Hitting the Reset Button on Value After a Health System Merger

When Bon Secours and Mercy Health merged in 2018, leaders viewed the partnership as a strategic opportunity to advance value-based payment. Find out more from Guidehouse’s 2021 Clinical Integration Summit.

Watch On Demand

Bon Secours Mercy Health—created through the merger of Bon Secours Health System and Mercy Health—became one of the five largest Catholic health systems in the nation when the merger was finalized in 2018, with 50 hospitals, more than 1,200 sites of care, and about $10 billion in net operating revenue.

“We really viewed this merger as an opportunity to hit the reset button on value by leveraging our strengths as two large, very similar organizations,” said Erin Hurlburt, MD, chief medical officer of Population and Community Health at Bon Secours Mercy Health, during Guidehouse’s 2021 Clinical Integration Summit.

However, despite the organization’s advantages around quality of care, access to scale, and clinical data capture, the health system faced barriers in its efforts to move toward shared-risk models of payment.

“If the merger of two health systems isn’t a disruption to even the best-laid plans, I’m really not sure what is. And this was truly a merger of equals, not an acquisition,” Dr. Hurlburt said.


The health systems had more differences than similarities in some key areas. For example, prior to the merger, each organization made different investments in network and claims analytics. “We don't struggle with not having enough data—in fact, I think we have more than enough. But one thing we struggled with as we navigated the merger was figuring out how to turn data into actionable insights to drive our strategy,” she said.

“We had a lot of work to do, and I would not say that we did everything correctly,” Dr. Hurlburt said. Opportunities also existed to harmonize the metrics used to evaluate quality performance, strengthen efficiency, and align provider incentives with value-based contracts.

Bon Secours Mercy Health developed guiding principles to value that empowered the system to adopt a thoughtful, more agile network strategy.

Leaders chose to honor the unique culture and dynamics of each organization and market rather than force consistency strictly for consistency’s sake. “We did move more thoughtfully and continually toward alignment, where appropriate, but we didn't force integration or a change in a long-standing strategy if it really wasn't required,” Dr. Hurlburt said.

Next, leaders conducted a current-state assessment to uncover where investments in value-based payment models existed (total: 59 contracts), the types of arrangements that each organization had explored, and the markets where opportunities for value-based contracting was in effect.

“We found that interest in alternative payment models varied by market and by model—and frankly, our performance under those programs varied as well,” Dr. Hurlburt said. “We decided to create a readiness assessment that would pave the way for a more thoughtful progression toward shared risk, with a qualitative and quantitative review of our capabilities. But it’s not always fun to hold the mirror up and look at where we have strengths and where we have opportunities to be successful, especially as a newly merged organization.”

From there, leaders focused on four areas where team members could make a meaningful difference in value-based performance—patient engagement, clinical integration and performance, care and utilization management, and performance management, including aligning the newly integrated system’s governance and operating models. They also used data to inform decisions around where to invest in alternative payment models and how to customize their approach to the needs of the market.

“The disruption of the merger really encouraged us to thoughtfully re-evaluate our approaches to value—and that has allowed us to be more successful as we move forward,” Dr. Hurlburt said.

Today, Bon Secours Mercy Health demonstrates outstanding performance under alternative payment models, with 710,000 lives covered in multiple lines of business. Of these lives, 41% are in Medicare, 38% are in commercial payer arrangements, and 20% are in Medicaid (mostly managed Medicaid products). In 2020, the Mercy Health Select ACO ranked among the top 10 ACOs for shared savings, saving Medicare nearly $30 million.

Keys to Bon Secours Mercy Health’s success included:

1. Ramping up population health analytics capabilities.

“This was a big-ticket item for our population health team: the decision to invest quickly and heavily in our claims and EHR-based analytics and developing dashboards there to help us be data-informed,” Dr. Hurlburt said.

2. Centralizing population health management capabilities.

“One of the challenges that an integrated system like ours, serving multiple markets, faces is how to centralize population health capabilities and allow for customization according to the needs of the market—and that’s something Bon Secours Mercy Health struggled with as well,” Dr. Hurlburt said. “We have centralized a lot of these capabilities into a type of population health services organization model to ensure that all of our markets and their patients and providers would have a stable structure to be successful under alternative payment models.”

3. Keeping lines of communication open with payers.

“We engage our payer partners in constant conversations about our efforts to support their members, our patients, opportunities to do pilot programs with them, be innovative, collaborate, or offer some flexibilities in the contracts related to COVID-19,” Dr. Hurlburt said.

“The disruption of the merger really encouraged us to be thoughtful and re-evaluate our approaches to value—and I do think that it's allowed us to be more successful as we move forward,” she said.

Want to hear more about how Bon Secours Mercy Health created its agile clinical network strategy? Download the Guidehouse 2021 Clinical Integration Summit on demand.

About the Experts

Back to top