Intermountain Healthcare CEO Marc Harrison talks about SCL Health merger

Marc Harrison, president and CEO of Intermountain Healthcare

Marc Harrison, the CEO of Intermountain Healthcare, said the merger with SCL Health came at just the right time.

Earlier this month, Intermountain and SCL Health, based in Colorado, completed the merger of the two organizations. Intermountain, based in Utah, now operates 33 hospitals, making it the 11th largest nonprofit hospital system in the United States.

In an interview with Chief Healthcare Executive, Harrison explained why he thinks the merger will work for patients and staff and he outlined his goals moving forward.

“SCL Health and Intermountain are well-matched for one another: Commitment to value, commitment to affordability, commitment to clinical excellence,” Harrison said. “We share many of the same values.”

When Intermountain and SCL Health began discussing the merger, he said SCL Health was interested in seeing their charity clinics before checking out their surgical facilities.

“This was more than symbolic,” Harrison said. “They were confident we were very good at acute care medicine.”

“So many people talk about commitment to the community without actually delivering it. What they really wanted to see was whether our audio and video matched, and of course it does.”

When asked to describe the ultimate goal of the merger, Harrison said, “To spread high quality care that people can afford and is oriented to keeping people well, further and further across the United States.” (The story continues after the video.)

The Intermountain-SCL Health merger comes at a time when hospital mergers have slowed down, largely due to the COVID-19 pandemic.

Only a few mergers have taken place so far this year. The number of hospital mergers in 2021 fell to a 10-year low, Kaufman Hall reported. Analysts still expect an uptick in merger activity in the next year or two, particularly as smaller hospitals or systems may need to find partners to stay afloat.

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During his leadership of Intermountain, the system has expanded its footprint considerably, and the merger with SCL Health is the latest step. Once focused on delivering care to the state of Utah, Intermountain now also operates hospitals or clinics in Colorado, Idaho, Kansas, Montana, and Nevada.

Harrison spoke enthusiastically about integrating the two systems and expanding their ability to provide care, particularly in rural areas.

“There is always something to learn from a great partner,” Harrison said. “We are deeply committed to rural health, and we think the legacy Intermountain footprint does it very, very well. SCL does it really well too, particularly in rural Montana. And we’re eager to learn from them and to augment what they’re currently doing with telehealth and digital assets that we think keeps people close to home and keeps costs down.”

A pledge to control costs

Hospital system mergers tend to generate scrutiny due to the potential for healthcare costs to rise in markets where there is less competition. The Medicare Payment Advisory Commission reported to Congress in 2020 that hospital consolidations often lead to higher prices. A Robert Wood Johnson Foundation study found a similar correlation between consolidations and higher costs for patients.

In an executive order to promote competition in the private sector issued last year, President Joe Biden directed the Federal Trade Commission and the Justice Department to enforce antitrust law vigorously. The White House specifically directed federal authorities to pay close attention to the healthcare market, including hospital consolidation.

While noting the inflationary pressures affecting all segments of the economy, Harrison said the Intermountain-SCL Health merger won’t lead to higher costs for patients.

“‘Given that our footprints didn’t overlap, Intermountain’s move into the markets that SCL Health has been in is not a decrease in competition at all,” Harrison said. “In fact, we may increase competition with our historic success in keeping costs down.”

“The number of competitors stays the same and that’s good, it's really good,” he added.

Harrison said Intermountain is working to accelerate the integration of the systems, which include everything from collaborating on clinical services to payroll.

“The biggest challenge is keeping up with our caregivers’ desires to fully integrate like tomorrow. Actually, yesterday would be better for many of them,” Harrison said.

“We have lots of people who are making friends with one another, particularly the clinicians who are starting to connect with each other.”

In the business world, mergers often lead to staff reductions. Harrison said he didn’t foresee cutting staff.

“Not in this market,” Harrison said. “We’re actually not looking for any reductions in force at all.”

“There’s so much work to do and this is a growth-oriented play. We hope not to lose anybody,” he said.

No new deals planned

Intermountain has built other partnerships with healthcare systems across the country. Last month, Intermountain joined with five other organizations to form the Evolve Health Alliance, an initiative to address staffing needs and exchange ideas to improve their operations. The other members include AdventHealth in Florida; Atrium Health of Charlotte, N.C.; Henry Ford Health System, Detroit, Mich.; Northwell Health in New York; and OhioHealth, Columbus, Ohio.

The members have touted the partnership as a way to solve human resources needs and to strengthen the institutions.

When asked if Intermountain could look at doing another type of merger with the other healthcare systems in the alliance, Harrison said there are no immediate plans.

“Right now our pipeline’s pretty full and we do not have any mega-mergers on the horizon,” Harrison said. “But we’ll look very carefully at our opportunities starting in the very short term.

“We have really clear guardrails primarily around the desire to deliver population health and affordable care, and we know that takes a long time for these opportunities to come to fruition. So in a very deliberate way, macroeconomics aside, we’re going to continue to make investments in Intermountain’s future.”

‘Clicks and mortar’

As Intermountain continues to grow, Harrison said digital technology and telehealth will be a big part of the plan.

“We talk about having a clicks-and-mortar footprint in the not-distant future,” Harrison said.

“In an environment where it’s increasingly expensive to deliver care, to be able to do so digitally without people needing to travel and burn the gas in the tanks of their trucks and cars, which is so expensive for them, and to be lighter on labor so it’s less expensive to create a visit, I think it’s going to be very important.”

“Just like other industries, we are preparing for that future,” he said.

Like some other hospital systems, Intermountain is also expanding its hospital-at-home program to deliver acute care to patients who would rather recover in their own bed.

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The home hospital program had been in development before the emergence of COVID-19, but the pandemic accelerated the plans.

Typically, dozens of Intermountain patients are getting hospital-level care at home, saving thousands of patient days and reducing some staff burdens.

Harrison, a cancer survivor, understands the appeal for patients to be home.

“As a person who has spent a fair amount of time in a hospital bed, there’s no place in the world that’s worse,” Harrison said with a laugh. “The fact that we can keep people at home with their families, it’s good for everybody.”

“Economically, it’s great, but clinically and then emotionally, those are the things I’m really concerned about,” he said. “If we take care of those things, the money will take care of itself.”