Perspectives of a Merger
October 5, 2015
Meryl B. Gold, MBA, MPH
David M. Kaplan, MPA, EMT-B
Danielle Werner, MHA, FACHE
Financial Disclosure
► We
have no financial interests or
relationships to disclose.
►
“There is nothing wrong in change if it is in
the right direction. To improve is to
change, so to be perfect is to have
changed often.”
-Winston Churchill
►
“Progress is impossible without change,
and those who cannot change their minds
cannot change anything.” -George Bernard Shaw
NYU & Continuum
►
June 2012 the boards of NYU and Continuum Health
Partners (CHP) vote to pursue merger negotiations
►
Mount Sinai CEO and Trustees agreed that it would not be
in their best interest to let NYU deal happen
►
Mount Sinai steps in 2-weeks later with a competing offer
to CHP, which was accepted.
New York Times article June 21, 2012, “Hospital Systems’ Merger
Talks Collapse as New Suitor, Mount Sinai, Steps In”
Perspectives of a Merger: Introduction
Back in early 2013 the decision was made by the
Trustee Boards for Mount Sinai and Continuum to
merge.
Perspectives of a Merger: Introduction
The merger became the biggest news in New York
City:
Mt. Sinai, Continuum announce
merger plans
Boards of Trustees of The Mount Sinai
Medical Center and Continuum Health
Partners Vote to Approve Memorandum
of Understanding for Possible Merger
Mt. Sinai, Continuum Merger On The
Horizon
Hospital giants Mt. Sinai, Continuum
plan to merge
Perspectives of a Merger: Introduction
7
Perspectives of a Merger: Introduction
Key Health System Statistics
•
Over 6,200 faculty members (full time and voluntary)
•
Train over 2,000 residents/fellows
•
36,000 employees
•
2.6M outpatient visits annually
•
489K ED Visits per year
•
3,351 Inpatient Beds
•
135 Operating Rooms
Perspectives of a Merger: Introduction
Key Health System Statistics
Perspectives of a Merger: Perspectives
Perspectives of a Merger: Perspectives
Mount Sinai’s Perspective
How did you learn about the merger?
- My Chair texted me at 10pm in August 2013 to tell me that the CEO
made the determination to pursue this merger. The final merger was
communicated via a Broadcast email.
What was your initial reaction?
-
I was part of the initial merger with Cornell and Columbia back in
1995. I was also part of the merger between NYU and Mount Sinai in
2000. This felt similar, very exciting, and a sense of uncertainty.
Perspectives of a Merger: Perspectives
Mount Sinai’s Perspective
What were the initial steps?
- At first it was the blind leading the blind. Then we started to get
traction:
•
Introductory Meetings & Tours
•
Financial Review
•
Data Mining
•
Physician Contract Reviews
•
Market Share Analyses
•
Staffing Analyses
Perspectives of a Merger: Perspectives
Mount Sinai’s Perspective
What was the impact of the merger (honestly)?
Created a pressure-ridden culture
A sense of unrealistic expectations to produce immediately
• Loss of perspective by Senior Leadership
• Too many cooks in the kitchen
•
•
Perspectives of a Merger: Perspectives
Mount Sinai St. Luke’s Roosevelt’s Perspective
How did you learn about the merger?
Via
a global email addressed to the CHP community, as well as copies
of the Mount Sinai email from friends. Articles from Crain’s, etc. quickly
followed.
Now
What was your initial reaction?
what? Is this definite?
What will it mean for the department, the physicians
and the staff (including me)?
There was much conjecture with little factual basis.
Perspectives of a Merger: Perspectives
Mount Sinai St. Luke’s Roosevelt’s Perspective
What were the initial steps?



Reassure staff to the extent possible regarding their job security.
Work with the Chairman to reassure promote stability among the
physicians via department meetings, individual meetings.
Pull together information on programs, staff, practice locations,
volumes, financial indicators, etc. (as I had only recently started with
the department).
Perspectives of a Merger: Perspectives
Mount Sinai St. Luke’s Roosevelt’s Perspective
What was the impact of the merger (honestly)?




Continuum Senior Leadership was terminated almost immediately
There was great uncertainty and anxiety among the physicians, many
of whom started discussions with other hospitals.
Staff morale declined as job security disappeared with many of the old
CHP management staff disappearing from one day to the next, rumors
of downsizing spread, and departments were consolidated.
Every day became a challenge as new urgent data
requests were received. This was especially difficult as
CHP had been a data-challenged organization.
Perspectives of a Merger: Perspectives
Mount Sinai Beth Israel’s Perspective
How did you learn about the merger?
New York Times article July 16, 2013, “2 Hospital Networks
Agree to Merge, Raising Specter of Costlier Care”
Crains New York Business article on October 1, 2013,
“Layoffs loom as new Mount Sinai system emerges”
Perspectives of a Merger: Perspectives
Mount Sinai Beth Israel’s Perspective
► What
►-
was your initial reaction?
Wow, they have their hands full!
Perspectives of a Merger: Perspectives
Mount Sinai Beth Israel’s Perspective
What were the initial steps?
-
Previous Administrator resigned 2 months after merger
First interview was March 2014, hired after lengthy process in October
2014
First steps were to understand current state of the Department and
Health System
Perspectives of a Merger: Perspectives
Mount Sinai Beth Israel’s Perspective
What was the impact of the merger (honestly)?
•
New Chairman, with little Chair experience
•
Lack of knowledge, void of leadership
•
Loss of faculty & staff
•
Trouble with finances
Perspectives of a Merger: Opportunities
What does the merger offer us?
Perspectives of a Merger: Opportunities
Power in Numbers
•
Largest Department of Surgery in the Country- over 187
full time faculty, 283 part time faculty
•
Most Surgical Cases in the Country- over 117,000
•
Most Surgical Trainees- 117
•
135 Operating Rooms, across all campuses
•
20 Ambulatory Surgery Suites
Perspectives of a Merger: Opportunities
Economies of Scale
•
Roll out of Corporate Table of Organization
•
Centralized Services
•
Purchasing
•
Finance
•
IT
•
HR
•
Creation of a unified budget
Perspectives of a Merger: Opportunities
Financial Strength




Hospital and School/Faculty Practice Budgets in former Continuum
being split
Changes in budgeting and accounting software and methodology
allows generation of more accurate physician P&Ls on an ongoing
(vs. ad hoc) basis.
Continued integration of financial systems will permit production of
consolidated financial statements for the service line.
Unified approach across all sites for budget
Perspectives of a Merger: Opportunities
Increased Access/Service



The combined offsite practices increased across the health system
improving patient access and physician growth opportunities.
With increased specialist expertise and centers of excellence, the
ability to market and draw patients also increased. However, some
centralization/decentralization decisions also have to be made.
Ability to place faculty across different hospital sites to maximize
utilization.
Perspectives of a Merger: Opportunities
Faculty Recruitment
•
•
•
The benefit of market-share: private practitioners
The benefit of medical school affiliation: attracting
academicians and researchers
•
Reputation aids in attracting top shelf recruits
Financial support available to help subsidize recruits
Perspectives of a Merger: Opportunities
Expertise
2 Seasoned Chairmen
•
3 Veteran Administrators
•
Familiar Divisional Leadership
•
Surgeons willing to work together
•
Perspectives of a Merger: Areas to Improve
What does the merger not offer us?
Perspectives of a Merger: Areas to Improve
Loss of Control
Department Chairmen at the “member” hospitals no longer
have the same authority and autonomy as previously to
make decisions such as hiring, compensation, practice
activities, and now need System Chairman approval.
Department “site” Administrators no longer have the same
decision-making authority or span of control as previously,
and now need to seek approval from both Hospital
leadership and the System Administrator.
Perspectives of a Merger: Areas to Improve
Communication
There
should be transparency in communications.
Data should flow in both directions.
Context should be provided for data requests.
At a minimum, goals and objectives should be communicated clearly.
Optimally, these would be collaboratively developed.
Communications should be respectful of the staff at the “member”
hospitals.
Changes in processes and contacts need to be communicated and
intranet kept up-to-date.
Perspectives of a Merger: Areas to Improve
Morale
Is the hospital
closing?
Fear of the
Unknown
Meryl & Danielle
My job changed and I didn’t
receive adequate training or
a pay increase
Fear of Job
Loss
No involvement in decisions
that impact me
Changes in known
leadership
Rumors and Gossip
Competition
resulting in
conflict
Keep your head
down survival mode
Perspectives of a Merger: Areas to Improve
Danielle
Duplication of Effort
•Hospital
leadership
•Department leadership
•System leadership
…vying for your time and resources
…competing priorities and conflicting messages
Perspectives of a Merger: Areas to Improve
Coordination of Systems
•
Clinical Systems
•
•
•
•
Financial Systems
•
•
•
•
EMR (EPIC, eCW, Paper charts)
Inpatient Systems (EPIC vs. PRISM)
Lab & Imaging Systems
Ledger Systems (GEAC vs. EPSI)
Purchasing Systems (Sinai Central vs. Oracle)
AP
Billing Systems
•
•
IDX version issues
EPIC Conversion
Perspectives of a Merger: Areas to Improve
Process Breakdowns
•
Data Collection Requests/Deadlines
• Faculty Recruitment Process
• Financial/Purchasing Requests
• Staff Recruitment
• Medical Staff Appointments
• Medical Privileges
Perspectives of a Merger: Lessons Learned
•Pace
yourself. Rome wasn’t built in a day.
•Know your limits. Use your departmental leadership.
•Focus. Identify and quantify specific affiliation-related
cost-saving opportunities and their barriers
•Understand then Plan. Use your change management
theories to build a team for implementation.
•Create Urgency and celebrate short-term wins.
Perspectives of a Merger: Questions