Hospital mergers and acquisitions are expected to remain strong this year. This follows two years of data collected for Modern Healthcare’s 19th Annual Mergers & Acquisitions Report showing the number of hospital deals climbing more than 18% to 109 in 2012, up from 92 deals recorded in 2011.
In some cases, deals are driven by the need to financially seek economies of scale or to strategically capture a larger share of the market. But in all cases, beyond the financials and strategies, success requires managing the inter-related disciplines of Brand, Buy-In & Marketing to drive business performance.
Without proper planning, hospitals, healthcare systems and physician groups in the midst of transitioning through a merger or acquisition will always encounter:
• a brand that struggles to support the newly-formed organization’s purpose, values and goals
• a fractured internal audience that must be reiled on to deliver unified messages and experiences
• external marketing promises that might not sync with internal delivery
• inefficiencies resulting in sub-optimal return on marketing investment
At Trajectory, we’ve worked with multiple healthcare organizations through these transitions, and understand the unique challenges they face. Here’s a top ten list of issues to consider as your healthcare systems, hospitals and physician groups transition from pre-merger competitors to post-merger partners:
1. M&A brand team: created across your organizations to proactively act on and communicate leadership decisions and to navigate the range of tangibles and intangibles on the table, e.g. logistics, preparation, training.
2. Brand compatibility: short-term financial and market share strength will not overcome the need to develop aligned purpose, values and promises.
3. Portfolio strength: how will the merger or acquisition maximize your organizational, facilities and service line capabilities in terms of brand portfolio management?
4. Cultural fit: what’s the likelihood of integrating medical staff and employees, across all functions, on both sides of the M&A table. And whose culture leads?
5. Open communication: have you established feedback mechanisms (both offline and online) for both internal and external audiences.
6. Engagement: are your organization’s truly united. You don’t know, and can’t act upon, until you measure.
7. Market growth: how will the M&A guide your new entity towards achieving market reach and growth without hindering each organization’s key revenue generating, strategic and mission-driven service lines?
8. Marketing philosophy and approach: is marketing considered an investment or expense. Does it tend to be brand or service line-driven? Is it directed to physicians or patients? How will you align your two organizations?
9. Local community commitment: do your organizations have the same commitment to your local communities; does bigger now mean less touch in order to serve the health needs of the larger region?
10. From follower to leader: how will you adjust your approach from being the #2 or #3 player to becoming a stronger market share leader?