Deciding to put an addition on your home can be very exciting. Perhaps you’ll finally have a garage or a larger master bedroom — or maybe even a second floor. But the larger the addition, the more complicated it gets. You have to consider how to integrate the new space with your existing home, and you also need to make sure you don’t take down a load-bearing wall or wreck the plumbing in the process.
This is a pretty accurate depiction of what it’s been like in the healthcare industry as providers build bigger and bigger “homes” by consolidating, merging or otherwise forming collaborative partnerships.
Mergers and acquisitions are an undeniable trend in the healthcare industry. In a recent survey, half of chief financial officers and other top executives from mostly middle-market healthcare companies said they plan to buy or merge with existing businesses in the next year.1
So why are healthcare providers making it a priority to become bigger — and how can you navigate this evolving environment?
The desire to consolidate is being driven by a pretty straightforward equation. On one side is the growing demand for services as patient populations age and need more care. These aging patients often have chronic conditions as well, which require ongoing and expensive interventions.
This is particularly true for patients with cardiovascular diseases. In addition to heart problems that may require lifelong management, many cardiovascular patients also have comorbid conditions such as diabetes or chronic obstructive pulmonary disease. There’s an expression in cardiology circles that “cardiovascular patients are lifetime patients.”
The other side of the equation is the changing financial landscape in healthcare. Reimbursements are becoming more elusive as CMS and payers move away from fee-for-service to pursue value-based care reimbursement models.
With growing patient numbers on one side of the equation and shrinking reimbursements on the other, economies of scale are crucial to help healthcare providers balance these opposing forces. By combining staff and services and obtaining a larger geographic footprint, providers can continue to provide high quality care while still meeting their bottom lines.
Strategies for successful mergers
Consolidation presents many challenges for an organization before it can reap any rewards. Mergers are hard. This can be especially true for specialty departments, which contain incredibly complex and varied modalities. Blending the workflows or services of cardiology departments, for example, is no easy task.
So how can organizations best tackle these challenges and make their consolidation experience a success? Here are some tactics to make the process easier for staff and patients alike.
- Integration should start right away. Leaders need to develop a plan that encompasses both big picture questions of integration, like the organizational culture and mission, and more technical steps for combining processes and best practices.
- Organizations need to not only set goals for a successful integration, but consider how to measure achievement of them by checking in with employees and opening the lines of communication to receive feedback or concerns.
- Management systems that deal with workforce and patient data should be consolidated where possible. Economies of scale cannot be achieved when disparate, siloed systems are operating within the organization. Redundant and confusing workflows lead to dissatisfaction with employees and inefficiencies that can ultimately affect patient care.
For physicians who encounter patient information and images, an enterprise-wide system can allow interoperability between different facilities and seamless communication between each patient’s various providers.
Download this new brief to learn how Watson Health cardiology imaging solutions can help physicians in merged or soon-to-merge organizations maintain efficient, accessible workflows that help both providers and patients.
1. Healthcare execs look to make deals in 2018. Modern Healthcare. December 2017.