Deals involving healthcare services made up the bulk of M&A activity in 2015, but structuring and executing a transaction is only the tip of the iceberg. Once the ink dries and an affiliation, merger or acquisition is complete, the real work begins: operational change management.
A clear-eyed vision of what synergies will be realized in the first 90 to 180 days post-merger is a necessity, as one CFO said. Unfortunately, for many executive teams, the vision soon grows foggy. In a survey of hospital and health system leaders conducted by Becker's Hospital Review, 41 percent said they have made poor progress toward post-M&A operational efficiency, hardly realizing the economies they planned for when structuring the deal. "I think what you'll find is it's not as easy as you thought," one CFO told Becker's.
This e-book, based on survey responses from financial executives and a roundtable discussion with five hospital and health system CFOs and a healthcare finance expert, highlights the challenges and best practices around operational change management after a merger, acquisition or affiliation. CFOs touch on real-life lessons learned after acquiring or affiliating with other hospitals and health systems, including insight as to what types of plans they enact the day a deal closes, how they weigh decisions about right-sizing and how they define being a good partner.
41% of CFOs say they have made poor progress toward post-M&A operational efficiency, hardly realizing the economies planned for when the deal was structured
37% of CFOs have not consolidated or eliminated staff after merging, and they have no plans to do so within the year.
30% say their organizations did eliminate staff, but no further staffing changes are expected this year.
60% say CEOs and CFOs are most involved in driving operational efficiencies after a merger.
More than half (52%) of CFOs say their deal did not require a change in EHR.
29% say EHR change was necessary.
15% say EHR change was actually a prime driver for their partner choosing them or vice versa.
- In a survey of hospital leaders, 41 percent said they have made poor progress toward post-M&A operational efficiency
- Chaotic post-M&A environments can distract leaders with operational crises and limit their planning for new growth opportunities
- CFOs share lessons learned about operational change management and post-M&A integration