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Board Overview: Affiliation Models and Considerations A tool from HFMA’s Value Project Toolkit: hfma.org/valueprojecthfma.org/valueproject.

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Presentation on theme: "Board Overview: Affiliation Models and Considerations A tool from HFMA’s Value Project Toolkit: hfma.org/valueprojecthfma.org/valueproject."— Presentation transcript:

1 Board Overview: Affiliation Models and Considerations A tool from HFMA’s Value Project Toolkit: hfma.org/valueprojecthfma.org/valueproject

2 Contents Affiliation Models General Factors to Consider Market/Community Considerations Strategic Considerations Negotiation Considerations

3 Affiliation Models A wide and growing range of options and sub-options Structure follows function (where do we need to go) Models to the right are necessary for favorable access to capital Less integrated models (to the left) retain more control at the community level and are more reversible Either end of the continuum can be effective in gaining efficiencies and in accessing large enough populations to manage care effectively and assume risk

4 Affiliation Models How do the potential affiliation models match up with an organization’s strategic objectives? For example: System-wide economies Supply chain savings Revenue cycle savings Systemized approaches to investments and programs Specialized expertise and experience in population health management Regional economies The best regional footprint or service area for care delivery A large enough population for care management A logical media market for marketing and for care management A logical mix of primary care physicians, specialists, highly specialized programs, other facilities and programs (such as rehabilitation, hospice, home care, …) Partners with common interests and/or common competitors

5 Affiliation Models The key differences are between models that do or don’t require a change in control

6 General Factors to Consider When considering or developing an affiliation …

7 Market, Community and Organizational Considerations What are our biggest needs or goals from consolidation/affiliation? What do we expect our competitors to do next? What are our options for consolidation/affiliation? … in our region? … outside of our region?

8 Market, Community and Organizational Considerations (continued) Do we have a need/opportunity to enter more than one form of consolidation (e.g., one, for one purpose nationally and another for another purpose in our region)? What are the implications of our consolidation options for Our key physician groups? Our patients/projected members Our employees/staff? Our employers and other key stakeholders?

9 Strategic Considerations What could we gain? More workable approaches to population health _______________? Lower cost structure ____________________________? Faster transition from fee-for-service to value-based payment readiness and performance _____? More efficient/lower cost transition to value-based payment readiness and performance _____? Better approaches for patients/members ________________? Branding/image gains __________________________? Other ___________________________? What are the risks _________________? What other considerations come into play _________________? What are the major decision-points _____________?

10 Assessment/Negotiation Considerations Factors as we further assess and negotiate workable option(s) Financial commitment Governance Resulting legal entity (legal structure, powers, purpose, means of amending,..) Governing body Powers of the member/sponsors vs. the consolidation entity (e.g., reserve powers, capital calls, …) Leadership Who Linkages to our organization Incentives Management structure Next actions What, when? (High level) business plan Next action plan


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