Independence Assessment and Determination of Hospital and Community Needs
Client/Profile
Small community hospital in a rural market
Challenge/Situation
To determine whether the hospital should merge with a health system based in the closest city, and if it chooses to merge, what it should seek from the arrangement.
Process
Legal counsel referred the hospital’s board to Veralon to help confirm or raise questions about their initial decision to merge. Veralon conducted a thorough analysis of the hospital along five dimensions to determine its ability to remain independent:
- Market position
- Physician-hospital alignment
- Financial position and access to capital
- Population health management readiness
- Leadership.
Results
Veralon concluded that it was in the hospital and community’s best interest to merge in the short term.
Through the analyses conducted for the independence assessment and a study of the community’s health needs, Veralon identified high priority needs for both the hospital and community and will develop financial estimates for each. Legal counsel will include these “non-negotiables” and “wish list” items in the term sheet.
Veralon will be advising the board and legal counsel on how the hospital’s large cash balance should be dealt with in the merger and how those monies should be allocated.