VA vs. Private Sector Mergers of Academic Medical Centers: Who's More Successful at Integration

Guihan ML, Thomas J, LaVela S, Hynes D, Manheim L. VA vs. Private Sector Mergers of Academic Medical Centers: Who's More Successful at Integration. Paper presented at: VA HSR&D National Meeting; 2000 Mar 1; Washington, DC.

Objectives: In June, 1996, VHA approved the integration of Lakeside and West Side VA Hospitals into VA Chicago Health Care System (VACHCS), as part of a larger restructuring plan. Among the 14 initial VA integrations approved/in planning at this time, this integration was unique because it involved two urban, tertiary care hospitals, with separate academic affiliations, and a common patient population. Objectives included identifying and describing key players and organizational structures and comparing VA and private sector academic medical centers (AMCs) in terms of resources, facilitators and obstacles to integrating, with special attention given to the role of graduate medical education. Specific characteristics examined included merged facility characteristics, board representation, joint recruitment, common information systems.Methods: Descriptive analyses using qualitative data collected during in-person, semi-structured interviews were conducted with managers and service chiefs at VACHCS, and two private sector AMCs and their medical school affiliates.Results: VACHCS's integration was involuntary and was met with great resistance. Integration scope was similar at VACHCS but its goals were more all-encompassing. Private sector mergers resulted in relatively independently functioning hospitals, whereas VACHCS sought to achieve more comprehensive clinical integration across its two divisions. Integration in VACHCS's administrative and ancillary services was comparable or superior. VACHCS's integration process and stakeholder involvement was more open and public. VACHCS sought the active involvement of its academic affiliates. Leadership and communication were key factors in overcoming obstacles and in facilitating change at all three mergers. Physician leadership was lacking at VACHCS and it made fewer efforts to engage the physician community. VACHCS had a common compensation system for employees at the merging facilities. However, VA may have missed an opportunity for demonstrating a good faith effort to engage with its employee's integration-related concerns.Conclusions: One difficulty in comparing mergers was rooted in how differently 'integration' was conceptualized within VA vs. the private sector. At the private sector sites, integration was pursued in response to a clearly identified predicament, whereas most VACHCS respondents never understood what problem integration was supposed to be solving. In addition, the private sector sites identified managed care as being among their integration's major drivers. Once integrated on paper (if not in fact), the private sector sites could declare their goals as having been met. Because VACHCS's goal was to lower costs and increase efficiency, this required management to reduce duplication and work towards clinical integration. Differences in how integration was defined and pursued made it extremely difficult to assess which sites were furthest along. Finally, we note that these difficulties in finding comparable sites probably suggests something about the difficulties involved in achieving real clinical integration.Impact: With the ongoing restructuring of VA, as outlined in 'Vision for Change,' this study provides valuable and applicable information about the structures and processes of merging two urban, tertiary care facilities. Since integrating similar VA facilities is anticipated for the future, identifying and understanding the facilitators and obstacles, and describing the lessons learned in this context will benefit the strategic planning of the next complex integration.