Venture capitalists are gunning to invest billions of dollars in the inefficient, overpriced healthcare industry, and it’s going to prompt countless shifts in the coming years. If traditional health systems want to survive, they need to learn to buddy up, Rob Allen, Intermountain Healthcare’s chief operating officer, told the audience on a panel discussing partnerships.
“The question is, are we nimble enough to connect to them, to adjust ourselves, to then play in the new world that’s ahead?” he said. “I think collaborations, alliances, partnerships are critical to us being able to succeed. It’s going to happen either with us or without us.”
But it’s not as simple as it sounds, especially for large systems with legal, reputational and financial issues to consider. At Rochester, Minn.-based Mayo Clinic, for example, executives don’t even use the word partnership, as it can be misunderstood. Instead, Mayo dubs them “alliances” and “consortiums,” said Dr. Lois Krahn, Mayo Clinic Arizona’s interim CEO.
Panelists agreed that before signing anything health systems have to do a lot of groundwork to understand what attributes they’re seeking in a potential partner. And all contracts must include a clearly defined exit strategy. But D. Scott Nordlund, chief strategy and growth officer for Phoenix-based Banner Health, cautioned against making it too easy to get out. “When you’re in a relationship and you’re trying to build strategic businesses together, you do not want to have these things so easy that the first time you run into trouble—which you’re going to—that either side can get right out of it,” he said.
Panelists also cautioned that large systems have to deal with any mistrust they may encounter. When Salt Lake City’s Intermountain teamed with Utah’s governor to improve health in two risky ZIP codes in its service area, some of the local not-for-profit groups feared being replaced, Allen said.
Intermountain is used to being the dominant player in partnerships to ensure that it’s in control, but Allen said it’s had to learn to recognize when it should step aside and let its partner lead. In some cases, Intermountain’s best role is to help bring organizations together, he said.
