Coopetition: The Wave of the Future

January-February 1995

As this decade evolves, the winds of change will have dramatic implications for Catholic-sponsored healthcare organizations. Regardless of how the 104th Congress approaches healthcare reform, the reality of significant change within the healthcare ministry is being witnessed daily. Healthcare organizations are "right sizing," joining networks, merging, and being acquired by or collaborating with traditional rivals. Trustees, sponsors, and institutional managers know that their organizations must consider such changes in order to survive.

Today's national political agenda implies that healthcare costs are out of control. How much more of the gross domestic product can healthcare consume? As the number of uninsured persons grows, the purpose of Catholic-sponsored healthcare becomes very clear: to serve those in need regardless of their ability to pay. This guiding principle sets Catholic healthcare apart from those organizations which exist to please stockholders.

Managed Care
Can mission win over margin, or will Catholic-sponsored facilities be unable to compete for managed care contracts because of a commitment to serve the poor? Without universal coverage for all citizens, Catholic hospitals may be identified as higher in cost and therefore unacceptable to managed care insurance plans.

This potential dilemma is likely to occur in most markets served by Catholic healthcare institutions. The inherent desire to serve the poor is now being questioned, as "survival of the fittest" becomes the real bottom line. The easy answer would be to abandon one's mission, but we know that is not the correct response during these tumultuous times. Doing so would require sacrificing the ministry's raison d'être. Catholic providers must find creative solutions to survive; otherwise, the number of Catholic-sponsored healthcare facilities will undoubtedly decline.

Being price competitive while serving the poor is a tough challenge, as difficult as the challenges many religious congregations faced when they established their healthcare institutions. Those sisters had limited resources, enormous faith, and a belief that they were called to serve the needy. Perseverance and hard work demonstrated that their goals were achievable even though they were, in many instances, faced with intense competition.

Such was the case in Zanesville, OH, where the Franciscan Sisters of Christian Charity founded Good Samaritan Medical Center nearly 100 years ago. Throughout the twentieth century, fierce competition with neighboring Bethesda Hospital drove the delivery of healthcare. Realizing that past relationships would no longer work, Good Samaritan Medical Center and Bethesda Hospital have begun collaborating in an effort to better steward resources to meet local needs.

The collaborative approach has already produced positive results. For example:

  • A jointly operated community trauma and oncology registries began in 1989.
  • A joint magnetic resonance imaging program was developed in 1991.
  • A jointly owned ambulance began service in August 1994.
  • The hospitals currently plan to create a joint regional laboratory.
  • The county health department, along with both hospitals, has developed a healthier communities assessment initiative to identify needs of citizens throughout the area.
  • In conjunction with 130 physicians who serve both hospitals, the two facilities are forming a physician hospital-organization. The hospitals are also creating a complementary management service organization to support physicians' desire to lower overhead costs in preparation for managed care participation.

These initiatives are geared toward creating an integrated delivery network that allows the missions of both hospitals to be fulfilled. These integration efforts provide a route to maintain a Catholic healthcare presence in central/southeastern Ohio. Some have coined the phrase "coopetition" to describe this new effort, which acknowledges the history of competition while embracing cooperation as the wave of the future. This shift in emphasis has not eliminated competition but rather highlighted the opportunity for institutions to work together to lower the cost of care while improving access.

As a prescription for the remainder of the 1990s, coopetition symbolizes the manner in which Catholic-sponsored healthcare organizations can and will thrive and survive. It is essential that the heritage established by religious congregations continue. By developing new and better relationships with other providers, Catholic sponsors can preserve the opportunity to serve.

Responding to Community Need
Upholding the mission may not save an institution. Local market conditions will determine the number of providers a community can support and the services they offer. Healthcare reform will help rewrite mission statements to focus on community health instead of institutional survival.

The definition of Catholic-sponsored healthcare need not change, only the application. Success will be measured by how well we respond to community needs — the same standard established when the founding sisters began their healthcare ministry.

Mr. Barone is president, Good Samaritan Medical Center, Zanesville, OH.


Copyright © 1995 by the Catholic Health Association of the United States
For reprint permission, contact Betty Crosby or call (314) 253-3477.

Coopetition - The Wave of the Future

Copyright © 1995 by the Catholic Health Association of the United States

For reprint permission, contact Betty Crosby or call (314) 253-3490.