The recent decision by BJC Health System to continue its membership in Voluntary Hospitals of America underscores the challenges and opportunities faced by the national alliances.
Before merging, the three St. Louis hospital organizations that combined to form the BJC system belonged to VHA, American Healthcare Systems and Premier Health Alliance. The scenario of merged hospital-based organizations having to choose between competing alliances will be repeated frequently in the volatile world of healthcare reform. The situation is bound to produce spirited competition, bruised feelings and agonizing deliberations.
Beyond the tug-of-war competitive dramas are the impending strategic changes that will help forge the future of the alliances. Actually, these national groups are entering the third significant phase of their evolutionary development. In the mid-1980s, the fledgling organizations were viewed as the best defense against investor-owned hospital companies that were hungry to build national chains. It was a time of ambition and risk-taking, with more than a few missteps along the way. By the late 1980s, alliances had grown more mature and began concentrating on their perceived strengths. Hospital and system members began viewing their memberships as investments and expected a good rate of return and hefty savings for participation in purchasing programs and other alliance offerings.
Now, as providers brace themselves for capitation, managed competition and community-care networks, hospitals are looking to the alliances for assistance and leadership. At the same time, they still demand the best service and prices from purchasing programs and other traditional services.
To survive the rigors of reform will force alliances to provide and demonstrate value. Whether it's helping members integrate physicians into delivery networks or developing indicators of community health status, the alliances must be accountable.
As hospitals begin making tough calls on alliance participation, they'll be looking for proof and promises. Some hospitals that form integrated delivery systems may be tempted to break away from any national alliance membership. Such decisions shouldn't be made lightly.
Whether it's involvement in purchasing, benchmarking or regional positioning, there's a place for alliances in any kind of reformed healthcare delivery system. But to ensure their place, alliances must stay in close contact with their shareholders and conduct serious self-assessments about future strategies.