Perspectives of a Merger October 5, 2015 Meryl B. Gold, MBA, MPH David M. Kaplan, MPA, EMT-B...

Perspectives of a Perspectives of a MergerMerger

October 5, 2015October 5, 2015

Meryl B. Gold, MBA, MPHMeryl B. Gold, MBA, MPH

David M. Kaplan, MPA, EMT-BDavid M. Kaplan, MPA, EMT-B

Danielle Werner, MHA, FACHEDanielle Werner, MHA, FACHE

Financial DisclosureFinancial Disclosure

►We have no financial interests or We have no financial interests or relationships to disclose.relationships to disclose.

► ““There is nothing wrong in change if it is There is nothing wrong in change if it is in the right direction. To improve is to in the right direction. To improve is to change, so to be perfect is to have change, so to be perfect is to have changed often.changed often.”” -Winston Churchill-Winston Churchill

► ““Progress is impossible without change, Progress is impossible without change, and those who cannot change their and those who cannot change their minds cannot change anything.minds cannot change anything.”” -George -George

Bernard ShawBernard Shaw

NYU & ContinuumNYU & Continuum► June 2012 the boards of NYU and Continuum Health June 2012 the boards of NYU and Continuum Health

Partners (CHP) vote to pursue merger negotiationsPartners (CHP) vote to pursue merger negotiations

► Mount Sinai CEO and Trustees agreed that it would Mount Sinai CEO and Trustees agreed that it would not be in their best interest to let NYU deal happennot be in their best interest to let NYU deal happen

► Mount Sinai steps in 2-weeks later with a competing Mount Sinai steps in 2-weeks later with a competing offer to CHP, which was accepted.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: IntroductionPerspectives of a Merger: Introduction

Back in early 2013 the decision was made by Back in early 2013 the decision was made by the Trustee Boards for Mount Sinai and the Trustee Boards for Mount Sinai and

Continuum to merge.Continuum to merge.


The merger became the biggest news in New The merger became the biggest news in New York City:York City:

Mt. Sinai, Continuum announce merger plans

Mt. Sinai, Continuum Merger On The Horizon

Boards of Trustees of The Mount Sinai Medical Center and Continuum Health Partners Vote to Approve Memorandum of Understanding for Possible Merger

Hospital giants Mt. Sinai, Continuum plan to merge

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Key Health System StatisticsKey Health System Statistics

• Over 6,200 faculty members (full time and Over 6,200 faculty members (full time and voluntary)voluntary)

• Train over 2,000 residents/fellowsTrain over 2,000 residents/fellows• 36,000 employees36,000 employees

• 2.6M outpatient visits annually2.6M outpatient visits annually• 489K ED Visits per year489K ED Visits per year

• 3,351 Inpatient Beds3,351 Inpatient Beds• 135 Operating Rooms135 Operating Rooms

Perspectives of a Merger: Perspectives of a Merger: IntroductionIntroduction

Key Health System StatisticsKey Health System Statistics

Perspectives of a Merger: Perspectives of a Merger: PerspectivesPerspectives


Mount Sinai’s PerspectiveMount Sinai’s Perspective

How did you learn about the merger?How did you learn about the merger?

- My Chair texted me at 10pm in August 2013 to tell me that the - My Chair texted me at 10pm in August 2013 to tell me that the CEO made the determination to pursue this merger. The final CEO made the determination to pursue this merger. The final merger was communicated via a Broadcast email.merger was communicated via a Broadcast email.

What was your initial reaction?What was your initial reaction?

-I was part of the initial merger with Cornell and Columbia back 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 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 Sinai in 2000. This felt similar, very exciting, and a sense of uncertainty.uncertainty.



What were the initial steps?What were the initial steps?

- At first it was the blind leading the blind. Then we started to - At first it was the blind leading the blind. Then we started to get traction:get traction:

•Introductory Meetings & ToursIntroductory Meetings & Tours•Financial ReviewFinancial Review

•Data MiningData Mining•Physician Contract ReviewsPhysician Contract Reviews

•Market Share AnalysesMarket Share Analyses•Staffing AnalysesStaffing Analyses



What was the impact of the merger (honestly)?What was the impact of the merger (honestly)?

•Created a pressure-ridden culture Created a pressure-ridden culture •A sense of unrealistic expectations to produce immediatelyA sense of unrealistic expectations to produce immediately

•Loss of perspective by Senior LeadershipLoss of perspective by Senior Leadership•Too many cooks in the kitchenToo many cooks in the kitchen


Mount Sinai St. Luke’s Roosevelt’s Mount Sinai St. Luke’s Roosevelt’s PerspectivePerspectiveHow did you learn about the merger?How did you learn about the merger?

Via a global email addressed to the CHP community, as well as Via a global email addressed to the CHP community, as well as copies of the Mount Sinai email from friends. Articles from copies of the Mount Sinai email from friends. Articles from CrainCrain’’s, etc. quickly followed.s, etc. quickly followed.

What was your initial reaction?What was your initial reaction?Now what? Is this definite? Now what? Is this definite? What will it mean for the department, the physicians What will it mean for the department, the physicians and the staff (including me)? and the staff (including me)? There was much conjecture with little factual basis.There was much conjecture with little factual basis.


Mount Sinai St. Luke’s Roosevelt’s Mount Sinai St. Luke’s Roosevelt’s PerspectivePerspectiveWhat were the initial steps?What were the initial steps?

Reassure staff to the extent possible regarding their job Reassure staff to the extent possible regarding their job security.security.Work with the Chairman to reassure promote stability among Work with the Chairman to reassure promote stability among the physicians via department meetings, individual meetings.the physicians via department meetings, individual meetings.Pull together information on programs, staff, practice Pull together information on programs, staff, practice locations, volumes, financial indicators, etc. (as I had only locations, volumes, financial indicators, etc. (as I had only recently started with the department).recently started with the department).


Mount Sinai St. Luke’s Roosevelt’s Mount Sinai St. Luke’s Roosevelt’s PerspectivePerspectiveWhat was the impact of the merger (honestly)?What was the impact of the merger (honestly)?

Continuum Senior Leadership was terminated almost Continuum Senior Leadership was terminated almost immediatelyimmediatelyThere was great uncertainty and anxiety among the There was great uncertainty and anxiety among the physicians, many of whom started discussions with other physicians, many of whom started discussions with other hospitals. hospitals. Staff morale declined as job security disappeared with many of Staff morale declined as job security disappeared with many of the old CHP management staff disappearing from one day to the the old CHP management staff disappearing from one day to the next, rumors of downsizing spread, and departments were next, rumors of downsizing spread, and departments were consolidated.consolidated.Every day became a challenge as new urgent dataEvery day became a challenge as new urgent data requests were received. This was especially difficult as requests were received. This was especially difficult as CHP had been a data-challenged organization. CHP had been a data-challenged organization.


Mount Sinai Beth Israel’s PerspectiveMount Sinai Beth Israel’s Perspective

How did you learn about the merger?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”

►What was your initial reaction?What was your initial reaction?

►- Wow, they have their hands full!- Wow, they have their hands full!





What were the initial steps?What were the initial steps?

-Previous Administrator resigned 2 months after mergerPrevious Administrator resigned 2 months after merger-First interview was March 2014, hired after lengthy process in First interview was March 2014, hired after lengthy process in October 2014October 2014-First steps were to understand current state of the Department First steps were to understand current state of the Department and Health Systemand Health System



What was the impact of the merger (honestly)?What was the impact of the merger (honestly)?

•New Chairman, with little Chair experienceNew Chairman, with little Chair experience•Lack of knowledge, void of leadershipLack of knowledge, void of leadership

•Loss of faculty & staffLoss of faculty & staff•Trouble with financesTrouble with finances

Perspectives of a Merger: Perspectives of a Merger: OpportunitiesOpportunities

What does the merger offer us?What does the merger offer us?


Power in NumbersPower in Numbers

•Largest Department of Surgery in the Country- over Largest Department of Surgery in the Country- over 187 full time faculty, 283 part time faculty187 full time faculty, 283 part time faculty

•Most Surgical Cases in the Country- over 117,000Most Surgical Cases in the Country- over 117,000•Most Surgical Trainees- 117Most Surgical Trainees- 117

•135 Operating Rooms, across all campuses135 Operating Rooms, across all campuses•20 Ambulatory Surgery Suites20 Ambulatory Surgery Suites

Perspectives of a Merger: Perspectives of a Merger: OpportunitiesOpportunitiesFinancial StrengthFinancial Strength

Hospital and School/Faculty Practice Budgets in former Hospital and School/Faculty Practice Budgets in former Continuum being splitContinuum being splitChanges in budgeting and accounting software and Changes in budgeting and accounting software and methodology allows generation of more accurate physician methodology allows generation of more accurate physician P&Ls on an ongoing (vs. ad hoc) basis.P&Ls on an ongoing (vs. ad hoc) basis.Continued integration of financial systems will permit Continued integration of financial systems will permit production of consolidated financial statements for the production of consolidated financial statements for the service line. service line. Unified approach across all sites for budgetUnified approach across all sites for budget


Increased Access/ServiceIncreased Access/Service

The combined offsite practices increased across the health The combined offsite practices increased across the health system improving patient access and physician growth system improving patient access and physician growth opportunities. opportunities. With increased specialist expertise and centers of excellence, With increased specialist expertise and centers of excellence, the ability to market and draw patients also increased. the ability to market and draw patients also increased. However, some centralization/decentralization decisions also However, some centralization/decentralization decisions also have to be made.have to be made.Ability to place faculty across different hospital sites to Ability to place faculty across different hospital sites to maximize utilization.maximize utilization.


Faculty RecruitmentFaculty Recruitment

•The benefit of market-share: private practitionersThe benefit of market-share: private practitioners•The benefit of medical school affiliation: attracting The benefit of medical school affiliation: attracting

academicians and researchersacademicians and researchers•Reputation aids in attracting top shelf recruitsReputation aids in attracting top shelf recruits

•Financial support available to help subsidize recruitsFinancial support available to help subsidize recruits


ExpertiseExpertise

•2 Seasoned Chairmen2 Seasoned Chairmen•3 Veteran Administrators3 Veteran Administrators

•Familiar Divisional Leadership Familiar Divisional Leadership •Surgeons willing to work togetherSurgeons willing to work together

Perspectives of a Merger: Areas to Perspectives of a Merger: Areas to ImproveImprove

What does the merger not offer us?What does the merger not offer us?


Loss of ControlLoss of ControlDepartment Chairmen at the Department Chairmen at the ““membermember”” hospitals no hospitals no longer have the same authority and autonomy as longer have the same authority and autonomy as previously to make decisions such as hiring, previously to make decisions such as hiring, compensation, practice activities, and now need compensation, practice activities, and now need System Chairman approval.System Chairman approval.Department Department ““sitesite”” Administrators no longer have the Administrators no longer have the same decision-making authority or span of control as same decision-making authority or span of control as previously, and now need to seek approval from both previously, and now need to seek approval from both Hospital leadership and the System Administrator.Hospital leadership and the System Administrator.


CommunicationCommunication

There should be transparency in communications.There should be transparency in communications.Data should flow in both directions.Data should flow in both directions.Context should be provided for data requests.Context should be provided for data requests.At a minimum, goals and objectives should be communicated At a minimum, goals and objectives should be communicated clearly. Optimally, these would be collaboratively developed.clearly. Optimally, these would be collaboratively developed.Communications should be respectful of the staff at the Communications should be respectful of the staff at the ““membermember”” hospitals. hospitals.Changes in processes and contacts need to be communicated Changes in processes and contacts need to be communicated and intranet kept up-to-date.and intranet kept up-to-date.

Perspectives of a Merger: Areas to Perspectives of a Merger: Areas to ImproveImproveMoraleMorale Meryl & Danielle

Fear of the Unknown

Changes in known leadership

Fear of Job Loss

No involvement in decisions that impact me

Competition resulting in conflict

Rumors and Gossip

My job changed and I didn’t receive adequate training or a pay increase

Is the hospital closing?

Keep your head down survival mode


Duplication of EffortDuplication of Effort

•Hospital leadershipHospital leadership•Department leadershipDepartment leadership

•System leadershipSystem leadership

……vying for your time and resources…competing priorities and conflicting

messages

Danielle


Coordination of SystemsCoordination of Systems•Clinical SystemsClinical Systems

• EMR (EPIC, eCW, Paper charts)EMR (EPIC, eCW, Paper charts)• Inpatient Systems (EPIC vs. PRISM)Inpatient Systems (EPIC vs. PRISM)• Lab & Imaging SystemsLab & Imaging Systems

•Financial SystemsFinancial Systems• Ledger Systems (GEAC vs. EPSI)Ledger Systems (GEAC vs. EPSI)• Purchasing Systems (Sinai Central vs. Oracle)Purchasing Systems (Sinai Central vs. Oracle)• AP AP

•Billing SystemsBilling Systems• IDX version issuesIDX version issues• EPIC ConversionEPIC Conversion


Process BreakdownsProcess Breakdowns

•Data Collection Requests/DeadlinesData Collection Requests/Deadlines•Faculty Recruitment ProcessFaculty Recruitment Process

•Financial/Purchasing RequestsFinancial/Purchasing Requests•Staff RecruitmentStaff Recruitment

•Medical Staff AppointmentsMedical Staff Appointments•Medical PrivilegesMedical Privileges

Perspectives of a Merger: Lessons Perspectives of a Merger: Lessons LearnedLearned

•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: QuestionsPerspectives of a Merger: Questions

Perspectives of a Merger October 5, 2015 Meryl B. Gold, MBA, MPH David M. Kaplan, MPA, EMT-B...

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