For many small, community stand-alone health systems across the country, eventually merging with another larger healthcare organization remains a distinct possibility. Until that day arrives though – if it does at all – these organizations must continue to focus their efforts on meeting the quality care needs of the local community.
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This was the overriding message during the Monday morning education session, "To Merge or Not to Merge: Hospital Executive Panel Discussion," at the Healthcare Financial Management Association's ANI 2013 in Orlando, Fla.
Panelists addressed the advantages and challenges of maintaining stand-alone status, factors that could influence a decision towards a merger and various affiliation strategies that could be applied if need be.
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Many of the challenges stand-alone hospitals around the country have been facing aren't much different than challenges all hospitals seem to facing said Michael Allen, CFO of Winona Health in Winona, Minn.
However, "In a stand-alone hospital, though, we really have to execute well with high-quality measure scores," he said. "You have to be just as good or better than everyone else and if you aren't, you could find yourself in trouble. Our competitors have a lot of resources and that could be one of our biggest challenges."
Myron Machula, CFO of Enloe Medical Center in Chico, Calif., said that for many community stand-alone hospitals, it's gotten to the point where collaborations with other facilities are unavoidable.
"We may have a cancer case that just can't be helped at our facility. I don't believe we are at a point where we can avoid looking at other types of collaborations just short of a merger," he said. "Over time the amount of collaboration you have may grow. At some point you have to decide if the association should grow to something larger in terms of a merger."
If a merger were to become necessary, Machula believes having a culture-match among organizations is the key to a successful merge.
"I know that structure is one thing – putting together the nuts and bolts. Culture is another. And if the culture does not fit, the merger won't either," he said. "So you have to find the right organization and have the financial strength to handle to merge. Make your decision when you are strong."
While there are certain advantages to partnering with larger healthcare organizations, especially as the healthcare world continues to evolve heading into 2014, there are numerous reasons why smaller, stand-alone hospitals are important to communities, said Harold Dupper, vice president of finance at Platte Valley Medical Center in Brighton, Colo.
Among those reasons is what patients want from their healthcare providers.
"I think that healthcare in America is still a personal preference and many prefer to have a personal connection with their providers," said Dupper. "I think we can provide the certain kind of service people are looking for."
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