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This is the tale of two hospitals that agreed to merge and provide an integrated array of health services to their community while they cut delivery costs.
The merger plan looked like this: Hospital A would handle all of the acute, inpatient services that both institutions had provided previously. Hospital B initially would provide outpatient services, with plans for the facility’s future use to be finalized at some future date.
How did employees of Hospital B react to the merger? Not too well, and their reaction serves as an example of the culture clashes that physician relations professionals (PRPs) face as hospitals merge with other institutions, acquire practices, and pursue other integration strategies.
Although the merged institution was able to fulfill its promise that all full-time employees of the original two hospitals would have a job, the employees of Hospital B felt left out. For one thing, there was a common public assumption that Hospital B had "lost out" in the merger and simply shut down. Besides, there had been different customs at the two original hospitals, and "B’s" former staff felt that their ways of doing things were simply disregarded. Hospital A’s employees didn’t help matters.
"They had an incredible attitude of, Why won’t these people get over it?’" says Laura Dawahare, a vice president in the Lexington, KY, offices of Shandwick USA. One of that consulting firm’s specialties is helping health care entities consolidate their operations. The merged facility hired Shandwick once it became evident that the integration wasn’t going smoothly.
Leaders at the two institutions committed two mistakes that health care entities commonly make when they pursue integration strategies, say Dawahare and Bruce Benidt, a vice president in Shandwick’s Minneapolis headquarters:
• They didn’t plan for the culture clash that would inevitably follow the consolidation of two distinct institutions. To the extent that they thought at all about the issue, leaders trusted the differences in style to work themselves out.
• They didn’t tell all parties how they would benefit from the merger. That step is particularly important when you’re trying to blend different styles of practice among physicians, who "have a reputation for not being eager to make change," Benidt says. "I believe they will change readily if consulted and if they understand their stake in the change."
When you’re preparing any group for massive change, Benidt and Dawahare say it’s important to realize that participants accept change over time. "It’s not a revolutionary leap. It’s got to be evolutionary," Benidt says. He recalls one hospital chief executive who was highly enthusiastic about the changes in health care delivery and who eventually lost his job. The administrator was "so zealous about leading the way," Benidt says. "Rather than sitting down with the docs and saying, I understand that this is a change, some of it’s good, some of it’s not so good for you,’ he was way too far out in front."
At times, it’s simply enough to acknowledge people’s fears about change, Dawahare adds. She recalls one client that planned a large construction project. To win the support of community residents living close to the site, administrators canvassed the neighborhood and held a meeting where they were available to answer questions. They also set up a telephone hotline that residents could call with questions. The client "did not get that many phone calls," Dawahare says. "But sometimes, by giving the perception that you’re open, that’s enough for people to take you at your word."
But other times, more concrete steps are needed. In the hospital merger case, for example, Shandwick’s client set up a "culture club," a committee of employees from both of the predecessor hospitals who meet to hammer out cultural issues. Benidt and Dawahare urge their clients to set up similar panels, with real power to decide such issues as, for example, how work hours are set, and which departments have priority in hiring support staff.
Other steps Benidt and Dawahare recommend include:
• Be straightforward.
"Physicians know baloney from a long way off," Dawahare observes. You need to be frank in discussing any proposed change, its good and bad effects, and how you’ll work to mitigate the bad effects.
• Don’t make promises you can’t keep.
"You’ve got to jump into the future and look back so that what you’re saying stands the test of time," Benidt says. It’s therefore unwise to state that a merger won’t result in any layoffs, or that you won’t curtail any services. Even if you don’t plan to do so now, you might be forced to later.
• Celebrate the positive aspects of any change, such as anniversaries or milestones.
The merged hospital, for example, hesitated to hold any ceremony marking the first anniversary of the merger because of resentments among staff. But "if you don’t mark milestones, people won’t make comparisons" between a current situation and what led you to make the change. In the hospital’s case, for example, the anniversary was a time to emphasize how much money had been saved, a key reason for the merger in the first place.
Integrating different practice styles is a constant challenge for the Geisinger Foundation in Danville, PA. In addition to employing about 600 physicians and operating four hospitals through the Geisinger System of Healthcare, the foundation also has a wholly owned managed care health plan.
"The incentives and the organizational purposes appear to be irreconcilable," acknowledges Ted Townsend, MHSA, the foundation’s senior vice president for marketing operations. As a payer, Geisinger strives to attract members and minimize utilization, he says. But "the culture of physicians is almost exclusively patient-driven. They want to do as much for those people as they know how to do," he adds.
"Typically, those things are reconciled outside the organization. The insurer simply tells you what he will or won’t pay for," Townsend adds. "When it’s in your family, it causes considerable consternation and challenge."
With its provider and payer sides in conflict, Geisinger shook up its leadership structure. "The first thing we did was restructure our management team into a single management team," Townsend says. That means executives are responsible for the health plan’s success as well as for the success of provider operations. The one-team approach helps all of Geisinger’s operations focus on unified goals.
Second, physicians are an integral part of management. "We have a philosophy of putting physician administrative teams in most of the critical, functional areas of responsibility," Townsend says. Of course, that helps assuage clinical practitioners who otherwise might suspect management decisions.
Instead of having the health plan’s medical directors work out of administrative offices, for example, Geisinger names practitioners to those positions, "the same physicians who are practicing at those [clinical] sites," Townsend says. "It’s not some outside medical director."
This leadership structure also helps bring payment issues into the clinical setting. For example, each year the health plan must decide which procedures it should start to cover that previously had been considered experimental. An identified group of clinical physicians makes those decisions.