Healthcare Organizations and Integration: What does Future Hold?
Healthcare, domestic and international, requires flexible strategies to maintain a competitive foothold in the industry. Affiliations, regional collaborations and franchise models are competing with other organizations to better serve consumers.
Capacity and team building relationships are critical to organizations looking to integrate new programs, services and co-branding to build consumer appeal.
Healthcare organizations are changing dramatically. For hospitals integrating programs, expanding services, managing larger budgets and employing added workforce, capacity building can contribute greatly to the efficiency and effectiveness of these organizations. Capacity building strengthens an organization’s skills, leadership, capabilities, processes and resources.
Capacity building is an effective method for organizations when senior leadership, management and technical support commits to the process. Leadership and management styles can stymie integration in organizations that fail to work together.
Capacity building enhances workforce competency (training, performance and career pathways); workforce capacity (skills, workplace environment and support); and workforce
size and distribution (resources, workforce supply, recruitment and retention).
Capacity building provides methodologies and tools for healthcare organizations to grow and evolve. As organizations integrate and change internally, healthcare organizations change externally, as well.
Differences exist between the development of an ad campaign and launching a new brand strategy. Branding represents a key element to an organization’s marketing strategy. Today’s branding strategic planning and marketing platforms provide healthcare organizations constant challenges to their cultures, missions, brand awareness and promises to the public.
As healthcare systems are redefined through affiliations, regional collaborations, partnerships and mergers, branding is essential to better reflect organizations as they evolve highlighting the integrated services they offer.
Reputation must be kept front and center. The key to effective branding is determining which combination of valuable assets that build the organizations’ reputation will be the most differentiating. The next step requires developing a robust-yet-flexible brand that embodies those attributes.
Strong brand reputation will help the healthcare organization by creating a relationship before the patient needs you. The brand will draw top talent to the organization and that talent will be who will also help draw and retain patients. The values defined by the brand will be reflected in the media, which will then reflect positively as part of the brand reputation.
The brand strategy must be incorporated as part of the corporate cultural identity and part of an enduring legacy. Lastly, the co-branding and solid reputation developed is essential in order to gain a position locally, regionally or in the global healthcare marketplace.
An affiliation agreement between healthcare organizations is the first step in the expansion of a hospital’s footprint locally, regionally, nationally and, unquestionably, internationally. An affiliation serves as an alternative to a merger providing a lower level of integration with potential access to costly capital from the larger affiliate partner.
The affiliation permits flexibility allowing two organizations to learn from each other and how to work in a new environment. Affiliations can be successful when both parties have the same goals, similar cultures, missions and values.
As hospitals expand their medical programs creating new services, initiatives and revenue streams, affiliation agreements allow for healthcare organizations to collaborate on specific initiatives or services involving local, regional, national or international partners. The cost of the specific initiative or service shared among the affiliate partners may vary depending on the investment or infrastructure required.
The affiliation allows for co-branding, encourages mutually beneficial exchange of referrals and enables shared investment in expensive resources including staff, equipment, health analytics capabilities, care management, information technology and development funding. The affiliation may facilitate research efforts and clinical trials to a more comprehensive population providing increased services to a broader spectrum of patients.
Although challenges may exist specific to the agreement and competition may develop among affiliate partners due to issues to marketing to the same patient demographic, the benefits far exceed those challenges.
A successful affiliation creates an environment for institutional outreach creating academic exchange and clinical research programs including establishing a pipeline for specialty upstream patient referrals creating a footprint for potential collaborative expansion, domestically or internationally.
Regional Collaborative Agreements
Separate healthcare organizations within a region often find it mutually beneficial to sign collaborative agreements and form an umbrella organization for specific initiatives in order to build a foundation for potential future integration whether it’s a specific specialty institute, medical program or medical center.
The collaborative offers organization members a collective and collaborative voice in discussions regarding the changing healthcare landscape in the region; serves as advocacy for discussions with local, state and federal authorities regarding policies affecting the members; provides potential for shared resources and services reducing cost for all members; and, creates an environment for exploration of shared learning and collaboration.
The shared cost of the collaborative initiative varies on the goals of the partnership: significant capital outlay in infrastructure, staff, shared risk in joint contracting, facilities development and equipment. Until an umbrella organization is legally formed, the partnership is limited with little accountability.
However, the regional collaboration may serve to position the member healthcare organizations’ specialty programs as they become a more cohesive group with a unified voice.
A franchise partnership model is emerging in today’s healthcare environment. The model provides a deeper integration for healthcare organizations utilizing a franchise approach with the payment of an annual fee for a package of services, which may include policies and procedures, standardization of protocols, clinical direction, quality assurance activities, credentialing, recruitment of physicians, licensing rights to the use of the partner’s name and access to resources and expertise.
The model leverages the use of the partner’s brand. The partner expands its brand with minimal investment and obtains a new source of revenue with potential future collaboration with the franchisee paying for its services.
The franchisee maintains control of its facility, obtains needed services and receives the benefit of a recognized brand for positioning in the marketplace. This model has the ability to grow for larger healthcare organization seeking to create new revenue streams and smaller hospitals requiring costly operational services.
With capital markets in a state of flux, healthcare organizations will continue to explore methods to expand programs and services, domestically and globally. Access to capital has constrained program growth and services for many organizations thus creating the need for creativity and flexibility in seeking strategic long-term relationships with other healthcare organizations.
Affiliations, regional collaborations and franchise models are just a few of the methods healthcare organizations are utilizing with capacity building methodologies for integration of their teams and co-branding for building relationships with new consumers.
Healthcare organizations seeking to expand programs and services will have to think creatively and outside-the-box in order to succeed in today’s costly marketplace.
About the Authors
Renée-Marie Stephano, JD, is president of the Medical Tourism Association®, the first member ship-based international nonprofit trade organization and think-tank for the medical tourism and health- care industry. The MTA provides strategic development programs for destinations seeking to create sustainable and attractive pro- grams for foreign direct investment.
The MTA provides advisory services to investors interested in the industry and matches these financiers with medical tourism-related projects. www.MedicalTourismAssociation.com
Rosanna Gomez Moreno is a licensed attorney in Texas and a partner with McMains Moreno Global Consultants, a project development company focused on the Latin American market.
McMains Moreno advises local and state governments, hospitals and clinics in medical tourism program infrastructure and strategic market penetration; provides clients expertise in tourism and logistical services; and develops healthcare- related projects based on client needs.