It’s no secret that consolidation is a popular route to take to achieve sustainable healthcare in America. There are countless examples of mergers, acquisitions, and affiliations in every aspect of the industry that are meant to increase power and scale and develop initiatives to transition to a value-based payment model. But there are different schools of thought on whether that’s the best way to navigate the industry in the post Affordable Care Act world, particularly among some hospitals and health systems.
Nationwide, hospital merger and acquisition activity remained strong in the first half of 2016, according to Kaufman, Hall & Associates. The firm’s analysis shows a 6 percent increase in these transactions compared to the first half of 2015. It’s a clear indication that hospital and health system leaders across the country still look to mergers, acquisitions, and other partnerships to stay competitive and viable.
But there are examples of an alternative approach, such as Niagara Falls Memorial Medical Center, which is small urban hospital in Niagara Falls, NY, that remains steadfast about its role as an independent hospital. The medical center is now the only independent hospital in western New York after a series of affiliation announcements in early 2016 involving Kaleida Health, the region’s largest health system
“We believe remaining independent gives us some distinct advantages,” said Joseph A. Ruffolo, president and CEO of the 133-bed, non-profit safety net hospital. “It allows us the agility we need to move quickly when we identify opportunities and the flexibility to form collaborative relationships that might not be possible if we were part of a larger system. We don’t take sides, and we’re willing to collaborate with everybody. In fact, we have active relationships with more than 200 community agencies.”
It’s an approach that is working in Niagara Falls. Earlier this year, these relationships led the hospital to enter into a joint agreement with three competitors, Catholic Health System, Erie County Medical Center, and Kaleida Health, all in Buffalo, NY, to operate the first cardiac catheterization lab in Niagara Falls. In a region where heart disease is the leading cause of death, this unique four-way collaboration will improve accessibility to high-level cardiac care. The collaboration also was a way to open the lab after each health system had been denied approval by the state.
Strong partnerships with community organizations also led to Niagara Falls Memorial opening an integrated healthcare center for adults with intellectual disabilities in June 2016. The Golisano Center for Community Health serves as a one-stop shop providing a variety of medical and dental care, mental health services, child advocacy, and navigators for enrollment in the New York State of Health Marketplace. It also has a primary-care practice with extended hours. It’s a project, hospital officials said, would not have been possible if the medical center were part of a larger system.
While it is becoming more uncommon to take this path, Niagara Falls Memorial is not alone. For instance, Care New England and Southcoast Health were a year into negotiations to merge and create a mega-system of eight hospitals in Rhode Island when talks abruptly ended in October. In a statement, hospital officials said since beginning the merger process, “the parties have come to recognize that their visions for the combined system could no longer be achieved,” and they will remain independent partners.
In another example, Doylestown Hospital in Philadelphia joined other hospitals in the area as part of the Delaware Valley ACO, but has otherwise stayed independent. Mount Sinai Medical Center in Miami Beach and The Christ Hospital in Cincinnati are both independent and have no plans to join another health system. These are all non-academic hospitals that health systems could easily acquire.
There is no doubt that the healthcare landscape is changing and will continue to change, but there are compelling examples for side-stepping the consolidation route and creating an alternative path toward success. These independent hospitals are showing the industry it can be achieved, and they are committed to taking the road less traveled for as long as they can.
Valerie Pillo is an analyst at DRG and a Quality Initiatives expert. Follow her on Twitter at @ValeriePilloDRG.