When Strategy Informs Structure: Successful Board Oversight of Physician Integration at Mercy Health

By Mary K. Totten 

The road to integration of hospitals and physicians has been a rocky one for many health care organizations. Failed attempts to integrate in the 1990s resulted from the realization that operating physician practices was very different from operating hospitals, leaving many health care providers wary of heading down the same road again.

Today, delivering greater value in health care demands close working relationships among hospitals and physicians. Realizing that “working solo” is becoming an outmoded option, hospitals and physicians that walked away from earlier integration missteps are now testing a number of new models for collaboration while trying to avoid the mistakes of the past.

Mercy Health, a regional health system based in Chesterfield, MO, began its journey toward integration some 25 years ago as a hospital organization “loosely affiliated” with its physicians around specific activities, such as joint purchasing of supplies and equipment.

“In the early 1990s, we began to employ physicians and encountered the same issues and problems other systems did,” said Mike McCurry, executive vice president and chief operating officer. However, instead of abandoning integration, Mercy stepped back to analyze not only what went wrong, but also what went right about earlier initiatives. This evaluation led to developing a new model for hospital- physician integration at Mercy.

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