The biggest merger news in nonprofits around Puget Sound is….on television.

At the end of a recent episode of Grey's Anatomy the Chief of Surgery announced that Seattle Grace Hospital was merging with fictional counterpart Mercy West. The blame was put on the economy, saving television viewers from a mind-numbing recitation of the real woes facing nonprofit hospitals. 

Yet this fictional merger might be a good non-threatening example to surface some of the local discussion about collaborations, consolidations, and mergers.

What do we know about the situation facing these two hospitals, and is merger the right path or simply grasping at straws?

First, both appear to be teaching hospitals. That may indicate some alignment of mission and values. Although with names such as Mercy and Grace there may be larger institutional issues around values and mission.

Second, both are struggling with budget shortfalls. The question is how much can be saved with a merger and is it enough?

Health care, like most endeavors in the nonprofit sector, has some built in limits on the savings that can be realized through improved productivity. Michael Kaiser, director of the Kennedy Center, notes in his book, The Art of the Turnaround, how the arts run up against this limit. You can't turn every production into a one-person show just to increase the productivity of your arts program.

The same is true throughout the nonprofit sector. Counselors can only handle a certain caseload before you begin to sacrifice the value of face to face contact.

Even in areas that traditionally use a lot of volunteer hours have run up against the reality that volunteers aren't free; you need to recruit, train, and retain good volunteers and the cost of that runs up against real limits.

Indeed the most promising area for increased productivity are those back-office costs we often call overhead. In health care there is room for consolidation of billing, medical records (especially with the push for electronic medical records), and support services such as laundry, food preparation, and supply logistics.

Yet hospitals have long been on the cutting edge of finding ways to keep these costs down. So, our fictional Seattle Grace and Mercy West may not find many savings there. True, a highly paid administrator or two may be let go, but in the overall budget of a major city hospital, those savings won't go very far.

As with many mergers, the tough choices will come down to deciding what patient care services will be duplicated at both hospitals and which will be consolidated at one site or the other.

This point is where things become complex. Administrative consolidations usually raise internal conflicts. For example, the way supplies are ordered or the approval process for hiring. Staff may not enjoy the changes, they may rebel against some. Yet with these issues most of the answers lie within the organization.

But what happens when consolidation means that only one of the hospitals has an MRI machine now when the procedure had been available at both sites? In this context, merger issues become community issues.

More than just a community issue, a merger raises a question about community acceptance. Hospitals build constituencies, both through the people they directly serve and the communities that feel a part of them. Sometimes this feeling grows out of the services that a hospital chooses to embrace and foster. In real life Seattle we have hospitals known for their coronary care and others for their transplant services. While a merger would build on those strengths, some aspects of merger can detract from those strengths.

Finally, as the drama unfolds there will likely be many questions raised about the merger. Some will come from people who fear losing their jobs; others will come from those who find the changes daunting. The real question is who will be in favor of the merger in the long term? For whether the script writers pay attention to this detail or not, in real life mergers fail if they don't have champions. Key board members and key staff have to be for the merger, and they have to invest their time, talent, and influence or the merger will fail.

And unfortunately, all too often the failure of a merged organization is often the failure of the institutions involved. It's not like a divorce where each of the formerly married partners can go off to make a new life. Often when a merged organization fails it means that the very institutions that were involved go away.

If Grey's Anatomy followed real life more closely we may have seen Seattle Grace and Mercy West engage in some less threatening joint venture. Administrative consolidations or joint programming might produce similar savings, but with a lot less risk of time, energy, and community support.