Imagine for a moment a health care merger in which a single board of trustees and one management team ran the operation, duplicative services were eliminated, overhead was significantly reduced, and within just a couple of years, financial statements were recorded in black, not red. Does such a scenario represent a far-fetched-dream? Not in Southeastern Massachusetts it doesn’t. Evolving Funding Landscape for Not-for-Profits Not-for-profit organizations are being asked to do more with less,… The Southcoast Health System was formed in 1996 as a result of the merger of St. Luke’s Health Care System in New Bedford, Charlton Health System in Fall River, and Tobey Health Systems in Wareham. In addition to its three hospitals, Southcoast also includes an assisted-living facility, home health care and hospice, long-term care facilities, a wellness center and numerous outpatient medical services. According to the organization’s president and chief executive officer, John B. Day, the Southcoast merger was unique. Day is right. It was unique in that it was a true merger. The organization has one hospital license, one board of trustees, one management team, and one corporation for three hospitals. The results of such an approach have been dramatic – and impressive. After two years of operating at a loss, Southcoast Health System operated at a gain of $10 million in the most recent fiscal year. “By eliminating the duplication of costs that used to be at the three hospitals, we’re essentially doing everything at one,” said Day. “As an example, we don’t have three information systems, we have oneWe manage by function, not by site. So if you’re responsible for a specific area within the Southcoast system, you’re responsible for that regardless of where it takes place at all of our sites.” Southcoast recently gained the approval of the Massachusetts Department of Public Health to perform open-heart surgeries. Over the next three years, the system plans to invest $9 million for the program. Like all hospitals and hospital groups, Southcoast must contend with dwindling federal Medicare reimbursements and the rising costs of uncompensated care. But somehow, this collection of Bay State hospitals has found a way to make a merger work. Its finances have improved. It is embarking on new programs to offer patients. And it has completed a complicated merger that should serve as a model for others to follow.
Beyond Cash Donations: How New Forms of Giving Are Transforming Not-for-Profit Accounting
A model merger
PBN Branded Content
