"The Ronan Report" provides insight about the activities at the Western Maryland Health System in Cumberland, Maryland, and about the changes taking place in healthcare today from a CEO's perspective.

Friday, October 25, 2013

The Urge To Merge

At the Governance Institute meeting earlier this week, there was a session on Networking & Partnering presented by Marian Jennings, who facilitated our first WMHS Board Retreat back in 1996.  She provided a perspective on the new wave of mergers, affiliations and alliances.  For this calendar year to date, there have been 93 hospitals or health systems in some form of affiliation.  We are on a record pace this year to exceed the most affiliations of some sort since the 90's, when they last occurred at a record pace.  Last year, there were 105 such affiliations, the most in this decade.  

Anyway, the question was raised during the breakout session as to whether or not hospitals needed to affiliate in this era of the Affordable Care Act (ACA).  Her response was that you don't have to affiliate if you possess most or all of the following characteristics:
  •       Strong financial performance
  •    Sole community provider
  •    Well-aligned primary care physician base
  •    Ability to manage population health
  •     Sufficient population base to support a population health management infrastructure
  •   Consistently named one of the top 100 hospitals
  •   Top performer in clinical outcomes
  •    Possess a strong positive brand
  •    Well-distributed outpatient centers throughout the service area.  

After hearing that list, I guess it is safe to say that most will be affiliating in some form.  There are very few hospitals or health systems that possess a few, let alone the majority or all of characteristics provided by Marian.  I think that the approach taken by WMHS, Frederick and Meritus to form an alliance that will focus on a few key areas is the best way to go.  To validate our approach, I keep reading about hospitals and health systems in GA, NJ and PA pursuing similar alliances as a way to remain viable under ACA.

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