Hospital partnership doesn't have to mean merger

While healthcare mergers and acquisitions rose last year, hospitals are considering other partnership models besides the sometimes dreaded "m" word. Besides the full-asset acquisition, community hospitals are floating options, such as affiliation or the creation of a parent corporation.

Just yesterday, Cooley Dickinson Hospital in Northampton, Mass., announced it is affiliating with Massachusetts General Hospital. The trustees voted for the partnership, saying that healthcare restructuring is happening faster in the state than the rest of the country, according to a Cooley Dickinson press release. In addition, the community hospital said it chose to partner because of decreasing reimbursements, goals of quality care and needed infrastructure support for population-based care.

"All of this will mean growing operational stress for hospitals and physicians. Organizations that thrive in this world will be those where there is clinical and economic integration among hospitals and physicians for delivery of acute care, chronic care, and population-based care," Cooley Dickinson said. "Without a partner, Trustees envisioned that the operational stresses could weaken Cooley Dickinson in the future."

Affiliation deals can mean that each hospital retains separate finances and boards, as is the case with Bassett Medical Center in Cooperstown, N.Y., with six affiliated hospitals. Each hospital also has a CEO and management services, but they fall under a parent company that appoints board members, the Observer-Dispatch reported. Under the affiliation, the deal allows the hospitals to provide clinical services that they didn't offer before.

"It's a different model than most," Bassett President and CEO William Streck said. "It provides more autonomy at the local level than most other models, but it has worked for us. It's hardly flawless, but it has proved a way to accomplish things for us."

Those possible flaws are exactly what many organizations are afraid of when it comes to partnership deals. The American Hospital Association last month provided guidance for changes in hospital ownership, including mergers, integrated networks or accountable care organizations.

"Hospital leaders must approach potential integration opportunities in a manner that protects the delivery of health care services in their communities but recognizes the hospital's need to adapt to the changing environment," the AHA report states. AHA encourages organizations to consider how the partnership will fulfill the hospital's core mission, fall in line with strategic planning, ensure quality of care or avoid potential liabilities.

For more information:
- here's the Cooley Dickinson press release
- read the Observer-Dispatch article
- check out the AHA guidelines (.pdf)

Related Articles:
Have hospital mergers gone too far?
Hospital mergers not for everyone
Independent hospitals fight consolidation trend
AHA offers guidance to hospitals on verge of M&As
Healthcare M&A finishes healthy in 2011
Hospital mergers trendy but offer few benefits

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