Roundtables

A High-Level Look at Hospital Affiliations 5 cost-effective way. ompson Health benefits from cost savings on medi- cal supplies and expanding specialty services in our community. We are learning from each other through sharing best practices and interacting on the board level. I find it difficult to believe leaders would talk to someone about affiliations and mergers without an existing relationship. We had great clinical relationships established that we could build trust upon, which is one of the reasons we've been so suc- cessful. It's all about trust. Q: What words of advice would you share with hospital leaders consider- ing an affiliation? Ms. Conger: Never ignore culture. Regardless of the type of affiliation you're considering, a traditional merg- er and acquisition or independent affiliation, success is largely defined by shared culture and vision for where healthcare is going in the future. Un- derstand where healthcare is leading and you have cultural compatibility, [which] makes a huge difference. More particularly, if you're looking at a traditional merger, you really can't ignore the integration process. Rec- ognize it's going to take effort and has to be mutually successful. We created an integration office that has helped us stay focused on getting the value out of what they talked about at the beginning. Mr. Griffith: First and foremost, you must trust and respect your potential partner. e 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 everyone take a deep breath, take your time and carefully consider various affiliation options. As Princeton Community Hospital and Charleston Area Med- ical 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. e 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: e words of advice I give to my peers who think they can do it on their own is to reevalu- ate 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 possibilities 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 representa- tion 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. n Dr. Gruner: They look at lots of things. Some of the left-brained issues in- clude financial strength or the ability to improve capital for infrastructure. Looking at the partner's ability to manage their cost structure or reduce sup- ply expenses. They probably 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 expertise 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: They should be looking for leadership alignment. In affilia- tions, the mission and vision of the larger hospital should be similar to the smaller facility's values. That's what's most important in my mind. There are too many tertiary facilities' values are not aligned with rural hospitals' values: Their goal is to pull patients out of smaller communities, which is not what smaller communities 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 Medi- cine] recognizes benefits of partnering with us: It allows them to be a larger regional player and to deliver the highest quality care in a cost-effective way. Thompson Health benefits from cost savings on medical supplies and ex- panding specialty services in our community. We are learning from each other through sharing best practices and interacting on the board level. I find it difficult to believe leaders would talk to someone about affiliations and mergers without an existing relationship. We had great clinical relationships established that we could build trust upon, which is one of the reasons we've been so successful. It's all about trust. 4:KDWZRUGVRIDGYLFHZRXOG\RXVKDUHZLWKKRVSLWDOOHDGHUV FRQVLGHULQJDQDI¿OLDWLRQ" Ms. Conger: Never ignore culture. Regardless of the type of affiliation you're considering, a traditional merger and acquisition or independent affiliation, success is largely defined by shared culture and vision for where healthcare is going in the future. Understand where healthcare is leading and you have cultural compatibility, [which] makes a huge difference. More particularly, if you're looking at a traditional merger, you really can't ignore the integration process. Recognize it's going to take effort and has to be mutually successful. We created an integration office that has helped us stay focused on getting the value out of what they talked about at the 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 SK\VLFLDQVHUYLFHVHPSOR\HH SK\VLFLDQHQJDJHPHQWODERUDQGH[HFXWLYHSODFHPHQW²WRKHOSKHDOWKFDUHRUJDQL]DWLRQVDFKLHYHEXVLQHVVJRDOV 3KRQH :HEDGGUHVVZZZ,17(*5$7('+HDOWKFDUH6WUDWHJLHVFRP(PDLO "In affiliations, the mission and vision of the larger hospital should be similar to the smaller facility's values. That's what's most important in my mind." -Doug McMillan, CEO of West Park Hospital

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