The effort to integrate hospitals, physicians and payers is fraught with perils. Some networks are doomed to run into problems before the ink dries on their deal.
Other transactions are being aborted in the early stages. Plans by UniHealth America and Blue Shield of California to form a $6 billion managed-care company collapsed when executives called off negotiations late last year.
In other instances, partners may go ahead even though the deals are poorly structured or don't make sense in the first place.
The temptation is strong for providers to rush pell-mell into an affiliation out of a sense of panic. Often, potential partners have different motivations and goals. In the pressure to deal with financial concerns, potential partners fail to ensure that everyone's interests and intentions are clearly spelled out and understood.
When hospital executives attempt to purchase physician practices or develop medical-care networks, they're generally most interested in building patient flow and making sure their organizations are at the center of the delivery system of the future. Physicians primarily want to preserve their revenues and their independence to make medical decisions.
The payer's prime mission is to reduce costs and to improve the measurement of resources required to deliver care and the measurement of clinical outcomes. Bring them all together and the result can be an explosive mix.
The prime beneficiaries of all this activity often are the healthcare consultants. While they're out beating the drums for more deals, strategic planners can be earning fees of $500,000 to $1 million to put mergers together. And the consultants will be standing in line to profit again if and when the time comes to take the deals apart.
Still, savvy administrators know they must allow their organizations to take advantage of economies of scale obtained through consolidation and streamlining. Just as important, creating seamless systems of care allows the development of improved techniques to influence physician practice patterns in providing more cost-effective, high-quality care.
Successful integration starts with a full and fair assessment of the needs of the participants. This effort must include an evaluation of how to best share risks and rewards and how to create structures that will align the interests and incentives of all participating groups.
The key to successful integration is to fully involve physicians in decisionmaking. Together, the integrated organization's administrators and medical staff can address cost and quality issues and develop case-management protocols that will allow the organization to focus on the patients in the communities they serve.