There are numerous Day One issues that need to be addressed with health care mergers, acquisitions, alliances and joint ventures. Three immediate but sometimes overlooked issues include 1) domestic network harmonization, 2) balancing talent movement with retention, and 3) planning for per diem workers who are employed by both organizations.
1. Harmonizing Domestic Networks
Organizations typically revisit their domestic network arrangements and strategies as part of transaction planning. Decisions need to be made about what facilities to include in the preferred network and what to charge for these services. The plan's fiduciary responsibility is to make these decisions in the best interest of members, but there are many business implications that plan fiduciaries at health care organizations must also consider.
The services provided by each organization, the proximity of the facilities, the financial impact, the image/brand of each organization and services provided at each facility will likely drive employee behavior and utilization. For example, expanding the network could result in the inclusion of a hospital that was previously "off limits" to employees. This resulting potential employee enhancement could have a significant financial impact on the new organization. Options to address differences in domestic networks include:
• Expanding each organization's domestic network
• Maintaining existing domestic networks
• Modifying plan design features (e.g., amount of copay)
Employees may want to take advantage of newer or closer facilities on Day One. Modeling the potential impact of each decision (i.e., determining the most likely outcome plus other possible outcomes) will help quantify the financial impact of these decisions and the potential impact on employees.
A communication plan should also be developed to explain domestic network decisions to employees.
2. Balancing Talent Movement With Retention
Health care systems face the challenge of balancing the natural movement of employee talent with retention issues following a transaction. On or shortly following Day One, those employees with highly transferable skills in jobs with transparent pay will likely have great interest in moving to an organization with more desirable compensation and benefit programs. For example, nurses may learn about — and be attracted by — compensation programs (base pay, premiums, incentives) at another facility and may request a transfer to participate in those programs. These types of requests may result in talent gaps at a facility or other staffing issues.
Steps for enhancing retention for health care workers include:
• Reinforcing communication to employees about career advancement opportunities at their current location
• Reducing employee uncertainty by providing regular communication about integration decisions and next steps for their location and the overall organization
• Involving existing leaders in integration activities
• Ensuring base pay, premiums and other compensation programs are competitive
• Identifying and developing approaches to minimize retention risks in pivotal roles
Transactions create turmoil and raise a health care system's emotional temperature; effective retention strategies need to recognize and address the uncertainties, fears and ambitions of the people involved. Understanding what drives retention and engagement for your key talent segments, such as nurses, can be an enormous help in developing the right approaches for the short and longer term.
Other factors that are likely to attract talent include a reduction in the length of an employee's commute, the organization's reputation as a great place to work, more attractive benefits and the ability to work with known colleagues at another facility.
The best retention strategy notwithstanding, health systems should still plan for the possibility of employees requesting transfers on Day One. Organizations need to consider the compensation, benefit, policy and payroll practices that will govern employee transfers within their system. Employees will want to know the impact of a transfer as they begin to explore opportunities. A well-thought-out approach to the compensation and benefit transition is essential, especially if the organizations will not have harmonized programs for a period of time.
3. Planning for Per Diem and Part-Time Workers
Employees who work on an as-needed basis, or per diem, frequently work for more than one organization at a time. Other employees may have two positions within the newly formed health care system at the same time. They may work part time for two hospitals in the system. It is important that health care systems understand their approach for these employees in particular. Benefit programs, if offered, for per diem employees should be reviewed before Day One to understand the impact of any differences in these programs and identify potential duplication in benefits. In addition, health care systems need to determine how to treat employees who work at multiple hospitals in their human resource information systems. They need to decide whether these employees will have one employee record or a separate record at each facility; this decision must reflect the impact on downstream systems (e.g., badges, productivity systems). In addition, special care should be taken to review pay practices and the overtime calculation for per diem employees; the hours worked at the two facilities in a week may result in eligibility for overtime pay and a requirement to cover health care benefits. A detailed review of per diem workers along with a plan that takes into account employees working at multiple hospitals within a system is an essential step in getting ready for Day One.
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