Due to the high level of consolidation in the healthcare industry, the amount of hospital closures has increased. Although some hospitals have closed due to bankruptcy and financial issues, some hospitals close because the healthcare services are transferred to another facility. A health system may consolidate services to increase efficiency and reduce unnecessary healthcare costs. Regardless of the reason, the closing of a hospital — often a long-standing symbol in a community — can be hard for employees, physicians and community members to accept. They may pushback on the deal. According to Doug Fenstermaker, managing director and vice president of healthcare for Warbird Consulting Partners and former CFO of HealthEast Care System in St. Paul, Minn., when an executive team closes a hospital, they need to prepare employees and even community members for a "grieving" process: denial, anger, bargaining, depression and acceptance.
Why employees, community members need to grieve
As CFO of HealthEast, Mr. Fenstermaker participated in closing four hospitals in the 1990s. "I observed that when [a hospital closes], it is like a death in the family. [The community and employees] go through a grieving process. Initially, there is denial, then anger and striking back about the process. Then, they begin to try to bargain and some even become depressed about [the deal] before there is finally acceptance," says Mr. Fenstermaker.
A community hospital is an important institution to a community and often becomes part of the community fabric. Many community members and employees have relationships with the hospital and each other due to a variety of memories going back generations. "A community hospital is where children and children's children are born and where many say goodbye to loved ones — those emotional bonds are strong," says Mr. Fenstermaker. During a closing, the bonds that a community, employees and physicians have with the hospital are jeopardized and the process of change can become difficult for everyone involved.
How to handle the grieving process
Preparing employees and the community for a "grieving" process requires planning and a proactive set of sequential activities both inside the organization and outside in the community, which many executives may neglect. However, when constituents are not prepped for the changes, the process can become more difficult than anticipated. Here, Mr. Fenstermarker discusses how to handle the grieving period to conduct a smooth and successful process.
1. Engage chaplaincy to prepare employees. According to Mr. Fenstermaker, engaging the hospital chaplain to help employees manage the news of a hospital sale is important. "We engaged the chaplaincy the second, third and fourth time we went through a sale. This prepared our employees for the change much better. It didn't necessarily eliminate the grieving period, but we had a much better infrastructure that helped to handle it," says Mr. Fenstermaker. The chaplain can help hospital executives and administrators in a variety of ways, but most likely, his presence and availability will be reassuring to hospital employees. The chaplain can attend meetings with the employees or merely be present when management is announcing the closing because a chaplain is accustomed to helping individuals navigate major and unexpected changes. "The chaplain has a high level of trust, which is a critical issue. He was better able to communicate with employees and take them through the grieving process," says Mr. Fenstermaker.
2. Prepare answers for possible questions. Hospital executives should prepare for potential questions employees and physicians may have so that when the hospital closing is announced, they can ease concerns almost immediately. "The second time around [HealthEast executives] spent more time thinking of answers to questions that employees were going to ask. The initial trauma of knowing that a place of business is going to close down is hard on individuals. The only way around that is to have them say — okay, I accept this as a reality. What do I need to know? What will the future be like?" says Mr. Fenstermaker. He recommends preparing information on outplacement services, severance packages and other mechanisms for employee transitions.
3. Be open and honest. "Communication is key. Executives should be as open and honest with the employees and the community as they can," says Mr. Fenstermarker. The community is a very important audience for hospital closings, and Mr. Fenstermaker recommends a few techniques:
• Use the board of directors to guide the communication approach.
• Plan community meetings to speak with the community on the process and hear their concerns.
• Inform city officials so they understand the decision and the process.
4. Carefully manage media relations. Hospital executives need to have a well laid out plan for informing the press about the hospital transaction so they do not find out by accident. "The hospital's closing needs to remain confidential until [the executives] are ready to announce. It is an art to plan the communication simultaneously with the transaction. You need to tell press at exactly the same time that the community is told otherwise you risk looking as if you were or are hiding something," says Mr. Fenstermaker.
5. Don't forget about the physical facility. While it is easy to focus on the hospital's closing and managing the reaction, hospital executives cannot forget about the physical facility of the hospital when they are closing it. The hospital is an asset and the future of the facility will be a point of contention for the community. "It is not a good idea to leave a big physical plant shut down and boarded up. It could have a negative impact on the local economics of the community. Hospitals are magnets for growth — housing and schools go up around them, but the reverse can also be true," says Mr. Fenstermaker. He recommends thinking creatively about the facility's future and how it may be converted. When HealthEast closed a few hospitals the executive team thought about the facility before the transaction was complete. "The press wants to know about what you are doing with the giant building. The community does not want it boarded up and abandoned," says Mr. Fenstermaker. The future use for a hospital building could include the following:
• Donate the building to a university;
• Convert it to a multilevel senior care facility;
• Sell the land to a developer; and
• Convert it to the health system's corporate headquarters.
"You can win a lot of points if you do things that are good for the community with the physical plant," says Mr. Fenstermaker.
A hospital, especially a community hospital, can be an important symbol in a community. When the hospital closes, the transition may be difficult for not only the employees and physicians, but the community members as well. Hospital executives need to expect that a grieving period is likely. In order to manage the process and complete a smooth transaction, executives should prepare with the above mentioned points so any grieving or push-back does not jeopardize the transaction.
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Why employees, community members need to grieve
As CFO of HealthEast, Mr. Fenstermaker participated in closing four hospitals in the 1990s. "I observed that when [a hospital closes], it is like a death in the family. [The community and employees] go through a grieving process. Initially, there is denial, then anger and striking back about the process. Then, they begin to try to bargain and some even become depressed about [the deal] before there is finally acceptance," says Mr. Fenstermaker.
A community hospital is an important institution to a community and often becomes part of the community fabric. Many community members and employees have relationships with the hospital and each other due to a variety of memories going back generations. "A community hospital is where children and children's children are born and where many say goodbye to loved ones — those emotional bonds are strong," says Mr. Fenstermaker. During a closing, the bonds that a community, employees and physicians have with the hospital are jeopardized and the process of change can become difficult for everyone involved.
How to handle the grieving process
Preparing employees and the community for a "grieving" process requires planning and a proactive set of sequential activities both inside the organization and outside in the community, which many executives may neglect. However, when constituents are not prepped for the changes, the process can become more difficult than anticipated. Here, Mr. Fenstermarker discusses how to handle the grieving period to conduct a smooth and successful process.
1. Engage chaplaincy to prepare employees. According to Mr. Fenstermaker, engaging the hospital chaplain to help employees manage the news of a hospital sale is important. "We engaged the chaplaincy the second, third and fourth time we went through a sale. This prepared our employees for the change much better. It didn't necessarily eliminate the grieving period, but we had a much better infrastructure that helped to handle it," says Mr. Fenstermaker. The chaplain can help hospital executives and administrators in a variety of ways, but most likely, his presence and availability will be reassuring to hospital employees. The chaplain can attend meetings with the employees or merely be present when management is announcing the closing because a chaplain is accustomed to helping individuals navigate major and unexpected changes. "The chaplain has a high level of trust, which is a critical issue. He was better able to communicate with employees and take them through the grieving process," says Mr. Fenstermaker.
2. Prepare answers for possible questions. Hospital executives should prepare for potential questions employees and physicians may have so that when the hospital closing is announced, they can ease concerns almost immediately. "The second time around [HealthEast executives] spent more time thinking of answers to questions that employees were going to ask. The initial trauma of knowing that a place of business is going to close down is hard on individuals. The only way around that is to have them say — okay, I accept this as a reality. What do I need to know? What will the future be like?" says Mr. Fenstermaker. He recommends preparing information on outplacement services, severance packages and other mechanisms for employee transitions.
3. Be open and honest. "Communication is key. Executives should be as open and honest with the employees and the community as they can," says Mr. Fenstermarker. The community is a very important audience for hospital closings, and Mr. Fenstermaker recommends a few techniques:
• Use the board of directors to guide the communication approach.
• Plan community meetings to speak with the community on the process and hear their concerns.
• Inform city officials so they understand the decision and the process.
4. Carefully manage media relations. Hospital executives need to have a well laid out plan for informing the press about the hospital transaction so they do not find out by accident. "The hospital's closing needs to remain confidential until [the executives] are ready to announce. It is an art to plan the communication simultaneously with the transaction. You need to tell press at exactly the same time that the community is told otherwise you risk looking as if you were or are hiding something," says Mr. Fenstermaker.
5. Don't forget about the physical facility. While it is easy to focus on the hospital's closing and managing the reaction, hospital executives cannot forget about the physical facility of the hospital when they are closing it. The hospital is an asset and the future of the facility will be a point of contention for the community. "It is not a good idea to leave a big physical plant shut down and boarded up. It could have a negative impact on the local economics of the community. Hospitals are magnets for growth — housing and schools go up around them, but the reverse can also be true," says Mr. Fenstermaker. He recommends thinking creatively about the facility's future and how it may be converted. When HealthEast closed a few hospitals the executive team thought about the facility before the transaction was complete. "The press wants to know about what you are doing with the giant building. The community does not want it boarded up and abandoned," says Mr. Fenstermaker. The future use for a hospital building could include the following:
• Donate the building to a university;
• Convert it to a multilevel senior care facility;
• Sell the land to a developer; and
• Convert it to the health system's corporate headquarters.
"You can win a lot of points if you do things that are good for the community with the physical plant," says Mr. Fenstermaker.
A hospital, especially a community hospital, can be an important symbol in a community. When the hospital closes, the transition may be difficult for not only the employees and physicians, but the community members as well. Hospital executives need to expect that a grieving period is likely. In order to manage the process and complete a smooth transaction, executives should prepare with the above mentioned points so any grieving or push-back does not jeopardize the transaction.
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LSU Hospital System May Close Hospitals as Result of Medicaid Cuts