Medxcel

Top Executive Concerns in 2019: Mergers and Regulations

(7/29/2019)

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Health system mergers and acquisitions (M&A) are nothing new. Although Q3 of 2018 saw a decrease in mergers from 2017, total revenue through Q3 exceeded $10 billion. We don’t yet know how many mergers and acquisitions 2019 has in store, but we can count on seeing them throughout the year – and they weigh heavily on executives’ minds.

In a year-end poll conducted by Capital One of nearly 300 senior healthcare executives, they are forecasting big growth in 2019, with M&As as a significant driver. M&As are a primary growth strategy for many respondents, with 44 percent of executives citing it as part of their strategies in 2019. However, just because it’s in an executive’s strategy doesn’t mean it isn’t giving you or your facility pause. We understand your concerns. Medxcel’s Area Vice President Damian Skelton has distinct memories of when he was involved in a healthcare organization merger many years ago – some less positive than others.

“What was successful,” he recalls, “was when we came together in a room and had discussions and agreed on the pathways forward. On the other hand, we struggled when someone came into a room and said, ‘We’re here, and we’re going to put this program into place.’ The emotion was that, ‘We’re here because you can’t do it.’”

There are two approaches to M&A: takeover and collaboration. One of these implies hostility and a “my way or the highway” outlook. The other, however, acknowledges that there was nothing necessarily wrong with either existing organization, and their disparate operations and cultures should be honored as they’re brought together.

In all cases of mergers, it’s important to be open to learning. Damian shares that in some mergers, Medxcel has “shown up and found a practice that was better than what we have, and, in some cases, we’ve incorporated that.” One merging system Medxcel worked with had developed such a refined safety organization that we introduced it to other facilities we operate! Had we come into the system and said, “No, that’s not how we do it,” we would have missed an excellent opportunity to improve across our systems.

M&A isn’t the only thing on executives’ minds. In the same Capital One poll, executives noted regulation and reimbursement concerns would be a top challenge in 2019. We’re no stranger to the burden of regulatory overload. When looking to drive growth and profits, knowing that $39 billion a year is spent solely on administration activities associated with regulatory compliance can certainly rankle. With new regulations seeming to come out each day, it can be a lot to keep up with. We suggest the following three strategies to not get overwhelmed when dealing with new and updated regulations:
 
  1. Implement a standardized process to review and incorporate new regulations
  2. Keep up with trends so as not to be caught off guard by “the next big thing”
  3. Build and maintain internal partnerships to help alleviate multi-department regulatory changes
2019 will continue to see mergers and acquisitions and the rollout of regulations. Don’t let these trends give you pause. By keeping an open mind, or just keeping your finger on the pulse of the industry, you don’t need to lose sleep over what’s to come in this new year.

Looking for more tips on merging operational cultures? Damian’s tips originally appeared in Health Facility Management’s article, “Creating a single operational culture after a merger.” You can also find more details on reducing regulatory overload here.

Media Contact

Esther Lawson
317-975-7399
esther.lawson@medxcelfm.com

About Us

Medxcel Facilities Management enables healthcare providers to optimize their facility assets, systems and in-house capabilities, while reducing expenses. Built by and for healthcare, Medxcel Facilities Management’s solutions are being implemented in Ascension Health facilities nationwide.