After a merger or acquisition, functions often become consolidated and space is repurposed. Health systems frequently make renovations to create a consistent identity across all facilities and meet organizational standards for patient care. But this doesn’t occur immediately or universally. Expected return on investment weighs heavily in decision-making.
“For our smaller hospitals at very rural sites, for example, we’re not likely to spend $5 million to renovate inpatient spaces because there is little or no chance that those facilities will increase their patient volume as a result,” says Neuner. “They would simply be saddled with that depreciation as an added expense.”
Geisinger’s first goal is to make new acquisitions profitable and self-sustaining. “Once we do that, we can take the next step,” Neuner says.
CHI typically does not make a lot of visible changes to the facilities it acquires. “Our branding has more to do with how patients are treated,” Smith says.
When they first learn that their institutions are being acquired by another organization, many facility and environmental services managers have misgivings. They may worry about their job security or the burden of learning new policies and procedures.
“There is a lot of fear of the unknown,” Thomas says. “We try to settle those fears down as much as possible. But anytime you’re dealing with an acquisition, some people are intimidated.”
Many facilities managers are delighted to become part of Geisinger, while some choose to resign, adds Neuner. “There are those who embrace change, and there are those who are offended by it,” he says. “The latter tend to leave on their own volition in the first year or so.
“We never terminate anyone,” Neuner continues. “It just seems to sort itself out.”
Change is constant
In the current health care climate, change is constant, and no health care leaders are confident of what the future may bring, observes Rosalyn Cama, FASID, EDAC, whose New Haven, Conn.-based firm specializes in evidence-based health care design. She argues that the challenges faced by facilities going through mergers or acquisitions really are no different from those that health care institutions are confronting right now.
“They are asking the same questions,” she says. “Who are we? How can we deal with the ever-changing market and health care transformation? How do we improve patient care and comfort?”
To be successful today, facility directors need to understand the big picture of health care and their role in improving patient outcomes and reducing costs, notes Gehring.
“Before a merger or acquisition is impending, we need to take the lead on patient safety and satisfaction,” he says. “We need to understand why we do what we do and make sure we are doing it as efficiently as humanly possible.”
Carolyn Schierhorn is a Wheaton, Ill.-based freelance writer who specializes in health care and construction topics.
Branding post-acquisition renovations
More than 60 percent of hospitals and health systems undergoing consolidation will renovate facilities in the next two years, according to the 2015 Construction Survey conducted by Health Facilities Management and the American Society for Healthcare Engineering. Rebranding drives a large proportion of post-acquisition interior upgrades, says Ana Pinto-Alexander, IIDA, EDAC, principal and senior vice president of HKS in Indianapolis.
“The nature of the renovation depends partly on whether the acquiring organization is a ‘branded house’ or a ‘house of brands,’ ” she notes.
A branded house, such as Apple Inc. or Cleveland Clinic in the health care realm, has a strong organizational identity and consistent products and services, Pinto-Alexander explains. A house of brands, in contrast, is a collection of strong brands that individually are better known than the parent organization. Just as Johnson & Johnson comes to mind in consumer products, Ascension Health, the nation’s largest nonprofit health system, is an example of a house of brands, she says.
St. Louis-based Ascension, a client of hers, has many standards that must be followed in renovations, but they tend to be related to cost savings, and patient comfort, health and safety, as opposed to requiring a specific color palette.
“Ascension has done a lot of research to create standards for the best care,” Pinto-Alexander says. “They have specifications for minimum room sizes, designate manufacturers we must order from, require that only non-harmful products be used and disallow anything that would appear wasteful and extravagant, such as fancy decorative ceiling tile or carpeting in patient corridors. They don’t want to be perceived as having spent too much money on facilities because people may think that’s why health care is so expensive.”
Another of her clients, Indianapolis-based Indiana University (IU) Health is a branded house that specifies in more detail how its facilities should look and operate, from the color of counters to the positioning of reception desks and kiosks.
“At IU Health, receptionists, no matter where they are, have to wear a uniform that includes a white shirt and navy blue sweater,” she notes. “They even brand the people.”