Consolidating healthcare organizations
D., but not without some controversy, said Craig Lambrecht, president of Medcenter One at the time, and now president of the newly formed Sanford Bismarck.“People were scared to death” because there was a lot of uncertainty about potential layoffs and the autonomy of local providers, said Lambrecht.It comes eventually to any big industry, whether farming, auto-making or banking.It’s often feared, at least until one becomes familiar with it, or its alternative.Reimbursement policies, technology, regulations, capital needs, shifts in patient care and other factors have combined to create a state of flux in health care that is making organizational independence more and more difficult.To many, it’s a four-letter word—spelled with 13 letters.
While many systems have set the goals of the Institute for Healthcare Improvement's Triple Aim initiative as their own, it has been difficult to demonstrate an improved patient experience, reduced costs or dramatic improvements in the quality of care.
While there are plenty of traditional mergers and acquisitions among providers, consolidation is fundamentally about a relationship between two entities for the economic benefit of both.
As the complexity of health care increases, so do the number of legal arrangements between providers—partnerships, affiliations, joint ventures and other agreements.
These “consolidation lite” arrangements offer smaller shifts in control while giving each party better competitive footing in a grueling health care market.
The many shapes, sizes and arrangements of consolidation activity today stem from a dizzying array of drivers.