Introduction research highlights several key themes

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INTRODUCTION RESEARCH HIGHLIGHTS Several key themes emerged over the course of our research on acquisition and affiliation strategies. An emphasis on value-focused strategies. The health- care organizations interviewed for this report understand that the best way to gain market share is by meeting care purchasers’ demand for high quality, convenient access, and competitive prices. They are seeking acquisition and affiliation partners that will help them achieve these goals. An understanding that different needs require different approaches. Organizational needs vary greatly depending on local market conditions and the organization’s mission, existing capabilities, and future goals. Organizations are considering a range of partners and partnership opportu- nities to meet these needs, often pursuing several options simultaneously. The emergence of new organizational combinations. Healthcare organizations are growing both horizontally (e.g., hospital to hospital) and vertically (e.g., healthcare system to health plan), and different types of organizations are combining forces (e.g., academic medical centers and regional health systems). A blurring of the lines between competition and collaboration. Market conditions and organizational needs are opening up collaborative possibilities for organizations that may have viewed one another as competitors. The need to change governance and support structures as organizations change. As organizations grow and gain new capabilities, they are reevaluating and reshaping existing board and management structures, IT systems, financial systems and fund-flow models, and physician relationships to accom- modate the changes. INTEREST IN ACQUISITION AND AFFILIATION ACTIVITY Entered into an arrangement in the past five years Considering an arrangement in the next 12 months Open to an arrangement longer term (e.g., beyond 12 months) None of the above Note: Respondents could choose more than one answer. 0 10% 20% 30% 40% 50% 30% 34% 42% 19%
2 hfma.org CLINICALLY INTEGRATED CARE DELIVERY NETWORKS Hospitals, health systems, physician practices, and other providers may seek to create clinically integrated care delivery networks that will provide convenient access to high-quality services at competitive prices and can be marketed to health plans, employers, and individual consumers. The 2013 combination of HealthPartners and Park Nicollet Health Services in the Minneapolis-St. Paul market, for example, “completes the geography for a combined entity with a ‘shared DNA’ of careful stewardship of community resources to compete across the entire metropolitan area with a system emphasizing primary and specialty care services in clinics and ambulatory settings,” says Nance McClure, HealthPartners’ COO. POPULATION HEALTH MANAGEMENT Many organizations see inevitable—and potentially rapid— movement toward a system in which providers will be asked to assume financial risk for managing the health of a defined population. They need access to data on popula-

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