Most physicians who integrate their practice with a hospital will experience a decrease in salary in exchange for less administrative responsibilities.  Most integration discussions are over compensation amounts and guidelines, though many management consultants warn that the biggest hurdle to overcome in any merger is the integration of the separate entities’ cultures.  How this issue is handled will more often than not determine the success of the merger.  So, how should you manage the integration of the culture between your practice the hospital’s culture?

A study conducted by KPMG in 1999 concluded that deals are 26 percent more likely to be successful if participants focus on identifying and resolving cultural issues. The five key steps identified to assist in the integration of cultures are:

•     Clearly identify who the physician and hospital leaders will be. 
•     Form a small, agile work team to manage the transition. 
•     Communicate with staff every step of the way. 
•     Be sensitive to feelings of uncertainty that staff may experience as a result of  the change. 
•     Implement a clear ongoing process to promote cultural alignment. 

A typical example of the types of culture clashes that will arise is decision making style.  Most private physician (group) practices make decisions regarding personnel, equipment, and especially treatment quickly and individually as the need arises.  Most hospital cultures have a specific protocol in place that cover the steps to follow when requesting additional personnel, equipment, and even testing or treatment of patients, which may take weeks or months to work their way through proper channels before a decision is reached.  These two vastly differing styles of decision making can lead to frustration for both sides of the merger.  Different management styles can cause a lot of problems within any organization.

After reading several sources, advising on how to integrate different cultures into a cohesive unit, the consensus seems to be the need for a pro-active stance in the discussion phase before any merger even takes place.  No matter how similar the individual cultures may seem to be on the surface, there will always be some areas which will ultimately lead to problems.  Taking the time to discover potential problem areas and solutions to these differences will often determine whether the merger is successful or not. 

The Patient Protection and Affordable Care Act (PPACA) aims to achieve huge savings in the delivery of healthcare through consolidation and decreasing providers compensation, so healthcare providers need to face the reality of lower incomes.  While physicians and employees involved with the merger will necessarily be mainly concerned with compensation packages, any early discussions need to be focused primarily on the ultimate culture that will prevail after the merger.  This is where the ACO needs to clearly define the leadership, culture, and processes of the ACO before the conclusion of the merger(s). Employees need to be kept appraised of any changes that will affect them, especially any uncertainty about their continued existence in the merged entity.  You need to have the support of every member of the organization, or the probability that internal turmoil will compromise patient care and defeat the purpose of the merger in the first place.

All the forces in the healthcare industry are coming together to force physicians and hospitals into fewer and fewer groups of larger and larger size, with the ultimate goal of having a single healthcare provider compensated by a single payer (socialized medicine).  You may as well get ahead of the merger curve, and create your own, or join an ACO and negotiate terms which are most favorable to you and your patients.  This seems to be one of those Megatrends that will be hard, if not impossible, to fight.