Key Considerations for Independent Hospitals Considering a Partnership

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At the Becker's Hospital Review Annual Meeting in Chicago on May 17, Kerry Shannon, senior managing director of FTI Consulting, Alan H. Channing, president and CEO of Sinai Health System in Chicago, and Joseph Guarracino, senior vice president and CFO of The Brooklyn Hospital Center in New York City, presented key factors an independent hospital should consider when deciding whether to remain independent or partner with another organization.

One of the most important considerations for an independent hospital is the organization's current culture and how a partnership may change it. "Your culture is at stake," Mr. Guarracino said. He said independent hospitals need to define the culture, values and mission of both their own organizations and the potential partnering organizations. Independent hospitals then need to decide if the cultures can merge to create a stronger organization. Because culture is critical to the success of a partnership, hospitals need to be transparent when entering discussions with another organization. "One of the biggest mistakes is not preparing adequately to begin discussions," Ms. Shannon said. "You need to be honest about what your numbers and attributes are."

In addition to independent hospitals comparing their culture to that of a potential partner, they also need to identify the role of their culture in the community as a whole. "If you want to remain independent, [ask] what makes you unique enough to sustain that," Mr. Channing said. "You need a unique role in the market so you become indispensable." An independent hospital can become indispensable to a community by establishing health programs that meet the community's needs.

Another critical element an independent hospital should address is physicians' commitment to the organization. "How loyal are your physicians? How old are your physicians? How much business are they going to bring you over time, and what is their appetite to compete with you?" Ms. Shannon said. "If you can't count on your medical staff, you're going to have a very difficult time maintaining independence."

More Articles on Independent Hospitals:

The Future of the American Hospital: Role and Relevancy in the Next Decade
Hospital M&A Outlook 2012: 5 Key Trends

5 Ways Independent Hospitals Can Prepare for Future Success

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