Reaching toward unity. Catholic facilities can triumph with geographically linked, regional systems

Healthcare systems with geographically dispersed facilities that are not the dominant providers in their regions are having difficulty, but Catholic systems can more effectively meet their mission and goals by developing geographically linked, regional systems under one parent corporation. As inpatient utilization declines and the fiscal bottom line deteriorates, the question of merger frequently arises. When Catholic and non-Catholic facilities discuss collaboration, the issue of whether the new entity must be owned and organized consistent with Catholic doctrine engenders the most emotion. Sometimes Catholic facilities offer a "condo arrangement" for a few services that are inconsistent with Catholic doctrine or offer to terminate their sponsorship. A preferred option is a collaboration or merger of Catholic healthcare facilities of various religious sponsors operating in the same market area. Some of the sticky issues in most mergers include gaining a clear consensus on the mission, goals, and organizational values; developing a sponsorship-ownership-governance pattern acceptable to the various parties; and demonstrating the ability to acquire more capital and reduce operating expenses. The most effective short-term solution for Catholic facilities and systems is to emphasize specific product lines, but this strategy will probably falter as the dominant facilities enhance their clinical sophistication, gain greater public recognition, and increase their market shares in these product lines. Long-term solutions will lie in Catholic facilities' ability to diversify horizontally and vertically to develop a geographically linked, multilevel system with an alternative healthcare payment system under one holding company.