It wasn't necessarily the strategy that sank struggling hospital systems. For many it was poor execution, the inability to make painful decisions, a reluctance to get tough with physicians and a serious clash of cultures among merged organizations.
Two surveys reported exclusively here last week show that most healthcare systems are only marginally profitable and that the merger craze that gripped hospitals in the 1990s has come to an end. In fact, Deloitte & Touche reports a significant increase in the number of hospital chief executives who stand firm behind hospital independence. Many of these soloists say they would restructure, eliminate clinical services and downsize before pursuing a merger.
Whether the move to go it alone is fueled by more than blind optimism depends on whether hospital managers can muster the leadership skills and physician buy-in necessary to build a focused local healthcare organization.
But as merger mania proved, saying you'll make a tough decision is much different from doing it. Community, political and physician pressures often win.
Meanwhile, the disintegration of hospital systems continues unabated, with physician practices, health plans and skilled-care facilities the first to go. An Arista Associates survey says more than 90% of systems are losing money operating physician practices.
Remember, however, that the success of a hospital is directly related to the medical staff's ability and teamwork. Meshing physician-management objectives is vital for both independent and system hospitals.