Strategic Plan for Acquisition of Altru Health System

Julie BentleyHCS/586

March 28, 2016Dianne Nelson

Mayo Clinic Health System to Acquire Altru Health System

• Competition buy-out.• Growth of new market territory, academics,

members, and research facilities. • Expansion of new market interests.• Public health and new market interest for

Young Adult Medicine.• Public marketing for Child and Adolescent

Obesity Market and Decrease.

Acquisition Mission, Vision and Values

Mission: “To inspire hope and contribute to health and well-being by providing the best care to every patient through integrated clinical practice, education and research” (Mayo Clinic, 2016).“Improving Health, Enriching Life” (Altru Health System, 2015)Vision: “The Mayo Clinic Health System will provide an unparalleled experience as the most trusted partner for health care” (Mayo Clinic, 2016). Values: • Respect * Innovation• Compassion * Stewardship• Integrity • Healing• Teamwork• Excellence

Acquisition Mayo and Altru Health System Goals

3rd Year – • Upgrade current computer and technology systems at Mayo

and Altru. Start date is January 1, 2017 with completion September 30, 2017.

• Promotion of expert medical services in area with medical services catered for young adult and adolescent health care needs.

• Promotion of healthier lifestyle for all age populations in region and area. Completion in 2-4 years with measurement standards reported yearly to Mayo Clinic Health Care System. Increase of promotion by 10-20% by 2018.

Acquisition Mayo and Altru Health System Goals Continued

4th Year –

• Reassessment of SWOT analysis for additional strengths, weaknesses, opportunities, threats and performance gaps.

• Long-term range goals for increased research and development for growth for medical expertise and new medical technology changes.

• Measurement of community public health use - increase by 10-20% by 2018.

• Obesity Decrease – Adults 23% to 20%. High School – 14.1% to 12%. Child – 15 % to 10%.

Acquisition Mayo and Altru Health System Goals Continued

5th Year – • SWOT analysis continues.• Health Assessments in younger aged patients to

review current strategic plans for obesity, drug and alcohol abuse in area, mental health needs, and colorectal cancer decreases due to environmental concerns. Colorectal cancer decrease in new cases by 10-15%.

• Financial Resources long range plans assessment – long-term trusts for capital. Increase in trusts by 18 – 35%.

Environmental Scan (SWOT)

Strengths

• Altru Health System is part of an Academic University of North Dakota Medical School.

• Has additional academic resources for biochemistry, molecular biology, physics, epigenetics, research and development.

• Over 4000 Health Professionals that serves 200,000 plus population in Northeast North Dakota and Northwest Minnesota area for over 100 years.

• Medical expertise with addition of Mayo Clinic Health System tele-medical capabilities. Part of the Mayo Clinic Health Network.

• Community Involvement for obesity, binge drinking/alcohol

consumption, financial barriers that impact health care, colorectal cancer decrease, and educational programs that increase preventative health use.

Environmental Scan (SWOT)

Weaknesses

• New Participants in Health Care Industry arena in region and area.

• Lack of medical expertise for severe/critical disease processes.

• Loss of reimbursement systems due to regional and area political influences and environmental concerns from agricultural industry.

• Loss of experienced staff and medical experts in area and region.

• Environmental disasters due to weather anomalies in past - need strong contingency planning for region disasters and region shutdowns.

Environmental Scan (SWOT)

Opportunity

• Younger patient medical needs - adolescents, young adult due to being near academic University, obesity needs, strong area of alcohol and drug medical conditions, behavioral health issues, Large area of colorectal cancer diagnosis, Less preventative care promotion area.

• Attachment to a fine Academic University in North Dakota with a medical school and academic research.

• Only medical facility in Northeastern North Dakota and Northwestern Minnesota area.

• Promotion of expert medical services to increase population transfer or growth.

• Promotion to draw other large employers Headquarters to area and region.

Environmental Scan (SWOT)

Threats

• New Participants in Health Care Industry arena in region and area.

• Lack of medical expertise for severe/critical disease processes.

• Loss of reimbursement systems due to regional and area political influences and environmental concerns from agricultural industry.

• Loss of experienced staff and medical experts in area and region.

• Environmental disasters due to weather anomalies in past - need strong contingency planning for region disasters and region shutdowns.

Financial Plan for Acquisition of Altru Health System

• Opens up New Market Entry for Young Adult and Child and Adolescent Obesity patients for continued revenue.

• Capital expenditures and additional resources from new and current trusts.

• Altru Health System becomes a “resource bundle.” • Year 1 & 2 Revenues decreased due to assets and

revenues being used for acquisition purposes. • Additional market resources for new patients

(Marketing and Advertising utilization).

Financial Plan for Acquisition Budget

• Total Assets of Joint Systems $502,851,778

• Total Liabilities of Joint Systems $ 28,641,919,80

• Market Share $ 79

• ROI (per patient) $ 23.42

Internal Resources and Financial Capabilities Affect on Financial Plan and Implementation

• Strengths and Opportunities far outweighed the threats and weaknesses of both health systems.

• Weaknesses can be turned around within 1-3 years. Weaknesses will become strengths as medical expertise increases with acquisition.

• Technology upgrades of current system is integrated.• Threats of continued new entry will continue to be

monitored and evaluated throughout the acquisition due to competitive outbidding for Altru Health System or take over region with other health care system.

Acquisition Measurement Guidelines

1) Determine what to measure – child and adolescent obesity decreases and increases (BMI).

2) Colorectal cancer new case numbers.3) Community Public Health Use of Young Adult medicine.4) Establish standards of performance – include tolerance range5) Measure actual performance – at correct times for accuracy.6) Compare actual performance to standards for Benchmarking.7) Take corrective action if actual results fall outside tolerance range. 8) Patient excellence surveys to really see how acquisition and changes are seen

in community and to the public. 9) Minimum amounts used only. No extra information needed. 10) Include long-term and short-term measures. 11) Should be used to pinpoint exceptions. 12) Measurements should be used to reward instead of punish (Hunger &

Wheelen, 2011) (Swayne, Duncan & Ginter, 2008).

Feedback Considerations for Success of Acquisition

• Always keep the “End” in mind when focusing on Success – if you do not have somewhere to go, you will not begin.

• Email contact.• Weekly and monthly Telecommunication

contact – Skype.

Thank - You

The Acquisition Team wishes to thank the Board of Trustees and the Financial Funding Groups that we have invited today. Questions will be answered at this time.

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