March 20, 2018
You’ve Gotten Married – Now You’ve Got to Live Together
Why communications and culture are the most important factors of a healthcare merger
Insurers, retailers, hospitals and health systems across the country are deep in merger and partnership discussions that will result in extraordinarily complex mega systems and a variety of non-traditional relationships.
Take CHI and Dignity, a recently announced proposed merger that will create the largest not-for-profit health system by revenue. Or CVS Health’s proposed $69 billion merger with Aetna that combines a retailer and insurer in an attempt to, as Aetna CEO Mark Bertolini, told Becker’s Hospital Review, “keep people healthy where they live.”
These organizations are led by smart, experienced people who are spending countless hours building business cases for their new, combined organizations. They’re looking for opportunities to grow programs, services and market share while enhancing quality and efficiencies. They’re probing for red flags that might signal ominous financial outcomes and asking tough questions about potential legal and medical liability landmines.
But history – and my own experiences in both successful and failed mergers – prove that these calculations are not adequate predictors of success. Like many of you, I’ve worked in community hospitals whose employees have balked at their “diminished” roles in an academic system. I’ve sat with doctors who are afraid that they’ll lose their autonomy after being acquired by a large physician practice. I’ve reassured community leaders that their hospital’s EDs will keep their doors open after the merger is complete. And I’ve worked with our leadership team to balance the competing priorities of a complex integrated health services organization.
As a communications professional with half a dozen hospital and system mergers, countless programmatic partnerships, and several hospital closures under my belt, I’ve learned that internal politics and cultural fit are just as important to long-term success as the P&L.
So, in this era of ever-more-complicated mergers and partnerships, health system leaders must factor in communications as a vital, strategic underpinning to a complete M&A strategy. The fact is, effective communication and cultural compatibility predict the success of a merger as much as any other determinant.
Tactical elements such as a new logo and tagline, employee newsletter, and the Day One celebration are just the icing on the cake. Leaders looking to shore up their communications work before a major merger should begin with a comprehensive cultural and communications assessment. Then, members of the leadership team need to agree on a long-term strategy that starts immediately and continues through Year 5 – that’s how long true cultural development takes.
Here are seven pieces of advice leaders should follow in order to build a unified culture , both immediately, and for the foreseeable future:
- Make sure the CEO, board and senior leaders are all on the same page. The messaging cannot change just because one person moves on.
- Have patience. The transition to a new culture is a long-term process.
- Find out what cultural attributes are critical to each organization. Are there any in common? If so, make sure they are carried through to the new organization.
- Be honest. If research and education are truly what drives one entity, but clinical excellence drives the other, talk about it up front.
- Understand that every audience has a different point of view on the same attributes. Make the messages relatable. Answer the questions: What does this mean to physicians? Environmental services? Billers? Others? What is their role in the new organization?
- Appreciate – and celebrate — the differences.
There will be good days and challenges ahead. Regardless of your organization’s mood, Be transparent in your decision making, supportive and visible.