Speedy Integration To Build One

Transcription

1 After The Merger: How To Ensure A Speedy Integration To Build One Efficient Organization T h e O P E N M I N D S E x e c u t i v e L e a d e r s h i p R e t r e a t T h u r s d a y, S e p t e m b e r 2 0, : 0 0 p m 3:30pm K e n C a r r, S e n i o r A s s o c i a t e, O P E N M I N D S 15 Lincoln Square, Gettysburg, Pennsylvania info@openminds.com

2 Agenda I. Post Merger Risks & Guiding Principles For Successful Mergers II. Panel Discussion Craig Albers, RN, MSN, MBA, President & Chief Operation Officer, Mercy Health St. Charles Hospital Frank Baumann, Chief Operating Officer, BayMark Gary D. Nettis, Jr., Vice President, Corporate Development, Caregiver, Inc. III. Questions & Discussion 2

3 I. Post-Merger Risks & Guiding Principles For Successful Mergers 3

4 Merger & Acquisition Statistics Mergers and acquisitions are a growing strategy in health care to create scale resulting in greater market impact and profitability The volume of deals is growing 115 hospital and health system deals announced in 2017 a 13% increase over 2016 Aggregated deal volume over $63 in health systems deals in 2017 The competitive market is changing larger and stronger organizations 16 of the deals in 2017 involved organizations with over $500 million The average margin of acquiring organizations in the behavioral health market was 12.8% Investors see the value in behavioral health services 62% of behavioral health merger and acquisition activity was with private equity Addiction treatment is considered a fragmented market with $42 billion in revenue by

5 Risks Of The Merger & Acquisition Process Merger Risks Negotiations ultimately fail Merged organizations never achieve integration due to incompatibilities Cost savings ( merger synergies ) never materialize Leadership tensions impact operations and outcomes Community constituents have a negative reaction Reasons Why Mergers Fail Lack of knowledge about merger strategy, process & integration plans Failure to find the right partner Lack of time and funding allocated for due diligence and post-merger integration activities Viewing mergers as solutions to financial or leadership issues instead of growth and positioning strategy 5

6 Challenges: Post Merger Bigger & More Complex Missing Needed Talent Cultures Not Aligned Adjusting To Larger Scale Issues Missed In Due Diligence Synergies Not Achieved 6

7 The OPEN MINDS 10 Guiding Principles To Successful Mergers 1. Planning comes first Start with a plan to create strategic advantage and don t waste resources due to lack of purpose and focus. 6. Expect to give and get full disclosure Due diligence involves investigation and assessment and requires complete openness by all partners. 2. Be systematic and have a process Lay out the process and decision criteria in advance so you aren t distracted as issues arise. 7. Allow decision making to evolve Strategic plans need to be flexible as realities change be willing to do things differently and better 3. Use experienced talent Most organizations need additional knowledge and expertise to make sound decisions market intelligence, legal, finance, political ramification 8. Build in time for a competitive process Having multiple partner choices enhances to the quality of the final partner selection decision 4. Be deliberate in partner selection Have a planned, deliberate (not necessarily slow) process for finding potential partners 9. Design an implementation plan Ensure that there is an implementation plan that includes tactics, assigned responsibilities, and a budget 5. Be sure the priorities to all parties Make sure goals of all partners line up early in the process 10. Prepare for stakeholder questions Develop a communication plan to address questions and concerns from consumers, customers, referral sources, payers, regulators 7

8 Panel Disucssion 8

9 Panelist Questions 1. What characteristics should an organization look at to assess whether it is ready to enter into a successful merger? 2. A successful merger starts before the agreement is signed. What characteristics do you look for in organizations that can result in successful mergers? 3. What are the challenges and strategies for integrating two organizational cultures into one cohesive culture? 4. Can you describe some of the challenges of communicating with internal (board, staff, investors) and external stakeholders, and how to improve the process? 5. How do you assess the leadership of an acquired or merged organization and whether to integrate that leadership into the new organization disruptions, and not just positive results for the two organizations? 7. What a are some revenue and expense synergies that merger opportunities create, and how to you ensure that those synergies are achieved? 8. Economies of scale and leveraged infrastructure are two goals of mergers. What are some strategies to ensure that a merger achieves these goals? 9. What role does IT infrastructure and EHRs play in creating a successful merger, and how do you address incompatibilities in the systems? 10. From your perspective, what is the most important factor in creating a successful merger, and why? 6. Mergers disrupt the current service market. How do you ensure that they result in positive market 9

10 Questions & Discussion 10

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