text: The Ins & Outs of Mega Health Systems - Carevoyance
  Mergers Increase in Health Systems
  With the pressures facing community hospitals, there has been an increase in mergers and acquisitions between hospitals as well as between groups of hospitals joining forces to create ever larger, "mega health systems".
  In the realm of healthcare mergers and acquisitions, there are really two purposes:
  To enhance efficiency, remove redundancies, and focus more on innovation.
  To be profitable. Bigger systems can negotiate better deals and raise prices, without fear of competition.
  A look at some of the largest mergers in the past year shows that "mega" is an appropriate descriptor. While the systems are getting larger, the jury is still out on whether improvements in quality of care or reduction of costs will be realized. For example, the Dignity Health and Catholic Health Initiatives (CHI) merger from 2018 created an organization encompassing 139 hospitals across 28 states. A system this large would be expected to have ample opportunities to streamline workflows, further specialize the healthcare services offered to a larger patient population and presumably be able to negotiate better rates with insurance companies and better discounts with vendors.
  Yet, instead of closing under-performing locations and reducing overhead, the San Francisco Chronicle reports, "There are no current plans to close any facilities," which means that there won't be any job losses. The company also announced it would retain co-CEOs. And to date, the financial synergies have yet to be reported For a sales representative selling into this mega-system, all this translates into a more complex selling environment with a larger number stakeholders to navigate to find those with buying power and influence.
  There is much opportunity for providers to target mega systems. These organizations are still under incredible pressure from their investors and stakeholders to realize improvements in clinical care and financial performance. And while there are more stakeholders to involve and more complex hierarchies to navigate, you've got more chances to make a connection and possibly more than one shot on goal.
  With such a complex health system, it may feel overwhelming or daunting how a single healthcare supplier can reach the right people. However, with the right approach, you can drastically increase your chances for success.
  Navigating the Mega-Organization in Health Systems
  If you are approaching a mega-system for the first time, it's imperative you have an understanding for which hospitals and which physicians fall under its umbrella. Start at the highest level of the organization and drill into affiliated and owned facilities. Knowing key contacts – c-suite leaders, clinical leaders or other administrative executives - at each facility will help you plan how and who to approach within the mega-system.
  Keep digging to understand how physicians relate to each location. If you are targeting surgeons, you'll want to know if they exclusively deliver services at one location or if they split their cases across different facilities (bonus points for figuring out if those facilities are all part of the same mega-system or not!).
  ​You can piece this information together through good old-fashioned web research. Alternatively, partner with a healthcare data vendor who has already canvassed the hundreds of data sources that can be helpful in planning these account-based sales.
  The Evolving Purchasing Model of Health Systems
  With large organizations comes a lot of bargaining power. Purchasing decisions at a mega system are much different than independent hospitals. Sometimes individual locations have the ability to make decisions, but more likely than not purchasing is controlled by the parent organization. This limits the affiliated hospital's choices and options.
  The key for mega systems hospital leadership is financial – whether you are saving the organization money through increased inefficiencies, avoided waste or (hopefully) the opportunity to increase revenues. Given that motivation, hospital leaders will inevitably seek volume-based discounts that create significant cost reductions. To find success, you have to be willing to play the game of getting larger orders at a lower per unit cost while demonstrating your value-add and how you differentiate from alternative products or services.
  Not only do you have to contend with becoming a preferred vendor to the parent organization; payers are also exerting influence. Insurers may be routing patients to specific facilities that have certain devices, technology, or other products, which can put a strain on healthcare suppliers ability to make big deals.
  What Can You Do to Hook a Big Fish?
  While the mega system may be complicated, it's not out of reach. There are specific strategies and tactics you can employ.
  #1 - Change marketing messages to align with each prospective client. The message is different when marketing to bigger hospital systems compared to smaller ones. Consider the competitive dynamics in their local market. You have to think about the motivations of buyers within bigger hospital systems. While clinical leaders may be solely focused on quality of care or clinical outcomes, remember that administrative leaders will be motivated by opportunities for cost savings or increased revenues at their local system and likely throughout the broader mega-system.
  #2 - It's likely that executives at individual hospitals may have diminished or constrained decision-making ability. To target the right facility and buyer, you need first to understand the structure of individual hospitals and their relationship with the bigger hospital system.
  #3 - Ensure you consider integrated payers. As noted earlier, insurers can impact patient routing, meaning your message must be directed at the payer in addition to the mega system. Think about how you can develop a message that speaks to both sets of stakeholders.
  #4 - Keep in mind that mergers and integration are not fixed. There will continue to be change in the industry, including growth and shrinkage. You have to stay on top of the mega system revolving door so that you are prepared to hook the big fish.
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