Return to Client Stories Index  


Muskoka Hospital Merger

Muskoka Algonquin Healthcare

Facilitating a Merger of Hospitals

The two Ontario cottage-country hospitals had the same number of beds, provided many similar services, competed for the same medical staff and were just 25 km apart.  For years, the South Muskoka Memorial Hospital in Bracebridge and Algonquin Health Services in Huntsville considered cooperating more closely, at least in acute care and purchasing.  But it was only in 2003 that the two institutions took formal steps to amalgamate after a growing realization that a single regional health care operation could better serve the area.  At the same time, mounting government pressure to rationalize health care delivery throughout the province spurred the consolidation talks.


A year later, Bay Consulting Group won the competition to facilitate the merger.  In the end, Bay Consulting helped the two hospital boards create a more efficient structure, now known as Muskoka-East Parry Sound Health Services.  Recalls Vaughn Adamson, Algonquin CEO at the time: “Bay Consulting, with Drew Huffman, was the transformation piece.  This merger had been thought about, talked about and dabbled about for many years, and no two boards could do it until we made it happen with Drew.”

Bay Consulting beat out three other short-listed consultants with health care experience because of Drew’s “manner of working,” according to Gayle Mackay, Algonquin’s volunteer vice-chair at the time and now a health care consultant.  “He was assertive, but not aggressive, with a clear sense of the necessary steps to achieve the merger within a reasonable time frame.”

Adds Adamson: “The other consultants had their own templates that they wanted us to fit into, while Drew emphasized that we would develop our own plan to suit our purposes.”  Helping the parties take ownership of their solutions is a hallmark of Bay Consulting’s facilitative approach.


Within days of getting the contract, Drew met the boards of the two organizations at a weekend retreat and bluntly asked them what they hoped to achieve by joining forces.  “When you look forward a decade,” he challenged them, “what do you want to see?”  The answers, such as always put the patients first, provided a rationale for the merger which helped sell the plan to stakeholders.

Drew helped the boards to establish a joint governance steering committee containing all the key players from each facility: the board chairs, CEOs, medical chiefs of staff, among others.  He drove the merger process, developing an implementation road map and keeping the players on track.  For six months, he met with the steering committee once every two weeks, insisting it make decisions on a consensus basis to ensure a lasting agreement.


Consensus decision-making is one of the “rules of the game” Drew helped the steering committee develop to set the tone for the two different, and sometimes opposing, institutional cultures working together for their common goal.  Another rule of the game required face-to-face communication instead of emails for debate, discussion or clarification.  Such direct communication fostered cooperative problem-solving and team-building, essential to achieving the merger.  Another important rule reminded the parties to focus on the greater good as opposed to individual desires. “There are no sacred moose,” reads Rule No. 4.

Vaughan Adamson says the rules of the game kept the inevitable conflicts from escalating and the group on a positive track.  Adds Gayle Mackay: “He did not shy away from difficulties. He was tough on the issues, but soft on the people.”

Bay Consulting brought considerable direct experience to the Muskoka-East Parry Sound amalgamation.  It had worked on nearly a dozen similar ventures including helping Bloorview Children’s Hospital and the Hugh MacMillan Rehabilitation Centre join forces to create what is now known as Bloorview Kids Rehab.  From other mergers, Bay Consulting learned that measuring success must include the stability of the new organization after the fact.  Does the new entity function efficiently?  Will the merger last?


Sensitive to these issues, Drew stressed accountability in the new Muskoka-East Parry Sound governance structure.  Even though the steering committee had a full plate in creating the merger, he persuaded it to adopt a unique governance measure whereby the new board had to report to the former board members of the two founding institutions.  For at least the first three years of its existence, the new hospital board must demonstrate progress towards achieving the steering committee’s objectives, both in terms of formal amalgamation and patient care.

Drew also worked assiduously with the steering committee to select Muskoka-East Parry Sound’s first board of directors, ensuring a wide range of relevant experience and that all communities in the catchment area were represented—without a potentially restrictive requirement that each town or region be entitled to a certain number of members.

The post-merger step of establishing a new board that could be trusted by both original boards was critical to the merger’s lasting success.  And it was another example of how an outside consultant can provide added value.  “Drew had all the answers,” says Vaughan, “but he has a knack of helping the group come up with their own version, quietly drawing out a worthwhile solution.”


She adds: “The nature of a merger is that people have to give up something to create something new.  Drew kept us focused on the positives and our mission.  In the end, we came up with our own solutions.  It was arduous and more painful than him giving us the answers.  But we took ownership, and the results should last.”