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Banking and hospital companies represent great threats to our economic vitality—at least that’s how they are characterized in the daily press. Banks have become so large that many critics view them as unmanageable, too large for government bailout, or too big to fail. Alternatively, the highly fragmented hospital industry is accused of contributing to the excessive cost and mediocre effectiveness of the healthcare services industry. This article considers the disparate approaches taken to industry consolidation by commercial banking and hospital companies over recent decades with an eye toward aiding future decision making by hospital boards. More Info
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Hospital consolidation is on the rise as organizations work to prepare for the changes and challenges of health reform. This case study profiles two organizations: one that recently entered into a partnership and another that has acquired several hospitals throughout the years. It provides insight into the benefits of partnering and what goes into finding the right partner. This case study also looks at the governance restructuring that occurs when organizations join together and best practices in ensuring that proper communication is taking place across the system. More Info
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Hospital consolidation is on the rise as organizations work to prepare for the changes and challenges of health reform. The new healthcare environment is calling for reduced costs, better care, less waste, and a focus on population health. By merging, affiliating, or partnering, hospitals and health systems can increase their capital and resources, allowing them to offer the highest-quality care to the patients they serve. In this excerpt from an upcoming case study, we profile two organizations: one that recently entered into a partnership and another that has acquired several hospitals throughout the years. It provides insight into the benefits of partnering and what goes into finding the right partner and the governance restructuring that occurs when organizations join together. More Info
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While the fundamental principles of governance don't change, span of control, diversity of activities, and political considerations increase, often exponentially, as multi-hospital systems develop and grow. At the governance level, some systems are flourishing while others are struggling. This Webinar explores the challenges of moving from an independent hospital board structure to an effective system governance structure. More Info
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Held September 30 through October 2, 2012, at The Phoenician in Scottsdale, AZ, The Governance Institute’s System Invitational focused on a critical imperative as healthcare systems transition from treating individual sickness to managing population health—the need for constant or even accelerated innovation that simultaneously improves quality and reduces costs. The meeting featured faculty who are at the frontier of innovation in the healthcare arena. This report summarizes the presentations and discussions at the meeting.
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In the wake of national health reform, the global economic turn down, and other environmental forces, multi-hospital systems have been forming and growing in order to improve their acute care performance, develop scale to access capital at competitive rates, and begin the journey to managing the care of a defined population. A natural consequence of this aggregation has been the creation of a parent company to govern the affairs of the new entity. But as independent hospitals consolidate into multi-hospital systems, governance becomes even more challenging. In this article, Don Seymour looks at how to transition to an effective system governance structure. More Info
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A joint venture between Duke University Health System and LifePoint Hospitals, Inc., Duke LifePoint, recently completed the acquisition of Marquette General Health System. This combination represents the most significant use of the rapidly evolving buyer joint venture (BJV) structure. Most investor-owned hospital companies are currently attempting to form similar arrangements with non-profit partners. Non-profit companies, both large and small, should consider the significance of these sorts of arrangements as they contemplate the impact of healthcare reform on their businesses. In this article, James E. Burgdorfer explores the practical and market features of BJVs, reviews the objectives of non-profit participants, and considers potential future applications of the structure. More Info
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The ultimate authority of an independent, stand-alone not-for-profit hospital is its governing board. It is viewed by its community as their “fiduciary,” holding the hospital and all its assets in trust for the sole benefit of the community. If the board decides that the hospital can no longer survive on its own and fulfill its mission to the community, it may seek to affiliate with a larger not-for-profit multi-hospital system. In this arrangement, the hospital delegates certain powers and authorities to the “system,” which then becomes the parent serving as sole corporate member. Who then, in this system arrangement, serves as the trusted fiduciary for the hospital’s community? More Info
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The Governance Institute’s Spring 2012 System Invitational in Washington, D.C., brought together a distinguished group of faculty with about 40 representatives from 10 health systems across the U.S. to discuss critical issues facing their organizations in today’s rapidly changing environment. This report summarizes the key messages from the presentations and discussions that took place at the meeting.
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Health reform coupled with continuing downward pressures on healthcare costs and utilization trends, as well as increasing demands for enhanced value will cause accelerating consolidation and provider integration. More specifically, it is likely that community health systems will reach points where most, if not all, physicians and other licensed providers are employees of integrated health systems. This white paper argues in favor of a transformation of structure and function of governance for community health systems destined for higher levels of clinical and business model integration.
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