Merging Hospitals Makes Tangible Sense

Hospitals and healthcare are critical forces for good.  To remain so, they need to change.  Sixty percent of American hospitals are losing money. Many of these are independent, over-bedded, and unprepared for the new era of value-based care.  By contrast, the most successful providers are seeking creative ways to leverage the strengths of organizations – whether through consolidation, merger, acquisition or partnership – and discovering new economies of scale and scope. For an example of how this can work, let me direct your attention to the “City of Invention,” Akron, Ohio.

 The Akron General Health System includes a main campus hospital, community hospital, rehabilitation facility, three health & wellness centers, a hospice care center, a medical staff of employed and affiliated physicians, and visiting nurse services. The organization has provided outstanding healthcare services to the people of Akron for more than 100 years.  For the past year, Akron General has been a regional affiliate of Cleveland Clinic. On Nov. 1, it fully became part of Cleveland Clinic.  This relationship creates an integrated regional provider network offering access to a wider range of quality medical services than ever before.

 The people of Summit County (where Akron General is located) have enjoyed tangible benefits.  Cleveland Clinic has already committed $100 million to Akron General, which has resulted in a number of benefits for the community, including a new emergency department and a new electronic medical records system for the Akron General system.  We have been able to meet the Akron General’s need in cardiothoracic surgery by bringing a Cleveland Clinic surgeon to the Akron community, along with specialized services, including critical care transport (ground and air), and pre- and post-care for kidney transplant patients.

 But the largest challenge facing all providers today is cost, and here is where such relationships really make sense.  All of us are facing increasing regulation, and lower reimbursement. Size enables systems to purchase supplies at a much lower cost, to handle regulatory compliance more handily, and to find and share new efficiencies across the whole spectrum of operations.  So far, Cleveland Clinic supply chain initiatives and joint purchasing efforts have saved the Akron General system over $5.3 million.

Patients, of course, are the ultimate beneficiaries.  Twenty-first century healthcare means assuring that every patient has access to the right care, in the right place, when they need it most. Cleveland Clinic and Akron General are now linked by air and ground transport. They will soon be sharing a single medical records system. Clinicians from both systems will be working together to develop and apply metrics and clinical protocols to reduce variation in diagnosis and treatment for thousands of diseases and disorders.

 I personally couldn’t be happier about this relationship and I’m excited about the opportunity to work together in a great regional endeavor for health.

 While mergers and acquisitions aren’t the solution to every problem of healthcare today, they will be lifesavers for many systems – and many patients – today and in years to come.