Your SlideShare is downloading. ×
Overcoming the Obstacles to a Practice Merger
Overcoming the Obstacles to a Practice Merger
Overcoming the Obstacles to a Practice Merger
Overcoming the Obstacles to a Practice Merger
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Overcoming the Obstacles to a Practice Merger

1,064

Published on

Published in: Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,064
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. “Overcoming the Obstacles to a Successful Practice Merger”A. Desirable results of merging medical practices?Not specific to the formation of a single specialty or multi-specialty group: • Enhanced control of personal and professional destiny, • Opportunity for future income stabilization and growth, • Cost advantage of using technology for improved patient care and management, • Establishment of viable exit strategy for retirement, • Survival of practice over the long term, • Continuity of patient care upon departure of physicians, • Stronger presence in the marketplace for patients, • Protection of referral sources, • Opportunity to develop young physicians for future leadership roles, • Ability to create operational efficiencies from improved facilities, • Stronger capacity for engaging talented support staff, • Improved ability to compete in an environment of cost sensitivity, and • Improved practice financial performance.B. Key Obstacles to overcome if a Successful Merger is to be completed. A) Strategic Imperative B) Operational Economies C) Financial Viability D) Governance Guidance E) Culture IntegrationC. Five Key Strategies for Strengthening the Merger Result 1. Early and significant commitment of practice leadership. 2. Adopt early integration due diligence and planning activities. 3. Select integration leaders, manager and teams early in the process. 4. Develop successful cultural alignment and integration strategies. 5. Attend to human dimensions.D. Ten Merger “Best Practices” for Completing a Successful PracticeMerger 1. Develop Overall Strategy and Goals.
  • 2. The idea here is to create an environment that allows the potentialpartners to develop, often through “difficult dialogue”, a mutually generatedimperative for completing a practice merger. In essence, the rational for themerger is determined resulting in mutual agreement that the merger alignmentand integration should move forward. 2. Mutually appoint an Accountable Integration Manager. ►Many process obstacles may occur and need to be overcome,including: • Participants are not sure how to work their way through multiple issues and options, • Professional advisers (attorney and accountant) for the respective groups may be too busy or conflicted to help the parties reach the level of compromise needed to form a new group, • Limited ability to resolve sensitive issues that both parties feel strongly about, and • Neither party has someone with the time and knowledge to coordinate and facilitate the merger process. ►Answer is to jointly appoint a Merger Facilitator mutually acceptable toeach group with responsibility to function in the following roles: • Serve as an objective and impartial third party who can represent the interests and concerns of the newly merger group and can assist the merging parties reach reasonable solutions to conflicting interests. • Serve as a merger process, communication and coordination guide, • Serve as a technical adviser relative to possible solutions to key issues that need to be resolved, • Act as a facilitator to keep the merger process on track 3. Conduct thorough Strategic, Operational, Financial & Governance Due Diligence analysis of both practices. Opportunity for the interested merging practices to see if each party is apotential partner via identifying possible areas of compatibility, incompatibility,and synergy. ►Strategic ►Operational ►Financial ►Governance 4. Conduct a Cultural Due Diligence Analysis of both practices.Examples of seven characteristics of organizational culture that may be changed:
  • 3. • Individual autonomy – degree of responsibility, independence and opportunity for exercising institutive. • Structure – rules, bureaucracy and direct supervision used to oversee and control employee behavior. • Support – degree of assistance provided by managers to their subordinates. • Identification – degree to which members identify with the organization as a whole rather than with their particular work group or field of professional expertise. • Performance reward – degree to which reward allocations are based on employee performance criteria. • Conflict tolerance - degree of conflict present in relationships between peers and work groups as well as the willingness to be honest and open about differences. • Risk tolerance - degree to which employees are encouraged to be aggressive, innovative and risk seeking. 5. Agree to organizational design, structure, and governance early on. The new leadership team and key organizational issues of practicedesign, structure and governance should be agreed to as early in the mergerprocess as possible. 6. Create a Cultural Alignment and Integration Plan The Cultural Alignment and Integration Plan is intended to bring theculture of the merging practices together to define “how we do things” in the newpractice. The key objective is to develop and gain support and commitment tothe new practices vision, mission and values. Alignment of the physicians,physician leaders, administrators and support staff with the practice businessplan produces the maximum impact and permanence. 7. Create a One-Year Post-Close Position Statement complete with Success Metrics. • Establish 100-day bottom-line goals and focus new practice attention on achieving these desired results, • Develop a one-year post-merge vision, • Develop a comprehensive “key performance indicator” roadmap, • Establish specific success goals (strategic and financial) and track progress against goals 8. Use integration teams with members from both practices. Use integration teams with members from both practices as a bridge toget from the planning stage to actually going operational. Conduct a launch
  • 4. meeting to clarify team charter. Consider the integration team as a lever toshare cultural intelligence between the two practices. 9. Develop integration work plan complete with time lines, tasks and responsible person(s) for tracking progress toward completion. Success mergers require detailed action plans, financial measures,financial tracking and reporting, clear decision-making, and coordination acrosspractice functional areas continuing on after the new merged practice goesoperational. Once the merger has been completed, the focus should then shift totracking the strategic, operational, human resource, and practice value creationobjectives. Celebrate successes throughout the alignment and integration process. 10. Develop a strategic employee and marketplace communication strategy. 1. Increase the clarity 2. Diminish the uncertainty 3. Enhance the benefit 4. Diminish the effort.

×