Over the last two weeks in separate meetings, the Boards of Directors of WMHS, Meritus Medical Center in Hagerstown and Frederick Regional Health System in Frederick, Maryland approved an alliance of these three regional health systems in western Maryland.
On June 20, 2013, our consultants, the Berkley Research Group, presented a lengthy report to board leadership from the three health systems based on a several month study on a potential alliance of the three. Their recommendation was to pursue a population health initiative such as an Accountable Care Organization; create a Management Services Organization to consolidate certain administrative services at the three health systems and to establish a Regional Quality Initiative. The boards used the summer to examine the report and to ensure that this potential alliance was in the best interest of their respective health systems and their communities.
With the rapid changes occurring in health care, the WMHS Board engaged the services of Anirban Basu, a Maryland economist, to ascertain whether bigger in health care is really better. Anirban did verify that the Affordable Care Act encourages consolidation of hospitals to better handle risk as well as to better contain the cost of care delivery. He, along with many other experts in the field, said that small to medium sized health systems would not be able to survive in the longer term. At WMHS, we then created an internal steering committee to evaluate the potential alliance. The group considered a variety of potential options for consolidation and compared each to the proposed alliance and pre-established criteria. At the end of this process, the committee recommended to proceed with the WMHS, Meritus and Frederick alliance. The WMHS Board approved the recommendation a week ago last Thursday.
With the decision to proceed being made, the hard work now begins. From time to time, I will blog on the progress that we are making, but it is a very exciting time for WMHS and our new alliance partners.