Posts tagged ‘Holy Redeemer Health System’

July 27, 2012

Nonprofit Mergers Can Be Like Dating

Nonprofit mergers can be a bit like dating. Sometimes, as both parties get to know each other better, they discover that they are not well suited for a long-term relationship. In other cases, the parties might feel they’ve met their soul mate and, therefore, they decide to spend the rest of their lives together.

My last blog post looked at why the merger plans by Abington Health and Holy Redeemer Health System failed, ending with the alienation of the entire community. With this post, I want to explore the successful merger on July 1 of seven United Way chapters in Pennsylvania and New Jersey.

Why did the United Way merger come together while the Abington and Holy Redeemer effort failed?

I spoke recently with Jill Michal, President and CEO of United Way of Greater Philadelphia and Southern New Jersey. While Michal would not compare the United Way merger with any other nonprofit merger, successful or unsuccessful, she was willing to provide insights about what she feels allowed the United Way merger to come together so well.

In short, she indicated that the merger was made possible because of shared values and enormous trust.

Given that each of the organizations in the merger were all United Way chapters, it’s easy to understand that they certainly held common values. Unfortunately, while Abington and Holy Redeemer both operate hospitals, the core values of each system are quite different; Abington has secular values while Holy Redeemer has Roman Catholic values. Sadly, the leadership of those organizations did not seem to anticipate how this would lead to controversy.

The United Way chapters developed trust in one another in a variety of ways. For more than a decade, the United Way chapters in the region engaged in collaborative efforts. Volunteer leaders and staff knew many of their counterparts and had worked collaboratively with them.

The merger exploration was not rushed; Michal says it took two years of work to explore a merger and craft an agreement. The time allowed each of the chapters to become comfortable with the merger idea and to work through the many details.

Early on, the merger discussions involved key staff and board members. As the talks became more focused and serious, the United Way discreetly reached-out to other stakeholders, according to Michal. This engagement also helped further build trust.

Susan J. Alston is a development professional who wrote an interesting research paper while in graduate school at Bay Path College. Fundraising Data Analysis and Stakeholder Communications: Considerations Prior to a Nonprofit Merger looks at the role that communications play in nonprofit mergers:

Orchestrating timely and hierarchal communications about the impending merger with stakeholders (state and private funders, past board members, major donors, and other key volunteers, staff) in an effort to encourage positive and supportive engagement will retain loyalty to the mission and purpose of the newly merged organization.”

I thank Alston for sharing her paper with us.

The United Way seems to have understood the link between effective communications and trust that Alston explored.

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July 20, 2012

3 Easy Steps to Alienate a Community

Abington Health and Holy Redeemer Health System, both operating hospitals in suburban Philadelphia, announced their formal intent to merge into a regional health system.

The joint announcement came on June 27.

By July 18, the deal was officially declared dead. Along the way, Abington Health managed to anger medical staff, donors, and the community it serves.

If your organization wants to alienate its entire community in a matter of days, follow these three simple steps embraced by Abington Health:

1.  When making an organization-altering change, do not engage stakeholders.

When the merger announcement was made, most people on staff at the hospitals and in the communities served were caught by surprise. While the boards of both organizations formally authorized the signing of a letter of intent to merge, staff and the general public were left largely in the dark. Neither the community nor staff had much, if any, idea that merger talks were taking place. Even after the announcement was made, the public was presented with little justification for the action.

With a reported operating loss of $2.8 million for the nine months ending in March, it’s easy to understand why Holy Redeemer was looking for a merger partner.

However, with a reported operating surplus of $16 million for the fiscal year that ended June 30, it’s more difficult to understand why Abington Health pursued the merger.

Unfortunately, neither organization did a good job of explaining the value of the merger, either leading up to the announcement or following it.

You can read the press release from June 27 by clicking HERE. You’ll notice that the announcement is full of generalities and platitudes while being very short on specifics.

A news report revealed that 150 Abington doctors held an emergency staff meeting following the merger announcement to voice their opposition to the move. According to PhillyBurbs.com, Dr. Philip Rosenfeld, with Abington for over 40 years, said, “[The meeting] was very passionate; not one doctor was in support of the merger.”

Of the hospital’s quiet negotiations over the merger, Dr. Rosenfeld said, “It’s been a terrible slap in the face.” He added that the Abington administration showed “complete disregard for the staff.”

While letters, emails, social media messages, and telephone calls deluged the Abington administration, a community group was quickly organized. Stop the Abington Hospital Merger gathered over 4,000 petition signatures.

Clearly, the secretive merger talks and the tight-lipped post-announcement response from administrators set off a firestorm among medical staff and the community.

2.  Cease being true to the organization’s and community’s values.

Secrecy was trouble for the merger. The failure to engage stakeholders was a problem. And, the lack of effective post-announcement communication made matters even worse. However, even if the merger talks had gone public, even if the rationale was solid and clear, the merger was probably doomed from the start. 

The core problem for the merger involved the abortion issue even though Abington performed fewer than 50 in the past year. Holy Redeemer is a Catholic institution while Abington is secular. As a result of a merger, Abington would have ceased to provide abortions. And, questions arose about how the adoption of some Catholic values would impact other medical services as well.

Lisa Kelley, one of the petition organizers, said it simply: “We don’t want a Catholic influence, we want Abington to stay secular.”

Without staff and community input, Abington officials planned on a radical change to the organization’s core values. Officials planned on abandoning at least some secular values and replacing them with Catholic values. For the diverse community, this shift in values was hugely problematic.

Members of the community and staff voiced concerns not only about the abortion issue, but how the adoption of Catholic values would impact a variety of other medical services including end of life issues. Sadly, officials did not preempt concerns with solid information and did not adequately respond when the issues were raised.

One of the chief responsibilities of a nonprofit board is to vigilantly guard the institution’s mission and values. Changing Abington from a secular hospital to a secular hospital with Catholic values would be a fundamental change to the organization.

A nonprofit organization should not dramatically shift its values without a consensus from its stakeholders.

The Jewish Social Policy Action Network noted, “It would be ironic if an attempt to make the hospital more financially secure leads to financial hardships for such a highly regarded medical center.”

Yet, the damage has probably been done. Abington alienated the medical staff and the pro-choice members of the community with its plan. Now that the merger is off, Abington has alienated the anti-abortion members of the community as well.

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