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Small Doesn't Mean Doomed

Philip Betbeze, for HealthLeaders Media, December 6, 2013

Innovation, partnerships, and execution—not scale—will determine success, says the CEO of Genesis Health System (IA). To the many overtures for consolidation, he is confident that the right answer remains "no."

Doug Cropper sees his health system as crucial to the delivery of care in his market. That sentiment is no doubt true now, but will it continue to be in the future? In a heavily consolidating industry, independent systems may seem an anachronism, leading many observers to disagree with Cropper's view. Such organizations don't have the scale or the war chests to weather a healthcare nuclear winter as the business model transforms from one based on volume to one based on value. Or so goes the argument.

The name of Genesis Health System, which Cropper leads as president and CEO, implies a new beginning, but the fact remains that it's a relatively small system in a land of giants. The system has 660 licensed beds and reported net patient service revenue of $513 million in the year ending June 30, 2013. Yet the Davenport, Iowa–based system's top leader says all it needs to do to navigate healthcare reform is stay its current course.

His view may run counter to those who would have independents rush into the arms of larger competitors, but Cropper, his board, and his leadership team believe they've plotted a course under which Genesis will thrive independently. The health system consistently, and frequently, updates its strategic plan, with a little help from much larger partners who have no interest in owning Genesis's assets.

"That's one of the advantages of small systems. We can move very fast," he says.

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