Merger and Acquisition Planning
Perspective
Hospital boards and executive teams are increasingly facing very uncertain futures. Operating margins are under pressure. Reimbursement from governmental and third-party payers is declining. Maintaining an adequate clinical staff is increasingly difficult and expensive. Supply costs are sky rocketing. At the same time, access to additional capital resources is becoming imperative for replacing antiquated facilities and adding new technology. For some organizations the only solution may be to merge with larger organizations.
Need
Before entering into mergers or acquisitions, hospitals need to know their current situations, as well as their desired futures. Many organizations are facing questions similar to the following:
- Can we continue to survive as a “stand-alone” organization?
- What are the criteria against which we can measure this ability?
- Should we consider acquiring another hospital or hospitals and hope to achieve some real economies of scale?
- Should we consider merging with another organization?
- What will be the benefit to the community?
- The cost?
- If we decide that merger is the best route, whom should we consider?
- On what basis should we select our future partner?
- Do we have “deal breaker” conditions that could prevent us from accomplishing an otherwise desirable merger or acquisition?
- If we proceed with a merger or acquisition, how do we insure that we keep our best people and optimize our combined programmatic strengths?
ASR Planning can help organizations answer these and many related questions.
Idea
The merger and acquisition assistance we provide to organizations varies depending on the status of the organization. If the organization is in the earliest stages of need or even in simple inquiry, we assist them in developing our proprietary THREAT EVALUATION system to evaluate the current and future pressures against their stability. We will identify quantifiable financial, operational and market criteria against which an organization can trend their condition. For organizations that have already determined that the need exists, our menu of merger/acquisition planning services is segmented into three phases - Feasibility Modeling, Request for Proposal (RFP) Generation, and Due Diligence or implementation Assistance. These services can be integrated or utilized a la carte to meet specific client needs.
Benefits
The key benefits associated with our models include:
- An objective approach to evaluating the current and future ability of an organization to survive.
- A multidisciplinary team with insights on a broad variety of strategic, operational and facility issues that must be considered when proceeding with organizational change.
- A process that assists in identifying cultural issues that frequently undermine reorganization.
- Integrated menu of services to support timely and informed decision making throughout the evaluation, planning and implementation of potential mergers and acquisitions.
Solution
Our team of seasoned healthcare consultants has assisted clients with all aspects of strategic planning. While an individual organization may evaluate any given program once every five years or more, we are constantly monitoring the industry for the changes that will impact the continuum of programs and services. The opportunity to achieve substantial change requires consultants with the depth and breadth of experience to accomplish the task.
Contact
Douglas Rich, FAAHC, FACHE
Managing Director
Phone: 773.880.2218
doug.rich@asrplanning.com
Office
2835 North Sheffield Avenue, Suite 309
Chicago, IL 60657-5084
