Michael Dowling: The health system CEO's affiliation playbook — 5 thoughts from a CEO who has executed 50+ agreements

As hospitals and health systems seek ways to fortify their organizational strategies amid the transition to value-based care, the drive to forge new partnerships will continue. Although analysts forecast the consolidation trend will carry on, strategic organizations are increasingly realizing the value of establishing other relationships, such as affiliations and joint ventures.

The local forces at play in a given region are a significant determinant of an organization's need to merge with, acquire or be acquired by another hospital or health system. And while transactional deals will always be necessary, ongoing financial pressures stemming from the transition to value-based reimbursement and the overall emphasis on population health management have prompted health care leaders to partner with their likeminded peers to deliver better, more cost-effective care.

The key is figuring out where your organization can do a better job working with a partner than alone, and more importantly, who to collaborate with.

In some cases, this has led to the union of unlikely bedfellows — organizations that were formerly competitors are, in some cases, coming together to pursue a joint goal. In other cases, hospitals and health systems may benefit from establishing partnerships with pharmaceutical companies, medical device makers, retail clinics or even non-healthcare entities. For example, Northwell Health has worked with The Ritz-Carlton and Tiffany & Co. as part of our efforts to improve the patient experience and our operational processes.

As with all relationships, the most positive and high functioning are symbiotic; both partners must satisfy and complement the other. They must also — at the most basic level — get along. Here are five more ideas on successful partnerships, affiliations and joint ventures.

1. Know what you need and what you can offer. Partnerships create opportunities to expand into new markets and broaden your reach. But when it comes to selecting a partner, it's important to clarify what it is they have that you want — and visa versa.

For example, we have a strategic affiliation with Cold Spring Harbor (N.Y.) Laboratory, a premier cancer research facility on Long Island. They have an international reputation, with  several Nobel laureates in their ranks. We needed to strengthen our cancer research, and they needed a clinical partner that would allow them to connect with patients. We entered into a long-term partnership in 2015. Even though we're very different organizations, we both benefit from the relationship. 

2. Don't overemphasize the short-term benefits. Focus as much on the short-term benefits of a partnership or affiliation as you do on your goals for five or 10 years down the line. Most relationships hit a rough patch in the beginning, but if you give up on the partnership because your troubles are making you doubt the viability of your short-term goals, you're being too impetuous. In other words, success takes time. Take steps to solve short-term complications, but hang in there and try to make it work.

3. Be open to new partners. Keep an open mind when it comes to discussing new relationships with different partners — even those that don't seem to make much sense in the beginning. The rapid pace of change in healthcare and our collective pursuit of innovation oblige us to at least listen to others' ideas and consider new possibilities. 

4. Don't get stuck in an abusive relationship. New partners might hit a rough patch or need to adjust their communication style to meet one another's needs, but it is also important to know when it's better to cut your losses and call it quits. If a relationship becomes abusive or dysfunctional and there is no longer any benefit for being involved, then it's time to re-evaluate the situation.

5. Determine whether you're truly compatible with a potential partner. If your organization is looking for a long-term partner — not just a fling — the two entities must mesh culturally. When considering a potential partner, ask yourself if there is mutual respect on both sides. Do those who are in charge of communication and collaboration work well together? Is the relationship riddled with conflicts or is it smooth sailing? Keep in mind, however, that conflicts are not necessarily a symptom of an impending breakup. Sometimes the issue can be resolved by changing the people or metrics at hand.

Most importantly, there must be ongoing and open communication. Two partners can disagree, but in most cases they can work it out.

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