Strategies for Handling IT in the Context of a Healthcare Consolidation
In the rapidly evolving landscape of healthcare, mergers and acquisitions have become a common occurrence, reaching record highs in recent years. According to a recent survey by Definitive Healthcare, industry consolidation is the top trend for 2019.
One of the primary motivations for these acquisitions is the pursuit of market share. A study by Deloitte and the Healthcare Financial Management Association has revealed this to be a key factor.
As two organizations merge, a standard project plan is essential. This plan should address people, processes, and technology, ensuring a smooth transition for both parties. A strategic vision should be formulated into operational objectives and a tactical roadmap during the planning process.
The merger or acquisition process can be complex, with the biggest objectives of each side not always aligned. Understanding this mountain of patient-related data, including data from imaging, labs, pharmacy, billing, and more, is critical. Creating a data map for both organizations, including data from various applications, is essential before the merger or acquisition.
Implementing a governance framework for data and IT is crucial during this process. This ensures that no disruption affects hospital employees and patients during the transition. Developing a map of current roles and responsibilities in each party's IT department is necessary for a successful merger or acquisition.
IT leaders representing both parties should be in close contact every step of the way. Honest discussions about what efforts will be needed to support the new organization now and in the future should take place.
In some cases, it can be abstracted to a layer independent of the system to be useful for multiple purposes. For those being acquired, greater access to capital - primarily for healthcare IT and facilities improvement - was cited as a top driver.
The merger of ELBLANDKLINIKEN and Fachkliniken Radeburg in Saxony, Germany, in 2018, formed one of the largest geriatric traumatology centers in Germany. While specific transaction revenues or average seller turnovers for health sector mergers that year are not detailed in the available data, the average revenue for sellers in hospital mergers and acquisitions deals in 2018 was $409 million.
Planning ahead and encouraging collaboration between teams can make even a complicated merger less stressful. Achieving desired outcomes can take about 24 months after a deal is inked. Careful review of each party's business impact analysis, business continuity and disaster recovery plan, and HIPAA security risk assessments is essential before the IT teams merge.
Healthcare IT is at the center of nearly all aspects of medicine and should be a focus during mergers and acquisitions. Putting IT needs at the center of the conversation ensures that no disruption affects hospital employees and patients during the merger or acquisition.
In conclusion, mergers and acquisitions in the healthcare sector require careful planning, collaboration, and a focus on IT integration to ensure a smooth transition and successful outcomes.
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