IDN M&As and policy management integration

The changing healthcare landscape brought by the Affordable Care Act and other factors has recently stimulated considerable merger and acquisition (M&A) activity.

As IDNs and chains of hospitals come together, there is a clear need to address the issues of policy management in the very processes of the mergers as well as for the future of the newly formed entities.

Through observation and direct involvement in a number of such scenarios, it is apparent that careful attention to the management of policies, procedures, and protocols with an eye toward possible standardization is an absolutely essential component of successful M & As.

However, at the same time, multiple case studies indicate that no "one size fits all" solution exists for every M & A process. By considering a number of examples we can see that while some sort of modern policy management system usually seems necessary, a range of options exists as to how it might be deployed.

M&As make the need for policy management clear
The general need for a way to access policies and procedures on both sides of an M&A quickly becomes apparent very quickly during the process of a merger. Naturally, if redundancies exist, for instance, careful understanding of the terms by which adjustments have to be made on either side is required.

Consequently, the need for access to all of the significant documents, awareness of policies and protocols that they provide, and some form of standardization for the purposes of the merger itself is an immediate concern.

But in the midst of this process, it often becomes clear to the parties involved that they not only need to figure out how to best manage procedures during the M&A, but work out ways to best consolidate them after the fact. This can lead to an effort toward some level of standardization or at least blending of policy management across the newly formed organization.

To standardize or not to standardize
Certainly, there are exceptions to this. At one end of the spectrum, one can observe companies that incorporate policy management systems for individual entities that they own, but don't believe at all in standardizing policies across them. One such company has purchased our management system and makes it available for free use to any of the hospitals that it owns. But at a system level, they view each of the hospitals they own as stocks or assets in which they invest - buying and selling them according to the market. While they think that each of the hospitals in their portfolio needs a suite of technology designed to organize their own policies, they do not believe that they need policy standardization across all of the hospitals they own.

On the other end of the spectrum, the general trend among several IDNs to make sure that everyone within their system had access to precisely the same library of policies, determined and deployed from the central organization.

The trend toward flexible, hybrid solutions
Most organizations, however, have come to realize that some form of hybrid approach is best: striving for some level of standardization, but building flexibility into the policy management system for a number of reasons dependent on the nature of the merger and, very importantly, the culture that inevitably results from the M&A process. A number of case studies point in these more nuanced directions.

Case studies of the culture of policy management during M&As

Case 1: Encouraging But Not Requiring Standardization
In one case, an IDN purchased another large chain of hospitals. In the process, the acquiring IDN decided to adopt a certain set of policies as well as a technological tool to manage them. They then communicated to all of the hospitals they owned, including those being acquired, that this is what at the system level and central organization would do, and that the direction to follow would be similar, but that the acquired had some room to "do it their way". This was an intermediate way for the acquiring company to move in the direction of standardization- probably their ultimate goal, but not "rock the boat" too much in the process. The notion of "not rocking the boat" in the process of an M&A is important. When an IDN is acquiring a number of hospitals with whom they don't have much history, they may need to take into account how things have been done in the past, how it has been working there, how they have come up with policies, and what systems they have used to manage them. Rather than replacing all of those elements outright, this is an example of demonstrating what the "parent" is doing (as it were), and encouraging the children to follow along.

Case 2: A Gradual Multi-year Roll-Out
Another relevant example is of a group that decided to implement a policy management system for their chain. One would have assumed that they would put it in place within a year or so. But they instead developed a five-year roll-out plan, bringing a portion of their hospitals on board each year. A core team of two or three people would embed themselves for a quarter or two in each hospital to administer the new system. First they would bring the policy management technology, and then they would take a look at their policies. Some policies would be standardized and others left as is they felt it best to leave some decentralized. Once complete, they moved on to the next hospital, and over the course of a five-year period the end result was a fully standardized health system policy management tool. When that group again merged subsequently, it remained in a leadership position because it had its "logistical act together". More grounded from an operations perspective because of how effectively they handled their policies and procedures, they went to the forefront in the subsequent M&A. Clearly, policy management was not the only factor here, but it was very easy for the combined company to standardize according to this procedure and the first company benefited from this.

Case 3: Overcoming Staff Resistance
Another example demonstrates a different approach, but a similar outcome. One health care system was very serious about incorporating and integrating a policy management system. It intended to use it to achieve standardization across the board. In doing so, however, this IDN at a system level learned some important lessons. As in the previous example, they had put together a core level that had a very strong corporate manager as well as support from the system level. The team moved sequentially from one hospital to the next. But in doing so, they experienced some of the problems involved in many M&As, not just in health care. When deploying the system, they met with some very cold fronts from people who had set up the previous systems and who had selected other vendors in the past. One has to be very conscious of the politics involved because, of course, the staff can fear for their jobs. To overcome this obstacle, this company came up with creative methods such as town hall meetings to help iron out differences, reduce the fear factor, bring people on board, and roll out the more standardized policy suite nicely.

Today's policy management technology allows for structured flexibility
These examples highlight what seems to be the general trend regarding the issues of policy management standardization in the case of M&As today. While there are exceptions at either end, most endeavor to achieve some sort of a hybrid approach. Implementing a policy management system blending more than one system entity involves flexibility generally following this model. It is important to have a coherent plan that fundamentally follows a logical path. First, establishing a set of system level documents that everyone involved needs to input into their system and follow. Next, it is important to provide a set or bundle of recommended but not mandatory templates. These can be downloaded into each unique policy library, edited and adjusted as necessary. Finally, at a third level, some forms, files, and documents can be left up to the local designers. This sort of flexibility seems to be the most advantageous way to assure a culture of cooperation even or especially during – and after – a merger. This can only be administered effectively through the use of the latest policy management technology that allows for such structured flexibility.

The views, opinions and positions expressed within these guest posts are those of the author alone and do not represent those of Becker's Hospital Review/Becker's Healthcare. The accuracy, completeness and validity of any statements made within this article are not guaranteed. We accept no liability for any errors, omissions or representations. The copyright of this content belongs to the author and any liability with regards to infringement of intellectual property rights remains with them.

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