Supply chain tip of the day: 4 ways to get hospital CEOs on board with centralized functions post-merger

After mergers or acquisitions, health systems typically look to move select hospital functions into a corporate organization, including those in the supply chain. While this strategy may make good business sense, local hospital CEOs are often reluctant to move functions to corporate, according to Jan van Londen, a managing director at Prism Healthcare Partners.

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He shared four steps leaders should take to ensure a smooth transition process with Becker’s Hospital Review.

  1. Share the business case for centralization and how the hospitals will benefit from these changes with local leadership.
  1. Discuss why and how having these supply chain functions at a corporate level do not compromise service, quality or response times.
  1. Show how moving back office functions to corporate will give local management more time to focus on providing patient care and building community and physician relationships.
  1. Develop a transition strategy to minimize the impact on local employees. This may require extending the timeline to give employees the opportunity to find new work or move into the corporate organization.

“Sometimes, the best option is a hybrid solution where some supply chain functions are centralized and other pieces are left at a local level. Centralizing just to do it may not lead to a stronger organization. Taking smaller steps towards centralization, demonstrating successes and then building on them to ensure a leaner, more cost effective model with higher customer satisfaction is oftentimes a more prudent approach,” says Mr. van Londen.

“When considering centralization, it is key to closely coordinate the transition with local hospital CEOs. It will go a long way in reducing resistance and lead to a more optimized operating model,” he added.

If you would like to share a tip, please email Mackenzie Bean at mbean@beckershealthcare.com.

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