For many reasons, we are continuing to see mergers being planned or occurring between various hospitals and health systems, and even including physicians practices and medical groups. Although the benefits of such acquisitions are real, often the challenges of such are not fully appreciated and the magnitude of work that is required to make them successful going forward is not totally comprehended. Because the parties in such mergers have long histories and entrenched traditions, some for nearly 100 years, I compare their coming together as challenging as adopting an 18 year-old and attempting to meld this person seamlessly into your family. Clearly, many people would wonder …..Why are you doing that?
Most healthcare leaders would agree that there are clear benefits resulting from a merger of hospitals into a cohesive health delivery system, both from business and clinical perspectives. These would include:
- Broader geographical distribution
- Potential to capture new market share
- More contracting leverage with insurance companies and other payers
- Sharing best practices
- Coordination/Integration of Care
- Consolidating of Services, creating Centers of Excellence
- Bigger population for managing chronic diseases, and for building health and wellness programs.
- Sharing of Information Management costs and expertise
- Better prepared to share risks under a bundled-payment arrangement
However, as in any new model, mergers have the potential to weaken the prior reputations of each player if both parties do not fully commit to those factors that will determine the “Brand Identity” of the newly formed organization. Many mergers emphasize the importance of determining as early as possible if such commitments will result. They have proven that without this commitment, which is often far greater than initially thought, the 18 year-old never looks like the other child that was raised from infancy, and hence the family values are never equally shared and lived out by all members of the family.
With that said, then what are the components of the “new brand” that must be explored, discussed, and agreed upon before the “adoption”/merger becomes final. These include:
- Shared Mission, Vision, and Values, which are “lived experiences”, not documents on walls
- Commitment to Excellence
- Utilizing Metrics in all that is done
- Developing, implementing, and sharing best practices
- Total transparency
- Patient Centricity
- Strong Accountability
- Leadership Training
- Organizational Ethics
Many other industries have proven that the more variability in the product, the weaker the brand. The same is true in healthcare. So they merge just to get bigger, rather than better. Sadly, the recipe for short-term success, may eventually end in long-term failure.