groups. In those cases, it's better to ask another leader on the executive team to handle group presentations than to not do them at all. Each presenter needs to come across as credible, open, and transparent for the message to have true value and meaning.
What communication mediums did you find effective?
Henley: To work through and accept change of this magnitude, people need to see your message, hear it, and touch it in a variety of mediums. This communication is not a letter that you write to a group of people. You need a multipronged strategy and approach.
We worked with our marketing people to develop a well-rounded communications plan. In addition to all the various meetings I mentioned earlier, we had a monthly column about the merger in the employee newsletter. Employees could also submit questions (anonymously, if they wanted) via our intranet site. We also posted news about the merger on the hospital's website for everyone in the community. So maintaining an online presence also proved helpful.
However, when communicating major changes, you have to be very visible-you need to get out and about on the departments and units, make presentations in front of groups, and talk one-on-one to major donors, physician leaders, community leaders, etc.
What can healthcare leaders do to prepare before they have to deliver major news to a particular group?
Henley: You want to know your facts. I always ask myself, "What is this group's likely issues and concerns?" These should not be canned speeches. You need to tailor your message to the audience. For example, if you are meeting with members of the obstetrics department, put yourself in their shoes. As you think about the audience's perspective on the issues discussed, always be guided by, "What is the impact on them?"
What if someone asks you a question that you aren't prepared to answer?
Henley: Be careful not to get defensive. Be factual. If you don't know the answer, don't speculate. Say something like, "That has not yet been discussed, but I will certainly share the information with you as it becomes available."
Also it's important to always be honest and forthright. If someone says, "I was told by so and so that the IT departments would be consolidated and relocated off site …" If that has been decided and is true, and you had just denied it, then you would lose all credibility.
In some cases, you may not be able to share certain information with employees, the press, or others. But you can still be honest. For instance, you might say something like, "Those discussions are being held at the committee level, and I'm not at liberty to discuss that at this time." Or you might say, "Here's what I can share with you at this juncture. Other specifics are at a confidential juncture, and I can't discuss them yet but will do so as soon as we can share them with you."
What do leaders sometimes do wrong when delivering difficult news?
Henley: Some leaders downplay the situation and say something like, "Nothing will likely change. It will be business as usual." But in the case of something as monumental as a merger, everyone knows that is not true. I've seen leaders use this sugarcoated approach as their communications style. But these leaders will, ultimately, lose trust and respect amongst their stakeholders.
One phrase resonates in my mind: It takes a long time to build trust, but it is very easy to lose. You can spend a lot of time communicating with physicians, employees, the board, the community, and the media. But if they feel that you are not honest and transparent, then all that goodwill you are trying to foster will be for naught.
Richard J. Henley, FACHE, FHFMA, is president & CEO, Healthcare Strategic Solutions, LLC, Easton, Conn., and former senior executive in a variety of healthcare settings (RJH@HealthcareStrategicSolutions.com).
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