4 Steps to a Successful Integration Process

In order to be successful, a merger must be followed up with a detailed course of action. Here are several specific places where physician groups routinely stub their toes when merging. But, if you get them right, your success rate will soar.

  1. People

Mergers succeed or fail based on the quality and dedication of the people who execute them. Start with your leadership team. Determine the composition of the new management team as far ahead of time as possible. This helps mutually ensure physician owners that the integration process is beginning to unfold both smoothly and sensibly.  Then, identify those individuals (and occasionally teams) who are outside the leadership realm but still essential to retain. Develop specific strategies to keep them engaged during the transition.

Be proactive and make opportunities. If your strategic intent calls for headcount reductions, do not rely on “natural attrition.” That is just abdication in the name of kindheartedness. Similarly, even if reductions are not a big part of your plan, people expect them. Use the acquisition as a time to do a little constructive pruning if need be and consider the possibility of offering severance packages.

  1. Patients

Attention to patients should seem like a priority at all times, but it is particularly true during periods of change and uncertainty. Because mergers are times of great internally-focused thinking and activity, an outward focus on patients can suffer during this time. Competitors will seize any open opportunity to lure your patients away, and practice upheaval is one such door. They may spread misinformation and regale your key referring physicians with the dangers of your merger and the glory of their own practice. Do not let that happen.

Be proactive and convincing. Take the show on the road. All physicians must actively outreach and proactively engage referring physicians. Keep them in the loop with frequent communication. Walk them through what you are doing, if and how it will benefit them, and state clearly how they can get in contact with any questions or concerns throughout the process. In addition, provide physician liaisons clear language about what they can (and cannot) say to referring physician practices.

Keep referring physicians informed and make sure to spend time listening to their concerns. This might even be a good time to probe what they like and don’t like about your existing relationship or services you offer. If there is a weakness in their mind, it’s better to open that door proactively with an eye toward solving it in the integration/transition process than let a competitor open the door with an eye toward leveraging it.

  1. Culture

Culture is woven into the fabric of a workplace over time. That makes it difficult to see and even more difficult to change. The list of deals that have famously failed because of mismatched cultures is epic. The first, and perhaps most important, rule in dealing with culture during a post-merger integration is to compare the existing cultures and see how they will be combined. Do not downplay the culture as something that will work itself out. It won’t. Here are some questions to ask yourself:

  • How are decisions made within your practice, unilaterally at the top or based on data and recommendations from employees? Are they made on the spot or only after thorough consideration?
  • Is senior management dictatorial or consultative? Is junior management jaded or motivated?
  • Is innovation a catchy tagline or a true religion? (Ditto collaboration.)
  • Is success seen as a team effort or the result of a few star performers?
  • Is the practice’s technology investment driven more by opportunity or obsolescence?

The second rule in merging cultures is to know thyself. It is not possible to integrate two cultures based on an understanding of only one of them. Culture assessment should begin way before staring down the path of a merger—and well before the demands of a deal set in.

  1. Communication

In medical practice mergers, good communication is by far the simplest and cheapest way of reducing uncertainty and stress—two of the biggest causes of dysfunctional deals. Good communication can:

  • ease or shorten the inevitable periods of reduced productivity;
  • build trust with stakeholders;
  • prevent the loss of key staff, patients, and valued referring physicians;
  • clarify objectives and unify focus;
  • ensure preparedness for expected changes; and
  • preempt or deflate competitive rumors and disinformation.

Start by being up-front and direct about the rationale behind the deal. Don’t assume that its logic and benefits are self-evident to employees or others. To the greatest extent possible, have clear and concise answers to the one question at the top of everyone’s mind:

“All that sounds fine, but how will the merger affect me?”

Here are some hints and guidelines for how to proceed with compassion and respect:

  • Do not be an information cheapskate. Be open and transparent. Share more than you are comfortable sharing.
  • Communicate the extent to which the practices will be integrated and how that will affect employees’ jobs, benefits, reporting lines, information flows, and culture. If integration issues or actions have yet to be decided, be clear about an expected timeline for when they will be.
  • Tailor your communications to different audiences. However, make sure all your messages are consistent by tying them back to the overall strategic intent of the deal.
  • If there is no news to report, report that there is no news.
  • Manage expectations and mood. Listen for concerns and questions, then address them straight on.
  • As responsibility for communication trickles down the hierarchy, be very clear about what people should say and not say. “I don’t know, but I’ll find out” is always a better option than just winging it.
  • Identify and engage staffers who can exert positive influence over others. Conversely, if there is a person or group who proves to be the source of recurring rumors or discontent, resolve their issue or get rid of them.
  • Do not hide or shy away from bad news. Identify problems as they occur and seek to rectify them.
  • Do what you say you will do. Nothing crushes morale and erodes productivity like a stream of empty promises.

The phases prior to a merger, e.g., strategic planning and due diligence, are indeed essential, but the integration that occurs post-merger is by far more important to the deal’s overall success—or failure.

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Contact ABISA for healthcare consultancy support or speaking engagements.

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Getting Your Practice Back

As the owner of a physician practice, you work hard and sacrifice a great deal of time to make your business successful.  As the practice grows, so does your workload. You start on the front lines driving clinical treatments and referrals, then move to the back office supervising daily operational tasks, often obligatory, just to keep the practice afloat. You know you’re needed to keep the business running, but you want to make sure it continues to operate efficiently if you aren’t around. Here are four things you can do replace yourself in your practice and bring back some time to yourself:

Delegate Responsibilities

Responsibilities can really weigh you down as they become more detailed and more time consuming. When responsibilities start to detract from the things you love, it’s probably time to consider delegating some of those responsibilities. Being a successful leader means learning to prioritize your duties and assign those tasks to someone who you can trust to perform well.  Be aware that finding the right individuals to delegate responsibilities to can be time consuming. You need to be sure whoever is assuming those duties can perform at your own level of expertise. If you have a management team in place, reach out to your best employees and teach them how to do the tasks that take up a lot of your time. Alternatively, or in addition to training staff, considering finding a partner who can complement your business.

Outsource Help

Some tasks may be better completed by outsourcing rather than hiring and training new employees. Back office assignments, such as billing and collections, can be sourced out if you aren’t in need of full-time help. It is more important to free up your time for those heavyweight projects. If your time is spent on resubmitting denied claims rather than long-term planning, you could miss out on taking your practice to the next level of its potential.  Keep in mind if you choose this route that it can get costly, especially if a lot of duties are being replaced by outsourcing. Additionally, quality is a concern to consider as well if you choose this route. Will the quality be to your standard and will your practice be a priority for the vendor like it is for you?

Consider Bringing on a Partner

Perhaps you want to take a bigger step back than just simply passing off some tasks to someone else. You want to grow your practice, but you don’t want to do it alone. You can see the bigger picture, and you know a partner is necessary.  A physician partner can help you get to the next level by bringing a complimentary skill set to the table. Having a physician partner will allow you to spend more time doing the things you love outside the practice and focus on the things you have a passion for within the practice. A good physician partner will want to see the practice succeed because of the synergistic elements you two bring to the practice. If you do decide to add a physician partner, there are many things to consider, which I have addressed in previous articles.

Consider a Gradual Complete Exit

Maybe your aim is to retire completely from your practice. Maybe you love your practice, but you’re drained and need to get out or move on. Maybe your priorities in life have shifted but you don’t have a way to step back. This is the road to succession planning. A new owner could be your best bet. Whether that’s a physician partner or another acquiring entity, you can work to create a transitional period after the sale. Your practice is a financial investment for some buyers, so you if you can illustrate the value your employees bring to your business, you can advocate for their continued employment. After all, if you are going to leave your practice, you want to make sure you leave your employees in a good atmosphere. When it’s time to replace yourself, it’s important that you provide a secure environment for those you leave behind. Additionally, a gradual transition out of your practice will give everyone who works with you a chance to get used to the changes, and it will retain their respect for you.

Planning ahead allows you to focus on the best fit for the practice, first and foremost. Once you find the best fit that will respect the legacy of the practice and your employees, then it is very likely you will also find the greatest value.

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Contact ABISA for healthcare consultancy support or speaking engagements.

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