Hitting the Landing Zone

John Commins, October 1, 2016

The widespread shortage of pediatric specialists in virtually all parts of the United States also furthers the drive to affiliate with children's hospitals. "Because of that we are seeing, in certain cases, partnerships are being formed with major children's hospitals to get the access to pediatric expertise so you can manage the population of pediatric patients," Dawes says.

He describes Stanford Children's as "a freestanding children's hospital that is accessing the ACO world with our partnership with our sister hospital Stanford Healthcare, but also partnerships with others around the Bay Area.

"In other areas, you're seeing children's hospitals, such as ours, who are seeking partners because we want to be able to play in the ACO world, and in order to do that we need access to adults as well," he says. "So, both sides are motivated in that regard."

The key to success with any joint venture, Dawes says, is that the deal has to benefit everyone. "The host hospital gets the value of first-class pediatric care. They don't have to pay for it directly because it's part of the JV, but they get first-class pediatric care in their communities so they can attract patients to their hospitals. Keep in mind that women make most of the key healthcare decisions in a family, and the first experience that a young family has with a hospital is typically the birth of their first child. This is a way for these entities to attract young families."

These affiliations also require a common set of values and a strong sense of trust between executive and clinical leaders, and a strong governing and operations structure that sets priorities and metrics. "Lastly, we have to deliver pediatricians and pediatric specialists to these hospitals so we can fulfill our commitment," Dawes says.

Dawes describes the JVs that Stanford enters into with other hospitals as a hybrid that attempts to garner all the advantages of a traditional merger while maintaining the autonomy of each hospital. It is stronger than a mere referral network because Stanford specialists work in these JV hospitals with their employed or affiliate physicians to coordinate care, as opposed to merely accepting referrals.

John Commins

John Commins is a senior editor at HealthLeaders Media.

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