Roundtables

reason we have chosen not to seri- ously affiliate with a larger entity. It provides us with resources we might not otherwise have. Michael F. Stapleton, President and CEO of ompson Health (Canan- daigua, N.Y.): Our local environment is going through several affiliations; it will likely hit its peak pretty soon. As we look at the risk-based contracts we are all heading towards, it is too much risk for a community hospital to enter into one. We need to be part of a larger system that can have a risk-based contract for 2 million to 4 million covered lives. at was part of our goal [when we affiliated with UR Medicine (Rochester, N.Y.) two years ago]. We were and continue to be a very strong community hospital with growth potential. It was the right time to negotiate, as opposed to negoti- ating from a bad financial position. Well-performing community hospi- tals are starting to see the light [and realize] the time to negotiate is when you are in a strong position. Q: What do you see hospitals look- ing for and what should they be looking for in an affiliation partner? Ms. Conger: I think they're looking for people who really do have the IT, care management or health analytics capabilities — services that are hard to build — built in the system already and have the ability to extend those capabilities beyond their own health system. I think a lot of organizations are looking for analytical expertise, [which is] difficult to build if you don't have some sort of scale to build it. A lot of people are looking for a like culture, making sure they have the right cultural fit with the orga- nization they choose as a partner. A lot of organizations, too, are looking to sustain care in the community [they're in] at an affordable cost. So there's some opportunities to share or reduce the cost of care by sharing some services. Mr. Griffith: Frequently, some hospi- tals are just looking for a quick solu- tion to a deteriorating situation. at could very well lead to a lose-lose result. Hospitals should be looking for partners with similar cultures, missions and values. e culture of organizations affiliating must be similar to facilitate meaningful and open dialogue among participants. We sought a partner that also had a reputation for high quality. A high level of trust is also a key ingredient. Our level of trust and respect was built over a number of years. Lastly, the current financial strength of both organizations is a big plus in that it will allow the focus to be on improving patient care. Dr. Gruner: ey look at lots of things. Some of the le-brained issues include financial strength or the ability to improve capital for infra- structure. Looking at the partner's ability to manage their cost structure or reduce supply expenses. ey prob- ably should be looking for data or the quality systems a partner can bring to the table. In our case, people have been looking for some of our exper- tise with lean. My sense is you can look at the wish list of the things you might want to get, but you should probably start with the people side of things. If the two organizations have different approaches to people or the man- agement-level people really don't get along, it's likely that conversation [will] fall apart. It's the unstated part of affiliations, if two leadership teams don't hit it off, it's not likely to work out when you try to put it into a legal document. Leaders have to find a way to work together for these things to work. Mr. McMillan: ey should be looking for leadership alignment. In affiliations, the mission and vision of the larger hospital should be similar to the smaller facility's values. at's what's most important in my mind. ere are too many tertiary facili- ties' values are not aligned with rural hospitals' values: eir goal is to pull patients out of smaller communities, which is not what smaller communi- ties are looking for in an affiliation. Keeping patients close to home is what's important. Mr. Stapleton: First and foremost is to find a partner you can build trust with and one that can evolve into a reciprocating relationship. [UR Medicine] recognizes benefits of partnering with us: It allows them to be a larger regional player and to deliver the highest quality care in a "It does make it easier to run our organizations if we're paid more, and that's sort of the challenge for all of us: It's a good thing for us to have more revenue, but that is somebody else's cost." -Dr. Dean Gruner, CEO of ThedaCare A High-Level Look at Hospital Affiliations 3 respect your potential vision of the affiliation have open discussions management, medical staff and affiliation and solicit from "experts" that would suggest every- consider various af- and Charleston Area at the lower end of and a trusted and frustration if people do the really see whether they measure. to making sure that you're considering who think they can It's such a changing or report we read. If to consider the pos- physicians were engaged medical representation process. You cannot just the great physicians them and their input ³,QDI¿OLDWLRQVWKHPLVVLRQDQGYLVLRQ ²'RXJ0F0LOODQ&(2RI:HVW3DUN+RVSLWDO ,17(*5$7('+HDOWKFDUH6WUDWHJLHVLVDOHDGLQJKXPDQFDSLWDOFRQVXOWLQJ¿UPIRFXVHGH[FOXVLYHO\RQKHDOWKFDUH2XUWHDPRIH[SHULHQFHG They look at lots of things. Some of the left-brained issues in- financial strength or the ability to improve capital for infrastructure. partner's ability to manage their cost structure or reduce sup- They probably should be looking for data or the quality systems bring to the table. In our case, people have been looking for expertise with lean. you can look at the wish list of the things you might want you should probably start with the people side of things. If organizations have different approaches to people or the man- agement-level people really don't get along, it's likely that conversation apart. It's the unstated part of affiliations, if two leadership hit it off, it's not likely to work out when you try to put it into document. Leaders have to find a way to work together for these work. McMillan: They should be looking for leadership alignment. In affilia- mission and vision of the larger hospital should be similar to the facility's values. That's what's most important in my mind. There are tertiary facilities' values are not aligned with rural hospitals' values: to pull patients out of smaller communities, which is not what communities are looking for in an affiliation. Keeping patients close what's important. Stapleton: First and foremost is to find a partner you can build trust that can evolve into a reciprocating relationship. [UR Medi- recognizes benefits of partnering with us: It allows them to be a larger player and to deliver the highest quality care in a cost-effective way. Health benefits from cost savings on medical supplies and ex- specialty services in our community. We are learning from each sharing best practices and interacting on the board level. I find believe leaders would talk to someone about affiliations and without an existing relationship. We had great clinical relationships that we could build trust upon, which is one of the reasons we've successful. It's all about trust. 4:KDWZRUGVRIDGYLFHZRXOG\RXVKDUHZLWKKRVSLWDOOHDGHUV FRQVLGHULQJDQDI¿OLDWLRQ" Never ignore culture. Regardless of the type of affiliation you're traditional merger and acquisition or independent affiliation, largely defined by shared culture and vision for where healthcare future. Understand where healthcare is leading and you have compatibility, [which] makes a huge difference. particularly, if you're looking at a traditional merger, you really the integration process. Recognize it's going to take effort mutually successful. We created an integration office that stay focused on getting the value out of what they talked beginning. Mr. Griffith: First and foremost, you must trust and respect your potential partner. The organizations must share a common vision of the affiliation and what it may become in the long term. You must have open discussions with your own stakeholders — the board, management, medical staff and community — to educate them on the purpose of the affiliation and solicit their input. Also, in planning for the future, we constantly hear from "experts" that we need to be part of a larger system to survive. I would suggest every- one take a deep breath, take your time and carefully consider various af- filiation options. As Princeton Community Hospital and Charleston Area Medical Center decided: It may make sense to start at the lower end of the integration continuum with a clinical affiliation and a trusted and respected partner. Dr. Gruner: I think you can save yourself a lot of frustration if people do the culture compatibility part of [the affiliation] early to really see whether they all get along. The other things are a little easier to measure. Mr. McMillan: Plan carefully and wisely. It gets back to making sure that your organization's mission and values align with those you're considering affiliating with. Mr. Stapleton: The words of advice I give to my peers who think they can do it on their own is to reevaluate your thought process. It's such a changing environment, we hear about it with every email we get or report we read. If you think you are the outlier, it would be worthwhile to consider the pos- sibilities of affiliation. Also, it's important to get medical staff buy-in. Our physicians were engaged in discussions about these concepts. We have strong medical representation on our board, so they were heard throughout the process. You cannot just take it to them at the end. We were not looking to replace the great physicians that are already here; we were looking to supplement them and their input was greatly valued during the process. Q ³,QDI¿OLDWLRQVWKHPLVVLRQDQGYLVLRQ ²'RXJ0F0LOODQ&(2RI:HVW3DUN+RVSLWDO ,17(*5$7('+HDOWKFDUH6WUDWHJLHVLVDOHDGLQJKXPDQFDSLWDOFRQVXOWLQJ¿UPIRFXVHGH[FOXVLYHO\RQKHDOWKFDUH2XUWHDPRIH[SHULHQFHG

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