Connecting the Dots – Integrating Health Systems Post-Acquisition/Merger

Hospital and health system consolidations have been on the rise. The most recent statistics available indicated that there were 90 deals targeting 156 hospitals in 2011, according to “The Health Care Services Acquisition Report”, 18th Edition, by Irving Levin Associates. When the statistics for 2012 are finally tallied, an even higher number is expected.

This surge in consolidation is partially driven by provider responses to both the challenges and opportunities created by national and state healthcare reform. But mergers and consolidation also bring complex business considerations. If you add state and federal laws that can further complicate a transaction, healthcare leaders can find themselves facing even more potential obstacles.

In the fall, MedSpeed conducted a roundtable discussion with forward thinking supply chain executives from industry-leading healthcare organizations. As I reported in a previous post, rapid growth (through acquisitions and strategic partnerships) was one of the hottest topics of conversation. That was top of mind for me when I read a recent article, in Becker’s Hospital Review that provided a list of 20 Best Practices for Healthcare Mergers & Acquisitions. Clearly all of us in healthcare need to consider best M&A practices, because nearly all of us are affected by consolidation. As the Becker’s Hospital Review article notes, “the ultimate goal is to accomplish strategic objectives as well as reach a financially stronger position post-transaction.”

I was particularly struck by #18, which urged an organization to “Design an Integration Strategy” once due diligence was completed. It was the word “integration” that really resonated with me.

As the reach of individual healthcare systems continues to grow, connecting all of a system’s facilities/entities becomes more and more challenging and can create many headaches. Healthcare transportation, which literally touches nearly every area of a hospital, can play a pivotal role—if it’s done well—in helping disparate organizations successfully merge into a singular operating system.

Scott McLaughlin from Memorial Hermann Healthcare said it even better than I can in our recent roundtable discussion: “I’m going to go way out there and I’m going to tell you that I think transportation is probably one of the biggest, if not the only, things that ties every single facet of the hospital together.”

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