Common Issues in Healthcare Mergers and Acquisitions

 Mergers & Acquisition in the healthcare industry has been strong in recent years and is expected to grow. Acquiring a new company or product line can have a positive business impact, but it also comes with implementation, process, quality & regulatory challenges. Especially, in the medical device industry, failure to comply with regulations can result in the loss of authority to deliver products and services.

While the impact of COVID-19 on these deals is yet to be felt, it remains an advantageous avenue for organizations to pursue. But what are the common issues in healthcare mergers and acquisitions?

 

·         Failed Cultural Integrations

This type of issue has the potential of increasing operational costs. Staff are unsure about the correct working procedures or administrative processes, agreed upon by the integrated management but not accurately communicated business wide. This could result in mismanaged patients, poor results, and even costly mistakes.

·         Standardizing Operational Procedures

Structural change like this isn’t easy - it requires dedication, communication, and a lot of training. But it’s not impossible. Overall, it can influence improved behavioral changes. However, remember that all changes need to reflect the needs of the staff. Something implemented universally that only benefits or works for 50% of healthcare providers isn’t something worth pursuing.

Clinical practice unification is the best way of ensuring that what were two or more separate healthcare providers now view themselves as a collective.

·         Supply Chain Risks

In most cases, the costs of supplies will increase post-merger, almost immediately. This is to be expected, as two separate market shares become one, which can drive up prices, especially if that market share is a large one.

·         Reduction in Care Quality

It comes down to an issue we’ve already mentioned - clinical variation. Merged systems have different ways of doing things, meaning that Care Variation Reduction (CVR) is a common problem within healthcare M&As.

The two parties need to approach the process with foresight and caution. There needs to be an early focus on capturing similarity within your care offerings, alongside a singular approach to IT and administrative tasks. In the best-case scenarios, this is implemented before the actual merger is completed.

Strong Project Management, Medical device Expertise, Quick Scalability of Skilled Resources are the key enablers of our success for Acquisition Integration Projects. As depicted above, IZiel’s approach has been very comprehensive and methodical. IZiel team can support your team in various ways.

Why to Choose IZiel?

At IZiel, our team has upgraded thousands of documents for various acquisition integration projects of Class I, II & III medical device companies. Our Outcome Based & Onshore-Offshore Delivery Model has worked effectively to complete the Post-Merger Integration with significant reduction in timelines and budgets.