Most healthcare M&As don’t fail because the deal was bad. They fail because nobody planned what happens next.
If you’re a growing healthcare company trying to reach more patients, members, and providers, acquiring another org is one of the fastest ways to do it. But here’s what nobody tells you: the deal is the easy part. The integration is where things fall apart.
We’ve seen it over and over. It comes down to three things: Systems, Process, and People.
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Systems: One tech stack, one source of truth, no conflicting data.
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Process: One playbook so both orgs work the same way from day one.
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People: Clear roles and communication so nobody’s confused and nobody leaves.
Align these areas from the jump, and your integration will become natural growth fuel.
What does a successful merger or acquisition in healthcare look like?
By the close of the integration, everyone should have a clear understanding of where data lives, how work will get done, and who is responsible for each domain of the workplace. When you create this clarity around the business you get the following benefits:
- Visibility across the org
- Standardized ways of working
- Faster, accurate decisions
- Stronger team culture
What happens to systems during a merger or acquisition?
Most of the time, the systems are overlooked and cause chaos. You have different organizations trying to blend ways of working, and without careful orchestration, this results in duplication, overlap, and conflict.
The last thing a healthcare company needs is to be working in multiple EHRs, billing platforms, or reporting tools. This will lead to inaccuracies in data, team conflict, and overall inefficiency.
So, how should a healthcare company approach a system integration?
Go into this integration with a solid definition of what you want your tech stack to look like post-merger or post acq. The goal should be to consolidate. When you’re selecting which tools are going to land in the tool belt, you want to:
- Identify what will be your single source of truth for the hard hitting data (patient, provider, revenue data)
- Identify redundant tools and be relentless about consolidating
- Phase integration to promote adoption. If you try to do a hard cutover with all new systems all at once, you’re on a collision course.
Similar to a pilot landing a plane, you want clear direction and a controlled, careful transition.
What’s the biggest mistake companies make with systems during M&As?
They try to maintain every existing system between the companies. The intention here is good, because they just want to avoid disruption. But what this ends up doing is creating multiple layer of complexities that only grow harder to reverse as time goes on.
Why is process alignment critical for mergers & acquisitions?
Dovetailing off of the systems discussion, process is the written governance around how the systems will be used. AKA, how the work is actually going to be done. This is a big risk if overlooked. If everyone is executing work on their own terms, you end up with duplicate work, delays, errors, and more.
How do you standardize processes after a merger?
The goal should always be a single, standardized way of operating. Your employees will end up appreciating this because standardized processes reduce rework, conflict between teams, and relieve those one or two high performers that end up wearing all the hats.
- Map current state workflows for both orgs (time intensive, but very informative and valuable information to have)
- Gaps, inefficiencies, redundancies, and more will expose themselves
- With that data in hand, you can design your single, standardized way of operating
What processes should be prioritized first?
You’re probably overwhelmed just thinking about all the workflows you could map across orgs. Start with your highest impact and/or recurring work. Here’s what we typically see for healthcare orgs:
- Patient intake, scheduling
- Billing
- Provider onboarding
- Compliance and reporting
The other processes can evolve over time, focus on your hard hitters to start.
Why do people challenges impact M&A success so much?
The people are ultimately responsible for the success or failure of the integration. If they are confused about whose role is responsible for what, communication guardrails aren’t inplace, or leadership isn’t aligned, everything comes to a screeching halt. This is very common with mergers & acquisitions, and one of the reasons you see a spike in turnover shortly after the integration.
How can leaders align during integration?
The most important thing leaders can do is get clear on priorities, roles & responsibilities, and then have a rock solid (and consistent) communication plan for it.
What is the most effective way to reduce resistance to change?
Simply put, you have to reduce uncertainty. Humans are creatures of habit. Change isn’t particularly fun. Your teams probably aren’t going to be overjoyed at the thought of a merger. What helps this is creating as much clarity as possible. Help your people understand what is changing, why it matters, and how it will affect them.
Healthcare M&A in Action:
A rapidly growing healthcare org needed to integrate multiple entities while still maintaining their speed and service quality. They hired Tuck to assist. Our main focus was to simplify & align. Here’s how we did it:
- Centralized tools to create visibility and reduce fragmentation
- Creating standardized ways of working to ensure consistency and efficiency
- Focused on alignment within teams to foster strong execution
The results?
- Completed the onboarding of 35+ high priority practices during the engagement
- Developed plan for onboarding over 80 different locations
- Achieved 4.5 stars out of 5 satisfactory rating from the client
Closing
If you’re a healthcare organization embarking on a merger or acquisition prioritize alignment and simplification. Focus on the systems running the day-to-day, the processes informing the systems, and the people who make all of this happen. And if you need someone in your corner to ensure all goes well, give us a call.
