Health Care Strategic Alliance Deals: The Practical Aspects

Shared Values, Objectives, and Outcomes

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Shared Values, Objectives, and Outcomes

It is critical for hospital executives to flesh out these key issues early in the process of contemplating a strategic alliance. Unless the parties establish a meeting of the minds on what they want to achieve and how they will achieve it, a strategic alliance may not be successful.


The parties should have a hierarchy of values that explain the rationale for an alliance. For instance, the parties need to assess if a charitable or religious mission will be a centerpiece of the deal. Other parties may focus on serving a particular population, such as a rural community, an ethnic group, or seniors. Yet others value improving their margin (possibly as the sole means of survival) above all else. The parties need to determine if their values are consistent and, if not, whether differing values can coexist or complement one another over the long term. Put another way, the parties should decide whether upholding a particular value will trump all other purposes of the alliance.


Hospitals should determine if they have consistent objectives with the other hospitals contemplating an alliance. Some hospitals may look to improve clinical services and clinical integration while others may be looking to improve capital access as part of a larger system. If one hospital’s goal is to survive in a competitive marketplace, is that objective consistent with another hospital’s goal to improve quality or to improve on value-based care? Being clear on the objectives from the outset of discussions and ensuring that all parties are working through common or consistent objectives allows parties to determine how closely to align with another hospital.


Each strategic alliance participant should evaluate if it will achieve its desired outcome through the alliance and determine how to measure the success of the alliance. For instance, a hospital may look at objective change in quality improvement measures, such as improved patient satisfaction ratings or improved statistics on a chronic disease such as diabetes. Other alliances may measure success through improved reimbursement for services or improved margins. The process to determine the desired outcome of the alliance as well as how to measure that outcome drives the nature of the alliance. How each hospital contributes to the outcome shapes the types of initiatives such as the desire to integrate clinical functions, e.g., pharmacy and laboratory services.

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