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One of the lagging effects of the 2020 COVID-19 pandemic that is beginning to emerge is the deep financial toll this event has taken on hospitals and health systems. As a result, the pace of merger activity is once again expected to increase. Even for smaller provider groups, the increasing regulatory burden over the past few years is making it more difficult for these practices to remain independent.
In both examples, if there’s one aspect of a merger or acquisition that is often neglected or deferred, it is the lack of adequately accounting for the combining of the organizations’ IT infrastructure. This oversight is somewhat surprising, given the central role these systems now play in the everyday delivery of care—and the management of the revenue cycle.
And yet, even as a small consultancy, we have seen more than one instance where the overriding focus of the merger negotiations—usually centering on finances—was all but complete before IT teams were even consulted to weigh-in on the ramifications.
The problems with looping in your IT resources later in the process boil down to two critical issues that can have significant implications:
1. LACK OF TIME TO ACCOMPLISH THE IT MERGER/MIGRATION
It’s one thing to assume you can impose a vision on a group of clinicians, an IT team, or an administrative group, but that may not lead to ultimate (or efficient, or affordable) success. It’s quite another experience to give every stakeholder the chance to feel heard and respected, while helping to inform an optimized plan for moving forward cooperatively. The difference in results can be striking—and the key driver of that success is having sufficient time to pull it off. Engaging your IT leaders earlier in the process will lead to a smoother process all around.
2. UNEXPECTED COSTS AROUND THE IT MERGER/MIGRATION
Unless a consultant or in-house project leader has deep merger experience, a host of “gotchas” can often lie in wait. For example, one acquiring organization made the assumption that they would reap certain economies of scale savings without realizing that the acquired organization had iron-clad supplier contracts that would extend for another 5 years, essentially negating that anticipated savings. This is not to say that an acquiring hospital can’t have aggressive goals for merging IT organizations. For example, Brennan Lehman, CIO of Mosaic Life Care (St. Joseph, MO) informed his team that they would have exactly 90 days to on-board a newly-acquired rural hospital in Maryville. The story of their successful implementation can be viewed in this video, but one of the keys to success was setting up cross-functional workgroups to address individual IT solutions. Additionally, a build reconfiguration—identified by S&P—provided immediate and ongoing savings.
Believe it or not, merging HIT systems is not an IT project. (At least not exclusively!)
While some organizations entrust a merger to consultants who work for their EHR or Revenue Cycle Management vendors, the risk with that approach can be a lack of experience in dealing with installations that are older or highly customized. In these instances, vendor resources can be conflicted between their roles as problem-solvers and new technology providers.
Further, these resources are often more comfortable with technology and less experienced with the “people issues” that often play an even more critical a role in a successful merger.
On the other hand, there are consultants (like S&P) who have experience in guiding dozens of successful mergers over the years. Cross-discipline teams can call upon a broad array of resources who will be able to understand, anticipate, and communicate critical needs to all of the various stakeholders in the process. In this “honest broker” role it can be easier to get all parties (IT, Senior Leadership, and Vendor Resources) aligned onto the same page— and schedule.
For the people most affected by the merger, including frontline clinicians, S&P Consultants deploys our own clinicians—doctors, nurses, lab techs—to help ensure that critical workflows are understood and accounted for. This peer-to-peer dynamic also goes a long way toward smoothing the process of training/re-training and gaining the trust/engagement of key stakeholders that can make or break the success of the merger.
Ultimately, it is the people involved—across the organizations—who hold the key to a successful merger.
The organizational chart of a 70-bed facility looks quite different than a 900-bed one, even when job titles align. How many “hats” are respective managers used to wearing? What if one organization needs to account for different specialties… different staffing models… different governance practices? The bottom-line is that a cookie-cutter approach to merging is unlikely to result in an optimal experience. For consultants who are able to address issues like governance, staffing, and as-built systems, a much more realistic approach can be developed. But that doesn’t mean putting a “question mark” under the costs and timing of an IT
At S&P Consultants we use a proven framework—S&P InTegrity that lets project managers confidently forecast the allocation of resources and the likely timing of the merger project. This process has been tested dozens of times under real-world conditions and is part of the way the firm has earned a 2021 Best in KLAS award for Implementations requiring fewer than eight full-time resources.
In any “game-critical” situation, there’s no substitute for experience. Of course, it’s a rare IT manager or CIO who has been through more than one or two mergers over their career. By the time Senior Leaders are trying to figure out where the problems are—operations? IT? HR?—it’s probably going to take a lot of resources to fix/redress issues, than it would to have addressed them back at the planning phase.
If your IT group is struggling to perform under remote-only conditions or due to resource losses (from budget cuts or illness) we welcome you to contact S&P Consultants for help. Our people have the kind of real-world experience that allows for hyper-efficient interventions—often performed remotely—with broad expertise across dozens of installations like yours. Our dedication to doing right by our clients has earned us recognition by KLAS including a 2021 “Best in KLAS” Award for Implementations requiring eight or fewer resources.