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On The Integration of Fairview and the University of Minnesota Hospital - or What'd He Say?


Trust me, I'm a doctor...

Executive Summary: "... we will not be merging the two organizations into a new corporate structure at this time."

For some background on this little stunner, have a look at the post: A Brutally Honest Exchange at a Faculty Committee Meeting

Sample from Senate Committee on Finance and Planning - October 20, 2009

Tuesday, October 20, 2009

Professor Luepker next reported on the last Board of Regents' meeting, where Senior Vice President Cerra made a presentation on "Evaluating Integration of the Clinical Enterprise." Copies of the slides that Dr. Cerra used with the Regents were distributed to Committee members. This is a massive reorganization in a major portion of the University, Professor Luepker commented, and it caught his attention not only because it is a new direction for health-care settings but also because this is a billion-dollar-per-year enterprise (or more). The reorganization proposes the integration of the Fairview hospital management corporation with the University of Minnesota Physicians (UMP) and the University of Minnesota.

It struck him, Professor Luepker related, that apart from the financial magnitude of the proposal, there are a number of other questions that should be addressed.

-- Where does research and education fit in with this new, integrated organization? The presentation was mainly about the reorganization of clinical practice.

-- Who runs the organization? It appears that the proposed Board of Directors will be composed of non-University people, and it appears that the organization will be run like a business.

-- There are no dollars figures included in the presentation, but the amounts involved must be very large. Where will the dollars come from and what is the University getting involved in? One motivating factor is to gain market share and compete better with other health-care systems--but those systems now take University students and train them for free.

There are a number of elements to this plan that go beyond the Academic Health Center, he concluded, and the AHC is such a big part of the University that this issue clearly falls into this Committee's bailiwick.

What leapt out at her, Ms. Kersteter said, is that there is little about the teaching mission in the presentation, and that is more expensive in a teaching hospital. She said she was also concerned about the residency program; if that is done badly, there would be a big impact on the community.

If the new Board of Directors is primarily external, Mr. Erikson said, it is not likely it would focus on the educational mission of the Medical School. One could look at this proposal from a very different perspective and not understand that it more expensive to have a teaching hospital.

Professor Konstan said that if one looks at this from the 50,000-foot level, one can understand that the health-care industry is in a storm and people want to lash the rafts together, but one needs to be concerned that the University doesn't lash itself to a rock, which this could be.

Second, he said he would like to see a statement about the mission that the Board of Directors would be sworn to uphold, because it does not appear the mission would be the same as the University's mission.

Finally, he recalled the time when the University sold its hospital to Fairview; that was supposed to solve the problems.

Now this document shows a whole bunch of problems that weren't solved.

Why is the current system not serving the academic mission? This is like trusting the people whose last rocket didn't reach the moon when they say this next one will -- why trust the rocket scientists who failed? Will this arrangement just be in place for the next dozen years and then will there be something new?

This feels a lot like "trust me," he said.

A strange email:

To: Board Members, Faculty Members, and Leadership Teams

From: Frank B. Cerra, MD, Senior Vice President for Health Sciences
Bobbi Daniels, MD, CEO, UMPhysicians
Mark A. Eustis, President and CEO, Fairview Health Services

Re: AHC/Fairview/UMP Integration Discussions

Mon, Dec 21, 2009 at 3:07 PM

Over the past several months, we have been working through a process to collectively understand the feasibility and value of further integrating Fairview and UMPhysicians and creating an integrated clinical enterprise. The work has been extremely productive and has reaffirmed the value and strength of our partnership and our mutual commitment to clinical integration and building an academic health system. Management and governance have worked closely together to create a shared understanding of our respective organizations, positioning us well for continuing dialogue as we address future challenges.

•We are committed to our shared vision of becoming an academic health system.

•Clinical integration is critical to our success and we need to create systems and processes to deliver consistent outcomes and enhanced value for our patients.

•Further integration of Fairview and UMPhysicians can produce additional market and financial value, even though we will not be merging the two organizations into a new corporate structure at this time.

•We believe clinical integration must engage physicians and clinicians from across the system.

•We are collectively committed to achieving much of the value identified during the evaluation process using our current organizational structures and agreements and will reconsider our corporate structure when we believe it impedes our ability to substantively realize the value of the integration effort

The decision to defer structural integration should not be taken
as any indication that we are not committed to advancing the work of our partnership. As we reflected on the challenges associated with a merger and such complexities as organizational states of readiness, the complexities of legal / organizational structures, and each party's varying sense of urgency, we were concerned that the work surrounding structural integration could distract us from the critical work we need to do to advance our vision.

Going forward, UMP, Fairview and the AHC have agreed to pursue several specific initiatives that will promote continued organizational convergence into a patient-centered, integrated health system.

These include:

•Expand joint strategic planning among the partners to better align strategies, commitments, and operating interfaces to achieve the common vision of being and academic health system

•Invest in new models of care delivery designed to improve clinical outcomes, provide an exceptional user experience, and reduce total cost of care

•Determine and implement, within each organization, the needed changes to achieve a more advanced state of readiness to meet the challenges of system integration

•Improve system performance to generate the resources for investment in our collective vision of becoming an academic health system

•Develop and implement integrated, branded clinical service lines

•Promote physician-to-physician relationships (Fairview Medical Group, UMPhysicians and independent physicians) across the organization.

•Capture the value of the University brand for the partnership through UMPhysicians and existing agreements.

We are excited about the work we need to do and the renewed commitment to work together to achieve our partnership goals to more effectively position the partnership to grow and enhance the clinical enterprise while bringing the academic enterprise to greater prominence.

Thank you for your ongoing commitment and dedication to Fairview, UMPhysicians, University of Minnesota and, most importantly, the patients we serve.

Merry Christmas, Dr. Cerra...

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