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3 keys to selecting affiliation partners

Affiliations and relationships are becoming more commonplace in healthcare to expand hospital networks and care delivery systems. Carefully choosing the right affiliation partners, though, is key to a successful relationship.

In a panel at Becker's Hospital Review's 6th Annual Meeting in Chicago, Kate Carow, principal at Carow Consulting, asked panelists to discuss what some of the primary considerations are when considering affiliation partners.

George Mayzell, MD, CMO and chief transformation officer at Hinsdale, Ill.-based Adventist Midwest Health, stressed the importance of picking a mutual partner. "Partnership has to be based on mutual benefit and mutual risk," Dr. Mayzell said. "It has to be growing in the same direction. If somebody does well, everybody has to do well. That way you're not cannibalizing each other."

Adventist Midwest Health affiliated with Arlington Heights, Ill.-based Alexian Brothers Health System to form AMITA Health, a joint operating company, in February 2015. The two health systems' respective religious associations were important to their missions, so through the joint operating company setup, Adventist Midwest and Alexian Brothers were able to keep assets separate as well as operational nuances while integrating risk and governance.

Mitch Wasden, CEO of Columbia-based University of Missouri Health Care, discussed pragmatic considerations in addition to culture, such as geography. "A lot of the coming together of these networks come with the belief there's going to be more narrow networks in the future," Mr. Wasden said. "It doesn't help to create a big network and everybody's in it [if] then you can't have that tradeoff between volume and price and those traditional narrow network strategies."

Anthony Armada, CEO of Seattle-based Swedish Health Services and senior vice president of Renton, Wash.-based Providence Health and Services, said Swedish faced similar integration challenges as Adventist Midwest Health. A key piece to affiliation, he said, is determining the type of governance or corporate structure the affiliation will assume.

Swedish is a secular organization while Providence has Catholic affiliations. Mr. Armada said the affiliates created an LLC so Swedish could continue to function as a secular organization without following the religious directives followed by Providence. "I don't believe a partnership or affiliation would have worked if the boards hadn't been able to take care of that," Mr. Armada said.

More articles on affiliation:

Scripps, Pioneers Memorial Healthcare in affiliation negotiations
Samaritan Regional Health System, University Hospitals to explore affiliation
3 reasons hospitals are avoiding mergers and choosing to affiliate instead

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