Between regulatory hurdles and financial imperatives, getting a partnership across the line is hard enough. But that’s just the start. A common aim of healthcare mergers is to integrate the organizations involved, yet bringing everyone together is its own jigsaw puzzle. All the pieces are there on the table, but how to bring them together and create the big picture?
A well-executed merger can create an organization that maintains access to services, provides a high-quality standard of care, creates more efficient IT and back-office functions, and offers a great experience for patients and employees alike. But even in the best scenarios, every hospital is different. It’s not just operations that come into play – balancing different organizational cultures takes some foresight. To fully realize the promise of the new organization, you can’t force pieces together that don’t fit.
Jarrard Inc. partner and Regional Health System Practice lead Kim Fox and Jarrard Inc. Senior Vice President Tim Stewart sit down to discuss the challenges facing mergers and acquisitions after the transaction is closed, the role culture plays in bringing organizations together – or keeping them apart – and how healthcare leaders can best bring the pieces together.
Here’s an overview of the conversation. You can listen to the whole episode here.
The Challenges:
Fox recounted working for an organization tasked with amalgamating two aging hospitals over a decade ago. She noted that they failed to consider the vast differences in culture and operations between the two institutions, which resulted in immense friction and turmoil when they merged. It’s a scenario that shows how culture and building complimentary practices play a massive role in integration.
Stewart proposed a thought experiment where a large national health system – Stewart Health, he conveniently named it – acquires 150 hospitals across all 50 states. In this mega-system, defining and blending each individual culture authentically is impossible . He said trying to do so could result in empty platitudes that can’t be upheld because they’re at odds with existing cultures within individual facilities. It’s not realistic to expect a rural hospital in Tennessee to share a “one size fits all” culture with an urban hospital in Nashville; the needs in those communities are too different. The challenge for the new system then becomes not dictating a formulaic culture and instead creating a consistent patient- and employee-focused experience and establishing a shared mission.
The Solutions:
- Consider the features of your health system that are non-negotiable. What are the tentpoles upholding your organization’s mission, vision, values and quality of care across the board? Ideally, there are only a handful of these.
- Evaluate whether these tentpoles exist in reality and how effectively each facility or division within the larger whole can uphold them.
- Build cultural guardrails based on those tentpoles that each institution can make authentic to their community – rather than trying to duplicate the same hospital in different regions.
- Let go of the things that don’t hold as much value as those tentpoles. Allowing for some autonomy and interpretation within those guardrails will facilitate a care environment that’s meaningful and local to its employees and patients.
- There are great benefits in being a part of a larger health system. Communicating how each organization can contribute to the greater whole, rather than providing a laundry list of changes to be made, is critical to smooth integration.
Key Takeaways:
On a small scale, if you’re bringing two hospitals together to become one entity, it’s ideal if individual cultures and practices are complementary, with areas that dovetail and can be used to pull the two together . It’s just as important to establish a plan that will blend their distinct ways of operating as it is to implement your tentpoles.
On a large scale, when integrating multiple institutions into a system, creating meaningful work that employees can do on a local level to align with established cultural guardrails will not only help keep their existing culture alive, but also translate to a higher level of self-fulfillment in employees. When allowed some autonomy, people take pride in knowing the care they’re providing is tailored to their communities needs as well as aligned with you’re the organization’s overarching mission, vision and values.
