Healthcare M&A continues to be a major driver of growth. But it also has some downsides.
Health care m&a deals often involve massive data migrations, from business records to documentation and software source code. This requires a well-conceived plan that prioritizes data that must be moved. This includes regulated data that must comply with a range of policies.
Improved Patient Care
In the face of increased pressure from private insurers and government programs to reduce costs, deliver better quality care, and move toward value-based reimbursement, healthcare providers are leveraging M&A as a strategy for survival. This trend has led to an uptick in hospital mergers, with acquisitions averaging $1.9 billion each.
But data integration during the M&A process can be complicated, and even a small glitch in the migration process can significantly impact the merged company’s success. Up to 70 percent of expected M&A synergies are interdependent on IT capabilities, and integrating multiple disparate systems requires much time and expertise.
Directory consolidation is a critical component of M&A, containing sensitive employee, provider, member, and patient information. However, combining directories without the right tools can lead to disruptions and security vulnerabilities. A hardware-agnostic SDS solution that can store and instantly recover patient PHI is an indispensable tool for the IT team, enabling them to minimize unnecessary risks and ensure smooth integration.
Better Care Coordination
With pressure mounting from private insurers, government-funded healthcare programs, and the general public to cut costs while delivering a higher quality of care, mergers and acquisitions are becoming increasingly common in the healthcare industry. As a result, hospitals and IDNs are consolidating to gain economies of scale and improve access to specialty services by integrating across networks.
However, M&A success depends on smoothly integrating data stacks and business systems. Without a strong M&A data management strategy, the potential for post-M&A disruptions increases significantly.
This is especially true in healthcare M&As. With a BigID solution, companies can inventory and map regulated data across the organization’s entire environment, automatically fulfill data subject access requests (DSARs), monitor third-party sharing, optimize data minimization, and automate reporting. This reduces the risk of compliance breaches and other costly mistakes while improving the accuracy of insight delivery. By enabling faster decision-making, M&A data consolidation solutions also help to improve patient outcomes.
Reduced Costs
Mergers and acquisitions in healthcare are on the rise, with many of these deals promising greater efficiency, lower costs, and better coordination. However, the evidence suggests that these benefits are rarely achieved. Most healthcare merger data show clinical quality stays neutral or deteriorates following hospital transactions.
The reasons for this are varied and complex. Generally, consolidation is driven by a desire to reduce costs in the face of escalating operational expenses and financial pressures. In some cases, mergers are intended to enable a larger care network for patients who require specialized treatment, which can result in more regular and convenient access to specialists.
One of the biggest challenges facing M&A healthcare deals is the IT integration process, which can be difficult to manage due to the complexity and scale of mission-critical IT systems. IAM solutions such as FDI’s provide an immediate and automated solution to these challenges by consolidating directory structures that contain employee, provider, and member data, application access, and protected health information (PHI). This helps ensure clinicians have day-one access to the necessary systems without introducing risk or disruption.
Increased Revenue
As healthcare organizations face increasing pressure to reduce costs while delivering better care, consolidation is becoming increasingly common. Many of these M&As involve merging hospitals and other healthcare providers to create larger healthcare systems, which can offer greater economies of scale, improve care coordination, and provide a wider range of services.
However, M&As bring unique challenges for healthcare IT teams, including merging data sets and ensuring continuous availability of critical patient information. This is compounded by the sheer volume of data involved, from medical imaging to scanned documents to EHRs and pharmacy information, along with regulatory mandates around secure storage practices.
M&As require a strong plan for consolidating, migrating, and maintaining data sets to avoid disruptions, errors, or lost data during integration. Luckily, the latest M&A data management solutions can help simplify this complex process and deliver insights faster so that you can continue to provide the best possible care.