In a classic tale of two hospitals, Memorial Medical Center (MMC) was originally built literally down the street from Good Samaritan hospital in Johnstown, Pennsylvania. Over the years, MMC prospered while Good Samaritan struggled with an aging facility, declining occupancy, and growing debt. Eventually, this led to the decision to consolidate into one new organization, the Conemaugh Health System.
“Many times, smaller or weaker institutions, often with aging facilities, cannot continue to compete as the healthcare environment continues to change,” explains Robert D. Lynn, AIA, principal, EwingCole, Philadelphia, who worked on this consolidation. “In some cases, area hospitals realize that instead of competing for expanded service markets, they have a better opportunity to provide a unified and broader range of services by joining into one organization.”
In a similar vein, with today's economic climate, the notion of supporting redundant specialized medical services within one community is becoming more and more difficult. At the same time, although consolidation may make all the sense in the world from a business standpoint, the reality is that sometimes institutions must be faced with dire financial straits to be willing to consider it.
“You have to have board members and executive management willing to give up their autonomy, particularly in a merger of equals where basically one management team gets displaced, and that's a real challenge,” points out David Ennis, senior vice president, Kaufman, Hall & Associates, Skokie, Illinois, a healthcare consulting firm that frequently manages mergers and acquisitions.
So while the need is often apparent, without what Andrew S. Quirk, senior vice president, Skanska USA Building, Nashville, calls “acknowledgement, buy-in, and commitment,” consolidation simply won't work.
But even if the hospitals' leadership is on board, this still isn't sufficient as experts assert that the physicians, staff, and community must be supportive as well.
