Culture Fit

Just a reminder of how important it is to have a good cultural fit when hiring......

H&HN Daily

Culture Critical to any Health Care Partnership

07.14.14 by Marty Stempniak

Health care CEOs and other industry experts say the sometimes nebulous topic of culture is an important part of M&A decision-making.

Partnerships are king in today's health care marketplace, as providers and payers search for allies to add muscle to better pursue population health management. And although it may seem "squishy" and intangible at times, culture should be a primary determinant as to whether your hospital shakes hands with, or walks away from, potential suitors.
In this month's edition of Hospitals & Health Networks, I took a closer look at strategies that hospital leaders are using to make sure that cultures blend seamlessly in a merger or acquisition. But the experts I talked to had so much to say on the topic, I thought I'd highlight more of their insights on the importance of culture.
Jordan Shields, vice president of consulting firm Juniper Advisory, tells me that only about one-third of the transactions that they've advised on have gone with the potential partner who offered the best financial terms. "Culture is the No. 1 driver in selecting a partner in our experience," he says.
It all starts up front, Shields adds, by conducting a "cultural due diligence" before selecting your eventual match. Questions to be asked include: How do executives at a potential partner make decisions? How do they view the delivery of health care? How do they prepare themselves and how do they address change in how health care is delivered?
Others echoed that perspective. Getting the cultural aspect of a transaction can be the most difficult, yet most rewarding, part of a deal, says David Jarrard, president and CEO of health care public relations firm Jarrard Phillips Cate & Hancock.
"When you talk about culture, you're talking about the very DNA of an organization," he says. "It's not just merging strategic plans or IT systems or billing software, the things that can be done mechanically. When you bring together one or two or many cultures, you're pulling together work styles, decision-making styles, but also people's callings, the mission-driven part of health care, which gets to the heart of why people choose to get involved in this field. It is often the most challenging aspect of a new partnership, but it's so important because, if you get the culture right, then you'll get the efficiencies and the results that you were looking for when you put together the partnership in the first place."
I talked to a number of hospital and health systems CEOs, who all backed up those sentiments. Here are a few tidbits of what they had to say.
Joel Allison, CEO of the combined Baylor Scott & White Health, tells me that he, too, puts culture on top of his priority list for potential partners. When the former CEO of Baylor Health Care System in Dallas, sat down with leaders from Scott & White Healthcare, Temple, Texas, he realized quickly that their mission, vision and values were all in perfect alignment. Plus, it didn't hurt that the board chairs and CEOs on both sides of the equation were all Baylor University grads, he jokes.
"I personally believe that culture is extremely important, and I would put it on the top of the list," Allison says. "Because, that goes to your mission, your vision, your values, you belief system. You have to cultivate that culture, continually. Great organizations have great cultures, and it's something that is nurtured and cherished."
Rockford (Ill.) Health System is searching for partners to pursue population health, after recently calling off a proposed merger with another health system. They continue to talk to suitors and are learning something new with each get-together, says President and CEO Gary Kaatz. He emphasizes going beyond the C-suite, and talking to the community and medical staff to get a feel for an organization's culture.
"We have learned a tremendous amount," he says. "I'm not going to go into specifics, but I will say that it's all about culture. It is amazing that, in this day and age, different health systems can be so divergent with regard to culture. I can't say that enough about it. It's a very fluid, ongoing, dynamic process and it certainly isn't just about the leader."
Culture may seem like this "nebulous," undefined entity, says Bob Page, president and CEO of the University of Kansas Hospital in Kansas City. But for him, it's all very easy to measure, and you can trace it back to how a potential partner views and treats the health care consumer.
"If you are trying to establish a culture around the patient, your workforce should all be able to go back and say, 'How does this tie to doing something right for the patient?' " Kaatz says. "We're only here for one reason, and that's to provide great care to patients. The simple equation is, if we don't have patients, we don't have jobs, and that goes for whether you're an accountant or housekeeper, or whether you're a nurse or pharmacist."