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Geisinger, AtlantiCare Enter 'Integration' Talks

 |  By John Commins  
   November 15, 2013

A merger would unite two of the strongest health systems in the mid-Atlantic region. Physician-led Geisinger is known for its work advancing population health and value-based care. New Jersey-based AtlantiCare has a national reputation for performance excellence. Both have high bond ratings.

 

David P. Tilton, president/CEO of AtlantiCare

Geisinger Health System and AtlantiCare announced this week that they are exploring an affiliation.

"What we are contemplating is a fully integrated model," says David P. Tilton, president/CEO of Atlantic City, NJ-based AtlantiCare. "That is the way that we will most effectively share best practices, learn from each other, and develop AtlantiCare in Southeastern New Jersey. Ultimately we are trying to build a healthy community in southern New Jersey. That is what we've always been about and this opportunity with Geisinger helps us move more quickly and effectively in that direction."

The health systems signed a letter of intent this week after AtlantiCare spent a year winnowing the field. They will spend the next nine months to a year exploring their affiliation options.

If the talks are successful, a merger would unite two of the strongest health systems in the region. Danville, PA-based Geisinger has built a national reputation for its work advancing population health and value-based care, and its innovative use of healthcare information technology. Geisinger is the nation's largest rural health services organization, serving more than 2.6 million people in 44 counties in central and northeastern Pennsylvania. The physician-led system has more than 20,800 employees, including a 1,000-member multi-specialty group practice, seven hospitals, two research centers and a 448,000-member health plan.

AtlantiCare is the 2009 winner of the prestigious Malcolm Baldrige Award, and its flagship AtlantiCare Regional Medical center was designated as a Magnet hospital in 2004 and re-designated in 2008. The system includes AtlantiCare Solutions, the AtlantiCare Foundation, the AtlantiCare Physician Group and AtlantiCare Regional Health Services, with more than 5,461employees and 600 physicians serve Southeastern New Jersey in nearly 70 locations.

Geisinger CFO Kevin Brennan says "the optimal outcome would be a complete integration of both companies into a system." He rejected any suggestions that there was a "weak sister" in the proposal.

A Unified Objective
"We are both in pursuit of the same objective, which is to improve the health of our communities," he says. "Of course we are a lot larger and we own a health plan and we have a lot of national accolades for the type of advances we have been able to accomplish in population health management. But both of us are financially strong. They're A-rated and we are AA-rated, which is why we would be interested in going outside of our more traditional service area. So there is no weak sister."

Tilton says AtlantiCare "has never been stronger" as it enters the merger talks.

"Our clinical outcomes are exceptional. We are a recent Baldrige winner. We share the highest bond rating in the state of New Jersey. We have great employee satisfaction. We are hitting on all cylinders now making great progress transforming our business model and we are please with where we are and what is occurring," he says.

Why Mess With Success?
"There is a fundamental shift that is occurring in our business and it is changing the way that healthcare is provided, consumed, and paid for," Tilton says. "We see great opportunity in that set of circumstances and believe we need to innovate care models more effectively and achieve better outcomes in quality and patient experience and of course value for the healthcare consumer. This is the time when wise organizations should move forward and accelerate their transformation because the market is shifting and it is time to do it now."

"Geisinger is a national thought leader," Tilton says. "We have a national reputation, but theirs is exceptional. They've done wonderful work in adopting these new value-based models. They have been able to continue to refine their model and achieve outcomes that are very special. So, I think in that respect they've developed further than we have. Like any good relationship I hope we can add to the conversation and the work we are doing together. I see it as a very win-win opportunity for us in terms of what we need to do for the future."

How Geisinger May Benefit
Tilton says AtlantiCare "brings to the table a very high-performing organization with an incredible culture, the way people work and focus on patients first."

"I know a lot of people say that but we are doing it each and every day," he says. "The quality outcomes that we achieve, the way our employees are engaged in the work we are doing and the work environment created here, the way we connect with our community in ways that are very special in terms of engaging them and activating them around their own care, we have a very balanced approach to not only leading the organization but achieving outcomes."

"What we bring to the table is a partner for Geisinger who knows how to organize work effectively, engage our staff and physicians in that work, connect with the community in a meaningful way, and really execute very well on our plans. We are an example of how they hope to scale their model to other markets."

Tilton and Brennan say they're not concerned about a clash of cultures or egos when two successful and progressive leadership teams get down to brass tacks on deciding how to run a health system.

"When you bring two companies together you hope to take what is extremely good and make it great," Brennan says. "That is the hope here, not that there is any one model that has figured it all out. Winning a Baldrige Award sets them apart nationally. And all of the things that we've been able to innovate and demonstrate nationally with our proven care models totally differentiate us from any other type of suitor that may have been considered by AtlantiCare in their year-long process."

Tilton says AtlantiCare's success has been in great part due to its willingness to learn from others.

"One of the key characteristics of our organization is that we know we don't have everything figured out," he says. "That has been part of what has driven us as a learning organization for the past 25 years. We are always open to new ideas and best practices and learning from others. In my interactions with Geisinger they see the world that way too. I don't think you can perform at a high level in this field unless you were open to others' thinking. That is how you earn a Baldrige Award. You learn best practices, you shape it for your own organization and you try to execute on it. That's been part of our culture for some time."

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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