The Strategic Alignment Committee

Hospital boards are encouraged to form a  “strategic alignment” or similar committee to facilitate the governing board’s ability to evaluate the many business opportunities that will arise for  provider organizations in the wake of seismic health reform legislation. The expectation is that the entire spectrum of healthcare organizations— not just hospitals and health systems, but also  insurers, specialty facilities, medical groups, and  physician networks—are actively considering both  vertical and horizontal relationships of varied sorts in order to better position themselves to respond to health reform-prompted economic opportunities.

In such a unique environment, it is incumbent upon the hospital board to shed its reputation for inertia and assert a proactive response to such unique opportunities. The purpose of the strategic alignment committee is to evaluate, on behalf of the board, business proposals and risks early in the opportunity cycle—as opposed to condemning them to the queue of the normal board agenda. The expectation is that the work of this committee will favorably position the full board to respond quickly and in an informed manner to meaningful alignment opportunities.

W hat’s At Stake

It should be no surprise to the hospital board that reform legislation has dramatically accelerated thoughts of consolidation across all aspects of the healthcare sector. As the healthcare financing system shifts from traditional fee-for-service arrangements to “bundled” or “value-based” payment models, market participants are scrambling for proper positioning, identifying those structures most likely to enhance financial viability. Competing institutions are now evaluating the benefits of consolidation. Stand-alone hospitals are considering linkage with larger systems. Regional systems are reviewing potential synergies with national systems. Fiercely independent physician groups are revisiting
employment or other forms of affiliation with local healthcare systems. Parties that heretofore would never have spoken to each other are now actively engaged in alignment discussions.

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