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Healthcare Reform

Beyond Laundry, IT, and Better Care: Why Hospital Alliances Could Become More Common

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Twenty-three regional hospitals in Georgia have created a partnership called Stratus Healthcare and will share resources, information and manage patient care together.

The hospitals will remain independent but will pool resources and develop coordinated information systems, meant to reduce costs by sharing information and preventing repeat tests or procedures.

Test results at one hospital will be shared with the others, said Dr. Ninfa Saunders, president and CEO of Central Georgia Health System and The Medical Center of Central Georgia.

“I think the key for us is this: The Medical Center, as one of the largest employers and the only teaching hospital in this part of the region, is taking this very seriously and taking the lead in this partnership so we can improve the health of the region, not just the community we are in,” Saunders said.

The coordinated system the hospitals will use to stay connected is a regional health information exchange, said Jack Buxbaum, vice president of HIE services at Xerox.

Buxbaum works on statewide exchanges, which connect smaller regional exchanges and fill in the gaps. Regional exchanges can get started simply in pursuit of better care, but there’s usually a business goal as well, he said, adding that hospitals in an alliance can share administrative services and nonclinical supports, such as laundry. But integrated lab testing requires further tech solutions.

“If they’re sharing labs because they want to deduct the cost of testing on a per-unit basis, then they have to integrate their clinical lab systems together so that ordering and receiving the results electronically becomes streamlined and automated,” Buxbaum said. “That in turn helps drop the cost further. Less paper, less shuffling, fewer people getting involved.

“You really should never deploy technology for technology’s sake, you should always deploy it based on the business strategy and some operational objectives.”

But there are business advantages to such hospital alliances as well, Buxbaum suggests that likely played a role in the formation of Stratus.

Mergers and acquisitions are becoming more high profile, especially since Tenet Healthcare Corp. announced its acquisition of Vanguard Health Systems Inc. last month.

Smaller hospitals can protect themselves against mergers by forming alliances. As mergers become more common, so will alliances, Buxbaum said.

“For small community hospitals, they probably all figured out they’re going to get gobbled up in a merger or acquisition and they know it, so they say ‘we’d better ban together, even if it’s with some of our competitors,’” he said. “It’s a strength in numbers thing.”

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