Collaborate, Don't Crush

Carrie Vaughan, for HealthLeaders Magazine , March 12, 2009
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That partnership developed while Huntsville Hospital was in the process of getting a certificate of need to build another hospital about halfway between the two facilities. "We started some conversations with them about how to mitigate any negative impact on their institution when we built the new hospital," says Spillers. "It was through those conversations that we determined a more formal relationship would make sense."

To help develop the relationship between organizations, the boards at Athens-Limestone and Huntsville met on numerous occasions, went to retreats together, and attended the same conferences. While Athens-Limestone has maintained its own separate board with the authority to run the facility, Huntsville Hospital has representation on their board and vice versa, says Spillers.

Relationship building
Healthcare organizations should view these partnerships as a relationship, not a transaction, says Gavin, who opened a pediatric unit at Waterbury, CT-based St. Mary's Hospital in collaboration with Waterbury Hospital in January 2009. Organizations aren't just working with the other management team or board of trustees, he says. CEOs will need to have influence beyond the traditional jurisdictions and boundaries of the job—with local and state officials and other providers in the community, for example.

"This can't be developed like a corporate model with branch offices in different towns," says Gavin, who spent the last eight years of his financial career in mergers and acquisitions. Waterbury is a proud old mill town, for example, so it was important to residents—from the local physicians to the chief of police—that the pediatric center be "of" Waterbury, not a satellite office of Connecticut Children's "in" Waterbury, Gavin explains.

Gavin spent considerable time with local physicians in Waterbury identifying their needs and what other services they would like to have in the community. "Think beyond what's in it for you to what's in the best interest of the community," he says.

Testing the waters
A good place for organizations to find common ground is in nonclinical services like the central business office, collections, and purchasing equipment and supplies. Athens-Limestone and Huntsville decided there were opportunities to save money by purchasing goods and services together and consolidating their marketing efforts and employee training. To date they've reduced supply and materials handling costs by more than $200,000 annually and reduced the cost of memberships by more than $100,000, says Spillers.

Huntsville is also part of a network with four other healthcare organizations (including Athens-Limestone) that have partnered together on things like laundry services, home health, and prenatal care. "[It] gets us together to talk about common issues," says Spillers. "It is also an opportunity to start developing those personal relationships that could potentially lead to a more formal relationship."

Carrie Vaughan is leadership editor of HealthLeaders magazine. She can be reached at
Sustaining the Relationship

Here's how to make sure your collaboration is more than a fleeting affair:

Put it in writing. The people who developed these relationships may not be with the organization five years down the road, so it is important that organizations write down the rules that were agreed upon. "The worst thing that could happen to these relationships is if I left today and a new CEO came in and wanted to do things differently," says Spillers. "We can't unlink. The documents have to define how it is going to work going forward."

Don't fear competition between friends. Huntsville Hospital doesn't dictate what services Athens-Limestone can provide—even if that means they directly compete on a few services. That is one of reasons that this relationship is unique, says Spillers. "If they want to provide a service that they feel their community needs, they have the ability to do that."

Think in terms of renewal. The healthcare industry is going through a period of consolidation, according to industry experts. Gavin advises senior leaders to focus their energy on renewing the best features of the community. "It is about bringing back the visions, values, and motivations that will create sustainable change, he says."

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