Nordstrom, Facebook, Starbucks and Google are considered to be some of the best companies to work for, in no small part due to their company cultures. From a healthcare standpoint, Cleveland Clinic is thought to have one of the best cultures, or unique practices separating it from others. There is a great emphasis placed on a company's ability to establish and maintain a successful culture. However, this can be challenging when organizations undergo consolidation.
How to merge cultures may be one of the most important discussions needed in the post-Affordable Care Act world. With the recent influx of mergers and acquisitions, most resulting from ACA requirements, healthcare companies are searching for ways to successfully integrate.
According to a study from healthsystemCIO.com, 70 percent of CIOs cite the most common reason consolidations fall apart is the failure to successfully merge cultures. Three-fourths of the CIOs surveyed also cite deciding a on a culture for a newly formed consolidation as one of the biggest challenges faced when ironing out merger details. Those surveyed do not just work in the industry, they have also participated in the M&A process (FierceHealth IT).
Whereas financial statements are concrete and standard across the board, a culture is more personal and there is no standard set for best practice. While the culture affects those in the C-suite, it's the front-line employees who are affected most. If employees do not buy into the culture, it will affect how they interact with patients and how patients view their experiences, which can ultimately affect the bottom line and employee turnover. At a time when industry insiders have expressed concern about staffing shortages, a culture that employees believe in is especially important.
But personnel is not the only concern when merging cultures. Healthcare entities must also merge EMRs, group purchasing decisions, quality standards and other practices. As the nation races to implement reform initiatives, policies and processes, such as the ones mentioned above, are important to gaining a competitive advantage, saving money and being reform-compliant. Organizations that share common standards and have similar EMRs and group purchasing are more likely to be successful. It is easier to find common ground with similar processes and policies, as opposed to polar opposites.
Entities can look to past successes and past failures to help guide them through merging cultures. In the case of University of Louisville and Catholic Health Initiatives? KentuckyOne Health merger, the two were able to merge conflicting beliefs on reproductive health to compromise and successfully complete their merger. KentuckyOne will manage all services provided by University of Louisville, with the exception of reproductive health.
However, another CHI-owned Seattle health system, Franciscan Health System, failed to complete its merger as a result of clashing cultures. CHI and Vancouver, Wash.-based PeaceHealth announced the suspension of consolidation talks because the two systems could not compromise on shared services and other cultural aspects. The dissolution was announced mere months away from their targeted completion date.
Culture discussions need to take place during the early merger process to help prevent conflict. Perhaps one way is to bring in employees from different departments during the merger process to discuss all aspects of the culture. This brings in a wide selection of employees who will be the faces of the new organization. Banks, hotels and Fortune 500 corporations have done this. Why not extend this to healthcare?
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