Issue link: https://beckershealthcare.uberflip.com/i/665044
79 FINANCE main hub. A multi-facility model includes several high-level facilities, and it is not so clear that one is the lead facility and the others are community hospitals. ese hospitals may neighbor one another in a contiguous market. Many systems, however, are in some ways multi-hospital and at the same time can be hub- and-spoke. NewYork-Presbyterian and Northwestern Memorial Hospital (ranked No. 11 nationally by U.S. News & World Report) have some community hospitals and tend to also be multi-facility. Northwestern has acquired hospitals in Chicago's northern and western suburbs. Its 22-story medical center in Chicago's affluent Streeterville neighborhood remains its hub. However, the other hospitals are also prominent, and Northwestern is investing in them. NYP is a mix, as it has some clear community hospitals in the suburbs and several elite institutions in the city. Yale-New Ha- ven Health System is closer to a traditional hub-and-spoke model. 5. Does the academic medical center want to remain a stand- alone facility? For example, University of Chicago Medicine (ranked No. 25 for gastroenterology and GI surgery and No. 34 in cancer nationally by U.S. News & World Report) has largely remained a standalone facility, and University of Illinois Hospital & Health Sciences System has as well. In Nashville, Tenn., Vanderbilt University Medical Center (ranked No. 1 in the state by U.S. News & World Report) has largely remained a standalone facility. While the AMC has an affiliated children's hospital, cancer center, rehabilitation hospital and clinic, it has not expanded to community hospitals or satellite locations for general acute care. 6. Can the academic medical center define a reason for be- ing? Does the AMC have one medical specialty, research area or an educational reputation that cements it as greater than all other competing institutions in the area? is is something that must be reexamined and invested in frequently. Over time, even the best missions or differentiators can lose their edge. An AMC can gradually become disconnected from a community's needs or less superior in an area. Its reason for being then becomes less discernible. Here, AMCs are oen advised to double down on their strengths. 7. Should the AMC sell to or join a third party? In the past decade, some universities looked at their AMCs and decided it would be hard to survive and provide the quality they wanted as a stand- alone facility. In Chicago, Loyola University sold its medical cen- ter to Novi, Mich.-based Trinity Health. In 2015, e University of Arizona board of regents unanimously approved a $1 billion deal between Phoenix-based Banner Health and University of Arizona Health Network in Tucson. As a result, Banner acquired the university's two hospitals and now has an affiliation with its medical school. 8. Should the AMC be a leader or developer of a statewide or re- gional alliance? University of Iowa Health Care created the Uni- versity of Iowa Health Alliance in 2012 with three other health systems. As the state's only comprehensive AMC, University of Iowa Health Care serves as the backbone for the three indepen- dent organizations to better coordinate care, increase quality and lower costs. e alliance may be a strategic way to gain scale at a lower cost and with less risk than through acquisition. University of Nebraska has pursued a similar strategy. 9. Can the AMC use licensing agreements and other branding initiatives to expand the use of its name like Mayo Clinic, Cleveland Clinic and Duke University Health System have done? ere are great questions as to whether the strategic use of one's name really furthers its mission. However, this strategy has become increasingly popular among some of the big systems and can provide cash flow and spread the use of their name. Mayo Clinic is the textbook example of this. Launched in 2012, the Mayo Clinic Care Network capitalizes on the Mayo repu- tation for high-quality care and includes providers across the country. Hospitals in the network, if approved to join and with paying a fee, have access to Mayo specialists, get to keep their independence and get to utilize the Mayo name. Cleveland Clinic has entered into similar relationships. Duke has leveraged itself through the Duke LifePoint relationship. In looking at the goals and strategies, please note that these are not exclusive. A party can develop a multi-hospital system and try and develop an international brand. e party always wants to maintain financial survival while pursing these other goals. n Moody's: Health Insurer Mega-Mergers to Disrupt Entire Sector By Ayla Ellison U .S. health insurers will have strong financial results in 2016, but challenges like the disruption from high-profile mega-mergers, will offset pos- itive trends in the credit risk profiles of health insurers, according to Moody's Investors Service. Moody's analysts are encouraged by health insurers' membership growth in the first nine months of 2015. During that time, health insurers rated by Moody's reported overall organic membership growth of 5.3 million members, with almost 4 million of that growth in the government segments. "In spite of the difficulties of implementing the ACA and weathering a slow economic recovery, U.S. insurers have been able to maintain solid membership growth and strong earnings," said Moody's Senior Vice President Steve Zaharuk. Moody's outlook for the health insurer sector will remain stable, as payers will benefit from strong membership growth in the government segments and disciplined pricing over the next 12 to 18 months. However, the positive trends will be offset by the con- tinued underperformance in 2016 of individual com- mercial plans sold on the ACA exchanges and potential disruptions from mergers. Moody's said the sector as a whole will be disrupted by three major mergers an- nounced in 2015: Aetna-Humana; Anthem-Cigna; and Centene-Health Net. "Last year's mega-mergers are going to have long ef- fects in 2016 and beyond," said Mr. Zaharuk. "The six in- surers involved in these deals currently cover 92 million members, all of whom could be affected by possible disruptions in service or networks as the integrations move along." The three health insurer mergers are projected to close during 2016. n