We are currently faced with a very important strategic decision for our organization, merge with a larger hospital system or continue to stay independent. Merger mania has definitely hit South Central Pennsylvania and we are now the only independent hospital left in our region, and one of only 30 in the whole state. Since our last session in March, one merger failed and another went through, so 6 more hospitals were bought, leaving OSS Health as the lone independent hospital.<\/p>\n
As a recap, we are a small, 8 OR, 26 bed facility in South Central Pennsylvania that specializes in orthopedic surgery and musculoskeletal care. We offer a full compliment of services for musculoskeletal injuries and diseases, including MRI, CT scan, digital X-ray, ultrasound, DXA scanning, labs, Orthopedic Urgent Care, interventional pain management, inpatient and outpatient surgical facilities, infusion services, home health, physical therapy, orthopedic surgery, podiatry, rheumatology, sports medicine, team coverage, and internal medicine. We have been open for 7 years and our volumes have increased almost every year. The years that we did not experience growth were due to multiple physician illnesses and retirement.\u00a0 We have posted a profit at our hospital every year and our physicians and surgeons are very happy with our practice. Our focus has been to provide high value to our patients – excellent quality with lower costs than other surrounding facilities. We provide an excellent patient experience and have been ranked in the top 1% in patient satisfaction on HCAHPS scores for the past 6 years.<\/p>\n
However, as I mentioned, we are now the only independent hospital in what is a very competitive region. We are surrounding by large, billion dollar healthcare systems that offer a wide array of services. Within 50 miles of our location we have Wellspan Health, a multiple hospital, locally based, billion dollar systems with 5 different hospitals. Penn St.- Hershey Medical Center is a large, billion dollar academic medical center affiliated with the largest university in the state, Lancaster General- Penn Medicine, is a 5 billion dollar academic and community based healthcare system based in Philadelphia, Holy Spirit has merger with Geisinger, which is a large 4 billion dollar healthcare system based in Danville, PA, Pinnacle has just bought 5 hospitals from CHS, a struggling for profit system, and then announced an affiliation with UPMC, a 27 hospital, multi-billion dollar health system that dominates the Western half of the state, and to the south there is Johns Hopkins Medical Center, Medstar, the University of Maryland and LifeBridge, all billion dollar systems with multiple hospitals.<\/p>\n
There have been two main strategies employed by all of these large non-profit, hospital systems – 1. Buy up primary care offices and physicians and then force referrals to within the hospital system or 2. Develop and insurance product to work with your health system, and steer referrals via the insurance product, to your partnered facilities. To this point, we have been able to navigate the landscape effectively by offering high quality at a lower cost. However, our weaknesses are that we are limited to musculoskeletal services, and we are much smaller than our competitors, so we do not have the market clout that they do. We are vulnerable to being excluded from narrow networks and from being excluded from provider panels for referrals. Most of these health systems employ their own orthopedic physicians and obviously try to steer referrals in their direction.<\/p>\n
My questions are:<\/p>\n
Ddo we try to stay independent or join one of the larger systems?<\/p>\n
Instead of an outright merger, do we offer to run the orthopedic service line at some of the local hospitals? We can do this efficiently and make them money in the process.<\/p>\n
Do we try to continue to stay independent and hope that we are able to see enough patients to remain viable? This would probably hinge on whether or not price and quality transparency become more prevalent.<\/p>\n
What things should we be doing to evaluate our options?<\/p>\n
What do I recommend to my Board?<\/p>\n","protected":false},"excerpt":{"rendered":"
We are currently faced with a very important strategic decision for our organization, merge with a larger hospital system or continue to stay independent. Merger mania has definitely hit South Central Pennsylvania and we are now the only independent hospital […]<\/p>\n","protected":false},"author":9311,"featured_media":0,"comment_status":"open","ping_status":"closed","template":"","categories":[35,26,25],"class_list":["post-278","hck-submission","type-hck-submission","status-publish","hentry","category-change-management","category-growth","category-strategy"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-mhcdsolutions\/conversation\/mhcd-solutions-ii\/","yoast_head":"\n