Mergers and acquisitions (M&As) have become the norm in our industry. Most health systems and hospitals have been, or will soon be, involved in an M&A as we move into the era of “super IDNs.” At the end of the day, none of us are going to stop this activity from occurring, so what can we do to be successful?
During a panel discussion at the 2017 Healthcare Supply Chain Summit entitled, “What provider supply chain executives should know about M&As: The Good, Bad and Ugly,” three seasoned experts in healthcare M&As shared their best practices and lessons learned -Nancy LeMaster, VP of Supply Chain Transformation at BJC HealthCare; John Berger Executive Director of Finance Shared Services at Piedmont Healthcare; and Karl Blomback, Corporate VP for Hackensack Meridian Health.
You have probably heard it said, “You had to be there,” meaning that the retelling of the story probably doesn’t do justice to the actual experience. There are many such instances at the GHX Supply Chain Summit where over 800 healthcare supply chain professionals gather each year for insightful and thought provoking presentations and conversations. So, while there are many experiences at the Summit that you have to “be there” for, here are some thoughts, ideas and statements heard at the 2017 Supply Chain Summit that pack a punch even in the retelling.
Is your business strategy based more on gut feeling or a commitment to forecasting, formulating sales plans and making decisions based on objective data points? If your business leans more toward the first category, there should be an urgency to move to a more data driven strategy. The role of big data to direct strategic decision making has been likened to the early adopters of computing, with forward thinking organizations seeing the biggest returns and the laggards spending years trying to catch up.
When it comes to payment options, the more choices the better right? Healthcare suppliers want to get paid fast, and healthcare providers want to take advantage of early pay discounts and rebates, and avoid late fees. So why not have a variety of payment methods in place: check, wire, credit card, Automated Clearing House (ACH), etc.?
But choice can add costs.
Managing business associate (BA) relationships in this era of change takes an ongoing approach. In fact, building a culture of compliance is the only way to make iterative improvements. So, does your organization demonstrate a culture of compliance through daily actions? Do you know the areas where the Office for Civil Rights (OCR) is putting the most emphasis? Does your organization understand the current definition of a business associate in the eyes of the OCR?
In healthcare we typically operate in silos, with the right hand blind to what the left hand is doing. Take for instance finance in both provider and supplier organizations. While accounting and accounts payable/collections might communicate regularly with treasury and engage in all-team meetings, their structures, business processes and policies are often disjointed. Without an integrated approach throughout its financial functions, an organization cannot fully assess its activities and identify opportunities for cost savings.