Good dealmakers call just to say hello.
Regular conversations with board members and community leaders lay the groundwork for sales of community hospitals, said Barry Halm, president of Benedictine Health System, a Duluth, Minn.-based system of 17 hospitals.
Without that vision, deals go awry, Halm warned.
The Benedictine system has been meeting with residents of a rural Minnesota county for roughly one year to design a new community health system (March 4, 1996, p. 40).
The effort also involves Allina Health System, Minneapolis, and Duluth Clinic. Their purchase of the county's 73-bed hospital for roughly $20 million in considerations is expected to be completed March 31.
Halm declined to discuss the deal while it's pending. Speaking in general, he said the Benedictine system's policy is "overcommunication" when negotiating any collaborative relationship, not just acquisitions.
"Our philosophy is `Let the community participate,'*" Halm said. "We have the ultimate trump card: We don't have to do the deal."
Successful negotiations require "great diplomacy," he said. "We measure the personality of the community with the facilitator. Sometimes you need someone strong and bold. Sometimes it requires soft and cuddly."
Despite extensive efforts to solicit community input into the sale of 217-bed Lincoln (Neb.) General Hospital, charges of meager community involvement threaten the deal.
After 15 months of talks, a community task force appointed by the Lincoln mayor, and a Gallup Poll of citizen opinion, the Lincoln City Council voted 5-2 last Dec. 18 to sell the city-owned hospital. Under the proposal, 316-bed Bryan Memorial Hospital, also in Lincoln, would pay about $37 million for the facility (Dec. 23-30, 1996, p. 13). A final agreement is being drafted.
Now, a group of 50 citizens is gathering signatures for a May 6 ballot initiative to review the deal. Their proposal would require a public vote on any sale of city assets valued at more than $20 million.
"By the time there were any public meetings, the issue was drawn too narrowly," said Kandra Hahn, a leader of the group and Lancaster County clerk. "The question is not who to sell to. It's `What can Lincoln General be in the future? What are the unmet needs?' We were left out of that by the city. If our hospital is sold the public will have no role in healthcare. It'll be gone."
The situation shows that even when hospital executives are convinced of a deal's fairness, they must give careful consideration to public perception of its terms.
For example, executives of Covenant Health System, Waterloo, Iowa, intended to maintain excellent ophthalmology services at 101-bed Sartori Memorial Hospital when they negotiated its long-term lease. But they knew residents of Cedar Falls, Iowa, which owns the hospital, needed reassurance.
"The board of trustees was very sensitive as to what would or wouldn't sell. We ended up with something like `ensure state-of-the-art technology as long as fiscally reasonable,'*" said Michael Schneiders, senior vice president of business services for the three-hospital system.
He advises other negotiators to: "Put yourself in the shoes of Joe Q. Public. What are going to be his concerns? Address those upfront. If you're not prepared, that could ruin a good deal."
Covenant's talks with Sartori Memorial began in spring 1994. Late last year, it finally signed a 25-year lease valued at roughly $11 million with three five-year renewal options.