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Change is Good . and Scary

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The numbers just weren't working for Cincinnati's Drake Center. Even with the $10.7 million the facility received annually in public property tax support, operational expenses weighed on the freestanding 356-bed hospital, which specializes in acute and long-term nursing and rehabilitation care. After an exhaustive due-diligence effort in 2005, officials at the Health Alliance of Greater Cincinnati, a $1.4 billion nonprofit integrated delivery system, decided on an ambitious goal: within seven months it would make the Drake Center the seventh hospital in its system.As an 11-year veteran of the Health Alliance with a background in hospital operations and external affairs, Senior Vice President Karen Bankston, Ph.D., led the transition team during the interim management period. Bankston expects the Health Alliance to improve Drake's bottom line because of the system's operational efficiencies. In addition, the Health Alliance is working to drive patient volume to Drake from its acute-care facilities. Whatever it takesBut number crunching and strategic analysis don't always lead to a successful merger. To turn an organization you acquire into the organization you desire takes political charm and steady leadership."The assumption in the '80s and '90s was that you could buy facilities that were geographically approximate to each other and shuffle the deck in terms of services," says John Leifer, a healthcare consultant with Cbiz The Leifer Group of Leawood, Kan. "But what appears to make sense based on an objective analysis of financial data falls apart in operationally bringing the pieces together, because the pieces constitute people with very different attitudes, beliefs and desires."Watch and learnWhen Bankston's transition team of Health Alliance managers came to the Drake Center, they were eager to integrate the hospital before their June 30, 2006, deadline. However, Bankston built 45 days into the front of the transition plan solely for assessment."You can go into any organization, walk the halls, and see things you want to change right off the bat," she says. "But having the wherewithal and mentoring to know that you need to get a better understanding of what is going on in the organization is very important."During the assessment phase, in which the management team analyzes key functions to uncover gaps, leaders should make a point of actively listening to the organization's stakeholders, says Leifer. "People have pride in the brands they work for, and that has to be recognized," he says. Communicate early and oftenAmong the words tossed around in management circles, "communication" is pretty high on the list. But don't forget the word's roots. Just like community and communion, it comes from the word commune, which as a verb means, "to make common."To develop a shared meaning about a merger and its goals, a dialog between senior leaders and the organization's community is a necessity, says Bankston, who held town meetings with Drake staff members every two weeks, for all shifts. During the transition, political issues regarding the merger were raised continually at county commission meetings. Bankston also shared information about the merger in internal communication channels, including a newsletter, intranet and telephone hotline. Through these efforts, she sought to gain staff buy-in for a host of goals. She says the center is determined to improve quality performance and patient and employee satisfaction. "We needed to set goals to show staff that the Health Alliance isn't coming here to close Drake; it's coming here to grow Drake," she says. Don't go it aloneCombining organizational operations to realize measurable efficiencies is not a one-man job. A leader needs a talented team to see to the countless details that can make a merger a business success. With no time to spare, Bankston assembled a team from the Health Alliance system to integrate many of Drake's operations, including IT, finance, patient accounts, human resources and the lab."Drake staff had been so ingrained in not having structure that the change process from a cultural perspective has been tough," she says. "We've spent a lot of time dealing with the human resource piece of the transition, while my Health Alliance partners really implemented the integration plan."It happensAs military generals have long known, wars (and perhaps mergers, too) make planning necessary but plans useless. Even the best-executed integration plan will cause disruptions within the organization."The message has to be that everyone in the organization will make some level of sacrifice but that there will be long-term gains to the organization and to all the individuals that far outweigh the sacrifices," explains Leifer. The Drake Center, which formally announced its transfer to the Health Alliance in July 2006, has just begun to realize the benefits of integration. The system reports that since interim management took over December 2005, the Drake Center has increased volume by 50 percent and shaved millions of dollars off of the facility's expenses through consolidation, reductions, and renegotiating contracts for suppliers and services. -Rick Johnson