Mergers and acquisitions are becoming increasingly common in the healthcare sector. These transactions not only have financial benefits, but they also have the potential to redefine the patient experience. Large organizations are unifying care delivery in new ways. The CVS and Aetna merger, for example, has the power to change healthcare at scale in the United States.
At Becker's 8th Annual CEO & CFO Roundtable in Chicago in November, NTT Data hosted an executive roundtable to explore the pros and cons of addressing the patient experience during a merger or acquisition, as well as best practices for mitigating the risks.
Change is coming from all directions in healthcare
Andrew Arends, NTT Data's Vice President for Healthcare Strategic Solutions and Innovation, shared four drivers of change in healthcare today:
1. Consumerization. People are starting to compare healthcare to retail companies like Amazon, as well as hospitality leaders like Ritz Carlton and Disney.
2. Technology. Software is playing an increasingly large role in the healthcare sector. Healthcare systems are doing less direct integration work on their technology platforms and are using more software automation tools.
3. Financial pressures. Health systems have an obligation to see and treat patients, yet the cost of that care is increasing relentlessly.
4. Competition. Competition in healthcare is intensifying and coming from nontraditional players. For instance, Walmart recently opened an integrated health center in Dalton, Ga, that brings together primary care, behavioral health, vision, dental, lab and pharmacy all in one location. Walmart could be a powerful new healthcare player, considering that 80 percent of Americans live within 15 minutes of a Walmart store and almost half of Americans visit a Walmart every month.
Using digital health strategies to heighten patient engagement
Digital health strategies have emerged as an essential piece of delivering a more engaging, seamless patient experience. These strategies include tools to improve patient scheduling, intake, financial management and clinical care.
Unfortunately, the patient experience in many health systems today is disjointed. "Imagine having to fly somewhere and you have to make one phone call to get your seat and another phone call to deal with your baggage. That's what we're asking patients to do and we're trying to move away from that. Patients expect more … they want a better experience," explained Mr. Arends.
Given the important role that digital health strategies play in the patient experience, it's critical for health system leaders to consider technology issues when entering a merger or acquisition transaction. Mr. Arends shared five best practices to support the effective use of technology during and after an organizational transition.
- When participating in a merger or acquisition, don't disrupt the system of record. Don't force all parties to change their EMR. Instead, leverage and integrate data across different platforms. One exception to this rule is if a health system is acquiring or partnering with another organization in their local geography. In this case, standardizing on a single EMR system makes sense so local physicians don't have to interact with two different systems.
- Manage internal stakeholders carefully with clinical support. One of the biggest drivers of physician and nurse dissatisfaction is sending people through a transition without providing them with the level of support they need. They won't need extra support forever, but it's essential for a short period of time.
- Overinvest in change management. When NTT Data works with customers, change management is one of the things that often gets cut from the project budget because no one wants to pay for it. However, CIOs say again and again that change management really makes a difference to the success of projects.
- Keep IT at the table from day one. The presence or absence of IT can make or break a merger.
- Don't let a crisis go to waste. Mergers and acquisitions should be viewed as opportunities to make bigger changes in how a healthcare organization engages with patients. When a merger or acquisition happens, patients and employer groups expect the affected healthcare organization to get better. Examples of projects that improve the consumer experience include moving to a common patient portal, common mobile app or common population health tool regardless of the EMR system that is in use.
The pros and cons of addressing the patient experience during a merger or acquisition
The executive roundtable participants shared their thoughts about the advantages and disadvantages of transforming the consumer experience during a transaction. On the upside, mergers and acquisitions provide health systems with an opportunity to serve patients and providers better. Unifying organizational cultures early on can create customer loyalty and buy-in. Expanded networks often give patients new access to specialists and providers may have greater access to research or academia.
Capturing real-time data is a way to streamline care and meet patient expectations. One attendee said that patients are over surveyed. Digital data capture can reduce the need for surveys.
Better access to data also enables healthcare organizations to shadow the patient's care journey and engage in direct-to-consumer communication. Data delivered in these communications can empower patients to own their own health and become more knowledgeable.
One participant commented, "When it comes to revamping the patient experience, you don't have a choice. You have to do it because it's being demanded now."
Addressing the consumer experience during a merger or acquisition isn't without disadvantages, however. One concern is the cost of the work, beyond what was modeled in the pro forma when the transaction was planned. Change management is also a worry, since change is difficult for everyone. A challenge for physician leadership is understanding what's in it for them. Health systems must help people manage through the change.
On the technology side, lack of interoperability is a big issue in terms of continuity of care. Security is also on everyone's minds. One of the downsides of EMRs is the time it takes clinicians to perform data entry. Studies have found that many clinicians simply copy and paste information, which leads to inaccurate diagnoses and other errors in the EMR.
Redefining the consumer experience, while mitigating the risks
The roundtable attendees identified five ways to mitigate the risks associated with redefining the patient experience:
1. Prioritize the external voice up front. This can be gathered through community focus groups, surveys, reviews and ratings from customers and physicians.
2. Appoint a patient advocate. This individual must be at the table whenever work will affect the consumer experience. Identifying this person may be challenging, since conflicting groups in healthcare organizations often think they "own" the patient.
3. Create a strong foundation of systems and processes to support technology. You can't let the technology alone drive the change. Think about bringing systems together before mergers happen. Another best practice is to engage security experts early on.
4. Develop contingency plans in case course correction is needed. It's critical to learn and correct over time. A gating process can be helpful which clearly identifies "go" and "no-go" decision points.
5. Don't underestimate the importance of communication and adequate resources. Both of these are essential to successful change initiatives.
Conclusion
As health systems deal with increased competition and financial pressures, mergers and acquisitions are becoming inevitable in many markets. These events provide a unique opportunity for organizations to take a fresh look at the patient experience and to reinvent it with innovative digital strategies.
"Patients are watching the news and they've heard about your organization's merger," Mr. Arends said. "They are expecting more from you. Making changes to enhance the consumer experience might cause a little pain at first, but in the long run they will be beneficial."