High Stakes

The Talk of the Deal: 12 Tips for Effective M&A Communications

Talk of the Deal

Repeal and replace is off the table. Unless it’s not.

Uncertainty in the market is sure to drive consolidation. It signals to healthcare system leaders the need to scale. And the certainty of reduced reimbursements is making partnerships and alignments viable paths.

With that in mind, it’s a good time to revisit those things that make a partnership successful. We asked our team – who has handled more than $35 billion in announced deals over the past decade – to offer some smart thinking about successfully navigating healthcare system M&A and partnership transactions. Note: some of their recommendations are work you can begin immediately. It’s all about tilling the soil and preparing the way.

Expect resistance. No matter the value of the proposed partnership, it will be met with resistance, if not outright opposition. It’s a natural reaction to change and the unknown.  What to do? Anticipate the questions and concerns of your most important audiences and create thoughtful and candid responses. Speak to them one on one or in small groups so they can be heard. This work allows you to speedily address issues as they arise without taking you off strategy. It also demonstrates your awareness of the fair fears shared by those most impacted by the transaction. This work builds trust, and trust makes deals happen.

Get your team on the same page – earlier rather than later. Leaders. Lawyers. Communicators. Brokers. Getting a deal to the finish line requires a lot of people, so take the time to identify lanes, roles, responsibilities and processes early on. It’ll help keep lines of communication open between key players and help your entire team remain nimble throughout the process.

Have a big story.  Any M&A transaction equals change – sometimes monumental change – for a health system. To get people comfortable with the idea of change – even when you don’t have all the answers – you must have a compelling story with three key components.

  • Outline the threat of why remaining the same just won’t cut it.
  • Paint a clear and compelling vision that people can see themselves in: Here’s what care delivery can be, how the patient experience can improve, how doctors and nurses can once again practice at the top of their licenses, how our community will be healthier, etc.
  • Share the path you’ll take to get there – namely, a partnership.  (P.S. This can be done long before you select a partner or deal structure.)

The path from LOI to definitive agreement can be long and twisty. Do not make the mistake of announcing your LOI and then disappearing. Your employees and the community at-large will need to see and hear from you during this time, even if there isn’t news to share. It is okay to not have all the answers; it’s not okay to be invisible. Take this opportunity to listen to your constituents, hear their concerns and their vision for your shared future, and see where you can include those perspectives in how you think and talk about your partnership.

Build in flexibility. It’s highly doubtful that you’ll pursue only one option. You can begin thinking about your communications and messaging early in the process by creating a few different tracks, based on your potential partners and how each will differ.

Empower your board and staff as ambassadors on the deal. Arm them with the many benefits the system and community can expect and speak with pride about how the system is planning for the future. Our people are our best advocates.

Don’t dance to somebody else’s music. It’s an old political rule that reminds us not be drawn off course when opposition to the partnership arises. It may come from disaffected physicians, the competition or from other corners. They are looking to distract you from your goals, of course. Address their concerns if appropriate, but don’t change your tune.

A ComebackOne of the hottest issues of the early 2000s – physician ownership in whole-hospital J/Vs, specialty hospitals, etc. which were legislated out of business at the hands of the acute care industry – is very likely to become a front burner topic for Tom Price and the new administration.  Should be interesting to see if a value-based reimbursement world – where finding efficiency and lowest cost care delivery settings win the day for all providers – will change the position of the acute care world.

A surprise or two (or three) is inevitable. Minimize risk through preparation. You (and your partner) are running complicated enterprises and caring for patients – the unexpected will happen. Disappointing quarter? Sudden departure of a key board leader? High-profile incident with a patient? We’ve seen these and all manner of oddities come up out of the blue. A focused and organized team with the discipline and processes to stay on-message can prevent deal stall and distractions from killing what you’re working toward.

Engage physicians early and often. Physicians bring an important perspective to the selection of any partner or the molding of a new relationship. They also wield significant political power within your organization. Practically – make sure your physician board members are intimately involved, consider developing a Physician Advisory Council, take them with you on reverse due diligence trips.

The messenger is truly the message. When engaging key stakeholders during a transaction – especially internal audiences – it’s important to identify and utilize those leaders within the organization whom your key stakeholders trust the most. It could be a physician leader, a nursing leader, a manager who has been with the organization for 20+ years – you get the idea. The right messenger can be a credible, reliable source of information to alleviate any concerns and build excitement around your vision for the future.

Lean toward transparency. It’s never been harder to keep a secret. Social media seems built to facilitate leaks. In all things, lean toward sharing as much as you can as soon as you can. This discipline will allow you to stay in charge of your own message and establish yours as the voice of authoritative information. Otherwise, you’ll find yourself fighting brush fires of half-true rumors and losing control of your story.

Remember what remains. Change doesn’t have to be as scary or all-encompassing as it sounds. Maybe your stakeholders have an overwhelming affinity for your volunteer program, a certain pediatric service or a long-time community sponsorship. If it’s something you don’t intend to change, don’t forget to let people know it will remain and – now, thanks to your new partner – will grow stronger than ever.