By JULIE MINDA
"Culture eats strategy for breakfast."
The adage attributed to management guru Peter Drucker helps explain why it is so important for organizations that are merging or affiliating to attend not only to the operational details of their partnerships but also to the cultural aspects, according to Ruth Brinkley, president and chief executive of KentuckyOne Health of Louisville, Ky.
"You have to try to shape the culture, to be intentional" when bringing together organizations, said Brinkley. "You have to recognize the heritage of each (partner), what it means and how people experience that heritage. … (And when combining the organizations), you have to ensure everyone sees themselves in the new purpose and value and mission statements."
During the Catholic Health Assembly in June, Brinkley and KentuckyOne Senior Vice President of Mission Brian Yanofchick will share insights they've gained as they've helped unite under the KentuckyOne umbrella three systems — one with Catholic roots and the second with Catholic and Jewish roots and the third a secular teaching hospital. Brinkley and Yanofchick's Innovation Forum session is "Expanding Horizons in Catholic Health Care Partnerships."
A walkway at Sts. Mary & Elizabeth Hospital in Louisville, Ky., part of KentucyOne.
From three to one
KentuckyOne is part of Englewood, Colo.-based Catholic Health Initiatives. The Kentucky system, which has about 13,000 employees, is the result of negotiations that began around 2005 as CHI considered uniting its ministries around Louisville and Lexington, Ky., as well as a university health system based in Louisville. At that time, CHI owned the Saint Joseph Health System of Lexington and had a minority interest in the Jewish Hospital & St. Mary's Healthcare system of Louisville. Leaders of all of these organizations and those with the University Medical Center of Louisville explored a possible three-way merger.
But, some community members and government leaders objected to the prospect of a state-owned system merging with a faith-based organization, and so when the Saint Joseph system and the Jewish Hospital & St. Mary's system merged in early 2012 under the newly formed KentuckyOne, facilities operated by the University Medical Center were excluded from the deal.
But negotiations reopened among the organizations when the University Medical Center issued a request for proposals to affiliate. The organizations entered into a joint operating agreement in November 2012 under which KentuckyOne oversees the University Medical Center's University of Louisville Hospital and an affiliated cancer center, but the assets of the partners are not merged. The agreement allows for the University Medical Center's policies on women's health, end-of-life care and pharmaceuticals to remain intact and for that medical center to continue operating women's services outside of the partnership with KentuckyOne.
Yanofchick said with each new combination of organizations, the people associated with the organizations "were ready to move ahead, and they saw the possibility of creating a stronger and more stable organization, but people were worried about how to combine" the systems successfully.
Fear of the unknown
Brinkley said, "People were excited but there was anxiety, they were concerned about the unknown, they weren't sure how the changes would affect them personally."
Yanofchick said that with the joining of the partners, people at Catholic facilities feared their heritage would be diluted. In contrast, the Jewish and secular organizations "were afraid we'd put up crucifixes and a papal flag." Brinkley added that Jewish health care facilities do not overtly demonstrate and display their Jewish heritage like Catholic facilities normally do; and so those organizations expressed their religiosity differently. Also, there was a concern by some at the Jewish facilities that the merger with a large Catholic organization might result in proselytizing by the Catholic entities, she said.
And, when the secular university facilities were brought into the mix, there was a lot of public scrutiny, said Brinkley, and a fear about issues related to the separation of church and state.
Jim Taylor was president and chief executive of University of Louisville Hospital when the joint operating agreement with CHI was negotiated and he advised the university in its transition to the new operating structure. Taylor said administrators, staff and physicians at University of Louisville Hospital were concerned about whether KentuckyOne and CHI would grasp the workplace dynamics of an academic medical center and a medical school affiliate, but he said they've been heartened that CHI has shown an increasing interest over time in academic health care — as when a system that CHI cosponsors acquired Creighton University Medical Center in Omaha, Neb. Ken Marshall, president of University of Louisville Hospital, said that faculty physicians in a teaching hospital need the time and budget not only to treat patients, but also to teach and conduct research. Resources need to flow accordingly.
Deliberate approach
KentuckyOne began its cultural integration by surveying employees of the three systems to determine what aspects of their organizations' cultures they most wanted to preserve. Those in the legacy Saint Joseph system were most concerned with preserving the compassion and excellent care they were known for. Employees in the legacy Jewish Hospital & St. Mary's system were interested in preserving their position as a top provider of specialized care, including in transplantation and in cardiovascular procedures. Responses of the university system employees revealed a concern for preserving safety net services for the poor and clinical research.
KentuckyOne drew on the employee surveys and insight gathered at executive leadership meetings to write purpose, values and mission statements melding the top priorities of the merging systems. KentuckyOne finessed its final language when the university system came on board and provided input.
"We had to find new words and phrases to express our priorities," said Brinkley — "ones that were not overtly religious but conveyed similar meanings." For instance, the purpose statement — "to bring wellness, healing and hope to all" — captures themes important to people at all KentuckyOne component entities.
KentuckyOne has been using its mission, purpose and values statements to bind the three legacy systems, she said.
Brinkley said, "We are building a culture so that people feel involved and have a stake in what we're doing. We're making steps, but we're not there yet.
"But, there is hope that we'll get there."
Three legacy organizations formed KentuckyOne
The legacy systems that are part of Louisville, Ky.-based KentuckyOne are:
Saint Joseph Health System of Lexington, Ky.
- Wholly owned by Catholic Health Initiatives at the time of the early 2012 merger that formed the KentuckyOne system.
- At the time of the merger, included seven central Kentucky hospitals, all of them Catholic.
Jewish Hospital & St. Mary's Healthcare of Louisville
- Originally jointly sponsored by CHI and Jewish Hospital HealthCare Services, with CHI the minority partner.
- Came under the fiduciary responsibility of KentuckyOne with the 2012 merger.
- At the time of the 2012 merger, included two inpatient hospitals, four outpatient hospitals, a psychiatric hospital and other facilities in central Kentucky. Some of these facilities are Catholic, and some Jewish.
- Under the merger, the Jewish Heritage Fund for Excellence was established to oversee the use of the proceeds of the merger. Funds are used to benefit Louisville's Jewish community and to support research.
University of Louisville Hospital and James Graham Brown Cancer Center of Louisville
- Had been managed by the operating company University Medical Center.
- Now is overseen by KentuckyOne, under the joint operating agreement established in November 2012.
- Women's services are operated outside of the KentuckyOne agreement, by University Medical Center.
- CHI has pledged to invest nearly $1.4 billion over the 20 years of the joint operating agreement.
Organizations can take deliberate steps to ease transitions during mergers, partnerships, affiliations
Key executives involved in the mergers and partnership that formed KentuckyOne shared tips with Catholic Health World, on how organizations can shape a desired culture and ease the tumult of transition at a newly unified organization:
- From the outset, ensure that the merging organizations' missions are compatible.
- Also from the start, identify "nonnegotiables" for the potential partners, so that the parameters of a potential deal are defined early. Pay attention to the culture of leadership. KentuckyOne asked its leaders to assume the positive intent of others and to treat colleagues with respect, for example, by giving each other undivided attention.
- Keep employees in the information loop; tell them about changes in the pipeline and the personal, professional and clinical implications of those changes.
- Gather leaders of legacy systems together often to talk openly about the changes afoot, culture issues and leadership styles.
- Involve board leaders in the culture work. KentuckyOne's 18-member board includes representatives from each legacy system.
- To avoid having trustees identify more closely with their legacy system, rather than the new organization, involve trustees in the development of the guiding mission of the new organization.
- Encourage the continuation of legacy system traditions. Each KentuckyOne facility observes important dates associated with its heritage -- such as the marking of saints' days at the Catholic facilities.
- Ensure ongoing strong relationships with local religious leaders.
- Maintain a continuity of leadership.
- Understand the needs of physicians involved in the partnering organizations.
- Be patient, a complex shift in culture takes time.
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