In pursuit of gaining competitive advantage, the health and human service field is in an era of a record numbers of mergers, acquisitions, and collaborations (see U.S. Health Services Mergers & Acquisitions Reach $36.5 Billion In Third-Quarter 2014, Up 5.7% Over 2013). There are many reasons for these mergers, which we have covered in previous issues – Should Your Organization Explore Mergers & Acquisitions? and Why The Mergers? – but gaining economies of scale and the ability to participate in performance-based and risk-based contracting are top strategic drivers for new combinations of organizations.
To assure that organizational performance is providing the planned economies of scale, executives need integrated real time data across the organization. To participate in any type of value-based purchasing arrangement, longitudinal consumer data for health status indicators, services across the organization (and beyond), and service costs is critical. But all too often, when I talk to executives, the reality on the ground is that data systems are not integrated, and they don’t have the information needed for optimized performance and managing non-fee-for-service reimbursement arrangements.
If your organization is in this situation – or are looking at a merger, an acquisition, or a new collaborative partnership, give some thought to how your team is going to create a seamless platform for these analytics. I like the “back to basics” approach in the FierceHealthIT eBook, Health IT System Integration and Interoperability: Challenges and Solutions.
Start with the strategic plan for the collaboration – Understanding the drivers and the priorities of the collaboration is the most critical first step. If it’s managing risk-based contracts, interoperability of consumer data is mission critical. If it’s financial margins, the tech strategy probably needs to start with revenue cycle management. Technology should be viewed as a tool and a tactic in strategy.
Understand the “new” organizational culture – In the new organizational relationship, understanding the new map of accountabilities, new budget and revenue responsibilities, and decision making authority is critical. Are decisions made centrally? Is management responsibility decentralized in a strategic business unit model? The new plan for accountability will shape the culture and how tech strategies are operationalized.
Develop a detailed technology work plan – Once strategic priorities are set and the rules of the road for decisionmaking are clear, a detailed work plan is critical. Understanding timelines, resource needs, budget timing, and team responsibilities is necessary to make an integrated technology platform and reporting system a reality.
Mergers and acquisitions have a high mortality rate – between 50% and 80% (see Why Do So Many Mergers Fail?). The inability to prioritize strategic initiatives and agree on accountability and decisionmaking are fundamental issues in the success of collaborations. Lack of a specific plan for technology is a symptom of those problems.
To read up on some of the most recent mergers and collaborations in the field, check out these highlights from our recent coverage:
- Two Illinois Social Services Organizations Merge
- Trinity Health To Acquire Three-Hospital System In Connecticut
- Health Choice Preferred And Phoenix Children’s Care Network Partner To Coordinate Patient Care And Improve Outcomes
- Easter Seals Central Texas & Vaughn House Merge
- MDLIVE Acquires Breakthrough Behavioral In Telehealth Merger
- Kaiser Expands Retail Clinic Services To Four Southern California Target Stores
- New Jersey’s Inspira Partners With RowanSOM For Behavioral Health Care
- Humana & HealthCare Partners Nevada Launch Accountable Care Agreement In Nevada
- Partners HealthCare, MedSpring Urgent Care Announce Partnership To Open Clinics In Eastern Massachusetts
- DaVita, Centura Health Form Partnership For Patient Care
- Kindred Announces Definitive Agreement To Acquire Centerre Healthcare
- Two Siouxland Organizations To Collaborate On New Behavioral Health Initiative In Iowa
- Starr Commonwealth & Sequel Youth & Family Create Partnership For Management Of Residential Treatment
- Humana Engages In New ACO Deal With Valence Health
- SBH Health System And The NYC Health And Hospitals Corporation Announce Collaboration To Support Health Care Transformation In The Bronx
- Rhode Island’s MinuteClinic And Lifespan Agree To Clinical Collaboration
- US Community Behavioral Acquires Integrated Development Services
And, for even more, join me and my colleague Howard Shiffman on February 12 at the 2015 OPEN MINDS Performance Management Institute for our case study presentation, Partnerships, Collaborations, & Mergers: Opportunities To Gain Economies Of Scale & Competitive Edge In A Changing Children’s Service Market.