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Medical Group Management Association

Executive Session: Navigating a successful merger with leaders focused on being patient-driven

Podcast - April 25, 2021

Governance

Partnerships, Mergers & Acquisitions

Leadership Development

MGMA Staff Members
 

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Gary S. Kaplan, MD, FACP, FACMPE, FACPE, chief executive officer, Virginia Mason Franciscan, and senior vice president, CommonSpirit Health, has spent the past 21 years as chief executive overseeing the Virginia Mason team serving the Pacific Northwest.

Perhaps most notable for adopting methods from the Toyota production model and training practice leaders in Lean concepts, Kaplan has long been known for preaching the importance of physician practice independence and strong dyad leadership between physician executives and administrators.

Thus, he may not seem the likeliest candidate to speak to the positives of mergers and acquisitions in healthcare today. But the need for adapting to serve patients was clear to him when he first took the reins as CEO at Virginia Mason in October 2000.

“We as an organization needed to change,” Kaplan said about the state of the organization back in 2000. “I stood up in front of our professional staff, several hundreds of physicians and said, ‘we change or we die.’”

That change over the past two decades involved acknowledging that the delivery of care could no longer be designed around physicians and instead around the customer: The patient. “The first element of our strategic plan was to move from what I used to be proud of saying — being a physician-driven organization — to really being a patient-driven organization,” Kaplan said. “And that's really been the true north, the touchstone for the organization.”

As the healthcare industry has evolved, consolidation has posed challenges for independent group practices such as Virginia Mason, and thus prompting the consideration of a new strategy going forward to continue meeting the goals set years ago.

“We exist in a hyper-competitive urban market. … My board and I looked at this and said, ‘Virginia Mason deserves better than hanging on by the skin of our teeth: Our doctors, our team members, and most importantly, our patients.”

As a result of a successful clinical partnership with CHI Franciscan, Kaplan said the two organizations found themselves “to be very complementary,” and began working to bring out the best in each other via a recent merger, completed this January.

“One of the reasons that we believe this is the right partner for us is that we have agreed that the Virginia Mason production system will be the management system across the entire footprint of Virginia Mason Franciscan Health,” Kaplan noted. As part of the larger CommonSpirit Health system, Kaplan noted that the newly combined Virginia Mason Franciscan Health “will be the innovation hub” for CommonSpirit. “The bottom line is making a difference for the people we serve.”

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