2 Strengths of Stand-Alone Hospitals

by | Jun 19, 2013

There was an interesting panel discussion at the HFMA ANI conference in Orlando this week. Four stand-alone hospital CEO’s talked about staying independent versus merging. This is generally a hot topic, especially for smaller community hospitals, as the ongoing healthcare changes in this country continue to squeeze hospitals for revenue funds.

Large health systems are perceived to be more financially stable because, well, they’re large. They have the ability to gain operating efficiencies across multiple hospitals and with larger overall revenue dollars, they are less susceptible to hiccups at any given single hospital. Despite that, there are still a large number of stand-alone hospitals who are happy to continue as they have and resistant to being acquired or merging.

The panel was a moderated discussion of four hospital CFO’s who discussed their perspectives on merging, the benefits and downsides. There was some talk about the inherent challenges that stand-alone hospitals face, mostly around what it is like being a small fish in a big pond. Individual hospitals can’t influence the market as much as a health system can, when it comes to subjects like payer contracts (the negotiated amount reimbursements from an insurance company for procedures). They also can struggle with physician recruitment, depending on their geographical proximity to cities and other hospitals.

What I found immensely interesting from this entire discussion was a couple of the CFO’s comments on the advantages of staying put as a stand-alone hospital. They cited that they are able to provide a more personal connection and a have the flexibility to be innovative and adaptive more quickly.
The “personal connection” is the idea of giving a warmer feel to their patients. In other words, as I hear it, the stand-alone hospitals feel that their nurses are able to give better personalized patient care. I find that paradoxical. In my experience, smaller hospitals have smaller budgets and have little margin for error in how they manage their labor allocations. However they also tend to have nurses and staff who feel like they are a part of the hospital team to provide humanitarian services, not just work a job.

This creates a question for me: If the stand-alone hospitals are providing a warmer patient care experience, does that mean that the personal engagement factor of the staff to the hospital trumps the staffing ratios in terms of quality of delivery? My guess is that if the numbers are not managed into the ground and the staff are stressed over workload, then that enables the culture of the stand-alone hospital to shine through.

In terms of being innovative and flexible, the CFO’s were quick to caveat that they did not mean in terms of medical innovation. Instead, it was more around how they interacted with their local community. One example given by Winona Health in Minnesota was a new program they launched to enlist healthcare students on “care teams” and have them go on patient home visits. It gives the students experience, increases the positive touch points with the patients, and has almost no overhead cost. They also felt that they could adapt new technology more quickly.

I think the reality on the technology is a bit of a mixed bag. Yes, stand-alone hospitals are able to implement systems more quickly that hospitals that are part of a large health system and have to wait in the queue, sometimes for years, for a new scheduling implementation to finally come their way. But the other side of that coin is that the stand-alone hospitals have smaller capital budgets to work with so they can’t undertake all the same initiatives that a large health system can.

What was my takeaway from all of this? It is important to understand that even though a hospital is there to help people and provide quality patient care, they are all going to have different resources AND DIFFERENT NEEDS depending on their size and affiliations. That means that we need to make sure we do our best to understand those cultural factors to help hospitals achieve their goals. And for all hospitals, stand-alone or part of a larger system, leveraging your cultural strengths is a factor that cannot be overlooked for any undertaking, technology or otherwise.

Never miss an update!

Sign up for our WFM Newsletter for all the latest trends, insights, and expertise from Axsium.


+1 (416) 849-5400

+1 (416) 849-5400

+61 (0) 3 9674 7312