Your Health System Strategic Alliance: A Solution for COVID-19 Recovery Plan
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With all the changes occurring in the hospital systems due to COVID-19, the most significant is the financial pressure on hospitals, physician groups and health systems. How will healthcare systems continue to provide safe, quality care to patients with the ongoing challenges and changes in the healthcare delivery system?
With the need to move into newer types of healthcare delivery such as telehealth, screening, expanded care at home by different kinds of professionals, the solutions can require a significant investment and technological expertise. |
Merging with a Large System May Not be an Answer for Some Organizations
Smaller to mid-sized systems may feel forced to join a large system to gain economies of scale, access to technology and new ways of thinking of healthcare delivery. With this solution, the organization should be prepared to give up its independence which may not be in the best interest of the community it serves. It also needs to be ready to expect:
While mergers may be a solution for some, many healthcare organizations have concerns that the timing may not be right due to issues related to COVID-19.
Smaller to mid-sized systems may feel forced to join a large system to gain economies of scale, access to technology and new ways of thinking of healthcare delivery. With this solution, the organization should be prepared to give up its independence which may not be in the best interest of the community it serves. It also needs to be ready to expect:
- A time consuming process
- Giving up independence of governance and administration
- Potential for bureaucracy
- Economies of scale not always easily identified
- Covering administrative overhead of a large system
- Centralized administrative services which may be slow to respond and/or not fully conversant with local needs
- May create local administrative turnover limiting continuity of leadership
- Concern about physicians maintaining a voice
While mergers may be a solution for some, many healthcare organizations have concerns that the timing may not be right due to issues related to COVID-19.
A Better Option for Those Systems is to Join or Develop a Strategic Alliance with Other Healthcare Organizations
Strategic alliances or other partnerships are another option and are typically a network offering complementary patient services. Even strong health systems recognize that creating a sustainable healthcare industry requires significant change.
Many organizations have turned to creating strategic alliances by creating an organization of member health systems which can achieve:
Alliances allow a healthcare system to create both scale and efficiency without the integration challenges of merger or being acquired. They will also preserve and enhance the independence and economic strength of the health system members. Bringing organizations together to share best practices and create innovations will improve healthcare for the community while also reducing costs and improving performance.
Health systems that have a broader geographic reach and larger population base will be better suited to react and sustain operations. However, it is critical that partners negotiate agreements that protect their respective interests.
Strategic alliances or other partnerships are another option and are typically a network offering complementary patient services. Even strong health systems recognize that creating a sustainable healthcare industry requires significant change.
Many organizations have turned to creating strategic alliances by creating an organization of member health systems which can achieve:
- Reduced costs through economies of scale
- Improvements in financial performance
- Strengthen hospital/physician relationships
- Improvements in patient care
- Shared intellectual knowledge of clinical care
- Shared technologies and innovative healthcare delivery models
- Improved market positioning
Alliances allow a healthcare system to create both scale and efficiency without the integration challenges of merger or being acquired. They will also preserve and enhance the independence and economic strength of the health system members. Bringing organizations together to share best practices and create innovations will improve healthcare for the community while also reducing costs and improving performance.
Health systems that have a broader geographic reach and larger population base will be better suited to react and sustain operations. However, it is critical that partners negotiate agreements that protect their respective interests.
How do You Determine if a Strategic Alliance is Right for Your Organization?
There are several factors to take into consideration when assessing whether your organization would benefit from a strategic alliance.
- Organizational Assessment – The first step is to evaluate your organization’s goals and its position in the marketplace to competitors. How do your services compare with other healthcare systems? Are there complementary services being offered by another healthcare organization?
- Market Demand – A study of the market needs to be done to determine if your organization is positioned to delivery what the market demands. What are you doing to keep up with technology and consumer needs? Are you delivering the services that your community is looking for?
- Leadership Commitment – It is important to bring all stake holders to the table including top leadership, physicians, and board members to discuss and agree on the benefits of a potential strategic alliance. A successful outcome is dependent on a team approach with strong leadership throughout the process. Do you have a strong commitment from your leadership?
- The Right Culture – A Partnership will likely not succeed if the organizations have vastly different or incompatible cultures. Do the potential Partner organizations have similar values and goals? Do they have a dedicated leadership team that will value the Partnership? Do they have complementary resources and service offerings that benefit both organizations?
There are many benefits for healthcare organizations in developing a strategic alliance. Leadership needs to have a full understanding of the long-term benefits, potential challenges, and market potential for a successful implementation.
We Have the Experience to Assist You with Finding the Right Strategic Partners
We have the experience and expertise to assist you with achieving your goal of finding the right Strategic Partner to make your organization stronger and more viable into the future. We can assist you with:
Unlike other consulting firms, our consultants are all past C-Suite healthcare executives who understand the challenges facing CEO's, COO's and CFO's today. We have literally been in your chair and have experienced it first hand.
We have the experience and expertise to assist you with achieving your goal of finding the right Strategic Partner to make your organization stronger and more viable into the future. We can assist you with:
- Internal organizational evaluation assessment of your service offerings and your position in the market
- Evaluation of external market demands for services and technology
- Identify potential Strategic Alliance partners in your market that offer complementary services
- Oversee the interests of your organization during the entire process
Unlike other consulting firms, our consultants are all past C-Suite healthcare executives who understand the challenges facing CEO's, COO's and CFO's today. We have literally been in your chair and have experienced it first hand.
To contact a Partner about how we can assist you with your Strategic Alliance click here.
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