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3 things for healthcare organizations to consider about consolidation, integration

Healthcare organizations continue to consolidate through the formation of multihospital health systems and networks, while simultaneously focusing on integration to foster more efficient operations across their organization.

For instance, CVS Health is moving forward with its $69 billion acquisition of Aetna, which is slated to close in the fourth quarter of 2018. And Englewood, Colo.-based Catholic Health Initiatives and San Francisco-based Dignity Health plan to merge into one Catholic health system comprising 139 hospitals across 28 states — the largest of its kind.

The mega-mergers trend is not expected to stop anytime soon. It's likely only half of current health systems will remain after consolidation over the next decade, according to a Deloitte study.

Three healthcare executives recently discussed their own experiences with healthcare consolidation and integration at a panel session during the Becker's Hospital Review 7th Annual CEO + CFO Roundtable Nov. 13 in Chicago.

Here are three takeaways from the discussion:

1. Articulate the "why." When healthcare organizations integrate or consolidate, it's important they communicate with staff the reasoning behind their decision, according to Trevor Wright, COO of Loma Linda (Calif.) University Health, which operates six hospitals and various outpatient and ambulatory care sites. His academic medical center has sought to reduce inefficiencies in its care delivery and operating models caused by variability within the system.

Mr. Wright said he's seen quality improve and expenses decrease as a result, but the "why" behind the integration went beyond that. And that's what he communicated in Loma Linda's hospitals.

"What resonates isn't just talking about reducing costs but about being a better healthcare delivery entity," said Mr. Wright. "The ‘why’ was really important for us on our journey, and the value of communicating it is the message that we're doing this together. When you explain the why, it helps everyone understand the purpose and conveys that they are a valued member of the team."

2. Keep the community engaged. The Seton Healthcare Family, a faith-based nonprofit healthcare system based in Austin, Texas, is part of St. Louis-based Ascension. Last year, Seton added Ascension to its name as part of Ascension's national unified brand strategy, called "One Ascension."

Throughout the rebranding, Seton hospitals have sought to keep the community engaged, according to Kate Henderson, regional president of Seton Medical Center in the Austin metro area.

"As we've become more integrated, there's been a sense of loss, so [in] thinking about communication and transparency, it's required [of] us as leaders to make sure we're messaging the opportunity there,"  to use resources nationwide and apply that locally, Ms. Henderson said.

3. Ensure you're ready. David Clark, a healthcare executive with more than 25 years of leadership experience, has worked at three integrated health systems, most recently serving as regional president in the Greater Philadelphia area of Livonia, Mich.-based Trinity Health.

In his experience, Mr. Clark said he's found some organizations are not yet ready for consolidation and integration.

"So, you have to somehow create a sense of urgency or burning platform for change," he said. "It's really tough when things are going well to make changes. I think many organizations are ripe for change but don't know or accept it."

 

More articles on healthcare industry transactions:

Bankrupt Mississippi hospital receives takeover bid
CHS to divest 2 South Carolina hospitals by Dec. 31
HCA merges 2 Florida hospitals

 

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