At first look, hospital affiliations seem ideal, particularly for smaller and independent hospitals. The rapidly forming collaborative regional partnerships allow for small, rural and independent hospitals to expand their resources. Becoming part of a hospital affiliation means access to accountable care, population health, purchasing, information technology, academic, management, and many other healthcare benefits.
Those rural and independent hospitals that find themselves struggling financially have turned to becoming part of an affiliation as a solution. The main reason that these hospitals turn to affiliations as a solution is finances, with many citing that it was a preferable alternative to closing due to financial pressure, as well as the transformation of healthcare in terms of payment models.
One thing to understand regarding hospital affiliations is that, while they provide access to more resources and a better financial picture in the long run, the hospital itself loses its independence. Instead of the flexibility to adapt to local needs, it becomes part of a larger system that looks at the benefit of the affiliation as a whole, as opposed to the individual healthcare facility.
It is not uncommon for those hospitals who are part of a larger affiliation to find that what was once considered a shared vision and a similar culture have now become part of a larger conglomerate that caters to the interests of the whole, rather than the individual institution. Larger affiliations also mean that the local board often defers to the board of the larger hospital, with former board members retaining little of the authority in the decision making.
The biggest concern regarding hospitals at this juncture is the Patient Protection and Affordable Care Act, in which there will be approximately $400 billion in Medicare cuts between now and 2019. The concerns over the new coding regulations and negotiating with insurance companies are currently pushing the trend towards hospital affiliations, however, the rural community identity which reflects the culture of a local hospital’s community may suffer in the long run.
With costs rising as providers must invest in the new technology and staff needed to participate in healthcare reform’s new payment models, some smaller, independent hospitals are looking to new ways to account for the cash shortages in the hopes of keeping their community identity.
While hospital affiliations provide many benefits for those healthcare institutions struggling financially, it requires commitment and longevity, as well as a careful review before entering into a partnership, to provide long-term success.
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