Giving full consideration to medical technology during health system mergers and acquisitions

Mergers and acquisitions in the healthcare industry go far beyond the change of hands of ownership and putting up new signs on the buildings. They involve aligning healthcare professionals and clinicians and meeting the patient care models and financial outcomes required to the equipment, technology and overall service offerings of the older health system with the vision and goals of the new. 

There’s a unique balance to strike in the early stages of an acquisition. On one hand, quality care must be a priority as clinicians continue to treat patients, but of course, the strategic vision should focus on the long-term path that the health system is on. In light of the population around them, their goals as a provider, and their current assets and offers, the new health system needs to take a long, hard look and ask, “What is it we want to become?” 

A big part of the answer to that question lies in accurately assessing the existing system—highlighting the current staff, technology, equipment, and financial performance—and how it can be leveraged strategically to move towards an ideal future.

Figuring out the financials

In any acquisition, it’s important to open the books early in the process and see what the financial situation is, specifically regarding the healthcare equipment. There are likely financing plans on higher value equipment and some equipment may have service agreements or “software as a service” (SAAS) programs that need to be addressed. 

This review step is often best conducted with the assistance of a financial partner pre-acquisition, but it’s essential in helping the healthcare system decision-maker fully understand where the financials will land when the acquisition is complete.

While financials are certainly not the whole story, it’s a good place to start to determine how the system is running and what the debts and investments will look like in the short and long term.

Assessing the staff

Staffing has been a critical issue for many health systems in recent years for several reasons. The industry-wide shortage of clinicians, biomedical engineers and IT professionals has put pressure on a lot of systems; however, in many cases, technology has been able to lessen the impact of staff shortages by enabling remote work or by helping increase the productivity of smaller teams.

Regarding remote work, one question to ask is which of your sites are now considered difficult to staff? For those sites, ask yourself if you can do something with technology and integration to ensure that you are adequately serving the patient population with a lesser headcount. 

Understanding the potential impact of technology and ensuring a cohesive unified transformation plan will help you determine where staff is best positioned post-merger.

Determining technology distribution

And speaking of technology, at this point in the assessment, it’s time to review all of the technology and resources being used by your organization. This can be a part of an even larger advanced asset management evaluation, where you look at the current and future needs of the population and see what tools you will need to serve them. 

Some questions you might ask are: Is there unused or minimally used equipment in some of the sites that can be redistributed? Are we looking to bring in new technology to be more competitive?

These answers hinge on the needs of the patient population, but financials and operations also factor in. For example, if you have multiple platforms and technologies in the merger, they’re going to need to communicate with each other across the new system. You’re then faced with the decision of investing in standardization to one technology or platform or making the decision from a financial perspective to keep them individually operating and employ an AI aggregate agent to correlate data for you. While standardization might be an ideal outcome in the long term, it may not be financially viable right away, and you may need to wait to find the right time to make a big switch and investment. In short, engage in a technology and platform shift for the right reasons, not just an attempt to make things easier. As the saying goes, “change management for the sake of change is a guaranteed disaster”.

As recently as five years ago, if you kept platforms separate, you’d have to find ways to translate the data manually. However, with recent advancements in scraper software, all your systems can feed data into one platform automatically.

Ultimately, your technology analysis should extend across the system. This includes department level technology,  patient management, infrastructures, CMMS systems, inventory management, PIC systems, pharmacy, billing and more. You’ll need to evaluate every one of those systems and determine what the focus is, what you do best, and how to align it all.

Setting up your supply chain for success

Supply chain, in this case, certainly includes the supplies that you need to run your clinical operation, but IT is a big component as well. The chief operating officer of a system should be reviewing both the supply chain and how you’re storing and protecting information.

What are the criteria for success for information securities, cyber practices and IT systems from a supply chain perspective? Are you going to keep them all separate, or are you going to have a unified approach in terms of making sure that they all have the same standards?

Keeping entitlement to care top of mind

While healthcare decision-makers like you are looking to the future, clinicians are still working hard each day to take care of their patients. Therein lies the unique balance of long-term planning and short-term stability.

If you’re opening a new facility that is starting from square one, it’s a bit easier to get clinicians ready for when care launches because you’re not juggling day-to-day patient care with forecasting and training. To upskill appropriately, there are training simulators that staff can use so that they’re prepared and trained for the new equipment.

In an existing system, it can be more of a “mixed bag” when it comes to a transition to different equipment or facilities as you are typically still delivering patient care during these transitions. It may require training days to understand the equipment and some of its quirks which stresses capacity throughput. But simulators are still available in these instances, and it ultimately depends a lot on the clinical leaders and what their entitlement of care is.

The entitlement of care is the intersection of this entire operational assessment, at least in the short term. How many patients are you able to care for now? What’s your capacity? What do clinicians need to do their jobs well? With this operational assessment, you can make some adjustments with equipment distribution and staffing and training to help make the transition smoother. A clinical and health system team may have a need to see 150 patients a day in a specific care area to keep pace with the population needs. But your systems, technology and staffing can only sustain at best 100 in current state. This is the apex of entitlement to care. What can your health system tangibly deliver vs. what you need it to do? 

In the long term, though, entitlement to care still drives much of the conversation. While financial sustainability is, of course, at the forefront, the aspirational question remains: Where do we want to be? What does our system want to be like when it “grows up”? Clinical care is a significant piece of that, and by assessing all aspects of your system upon acquisition, you can set your course for a brighter future.