As mergers and acquisitions (M&A) in healthcare are becoming more prevalent, with 70% of industry leaders having invested more in 2023 than expected and 60% planning to further increase dealmaking in 2024, we’re seeing how imperative it is that companies consider their digital ecosystems. Preparing to merge entities with entirely separate sets of technology is a challenge that requires careful planning. How complex will it be to integrate the systems and data architectures? How can disruptions be minimized to ensure continuity of care? These questions and others can plague the merger or acquisition process.
Essential pieces of the digital infrastructure like data warehouses, Electronic Health Record (EHR) systems, CRMs, CDPs, telehealth and virtual care platforms, and Enterprise Resource Planning (ERP) systems are obvious to consider. Still, smaller systems like Digital Asset Management (DAM) platforms, middleware solutions, and design systems and their governance must also be examined.
The successful integration of digital ecosystems has the benefits of improving patient care coordination, driving data-informed decision-making, and reducing costs post-M&A.
Let’s dive into how we get there.
A Comprehensive Digital Transformation: the Technology Piece of the M&A Puzzle
Preparation and Strategic Alignment
First, consider the bigger picture: aligning technology decisions with the strategic goals of the merger. Examine the critical business impacts. How will these technology decisions support clinical outcomes, patient experience, and operational efficiency? Forming a Transformation Steering Committee can facilitate cross-functional decision-making. Involve a broad range of stakeholders in the planning process. IT professionals, clinicians, administrative staff, and others should be included to create a thorough collective of viewpoints and opinions. Bringing these folks in early in the planning process allows the committee to gather insights and identify vital needs from across the organization. Technological considerations should be incorporated into clinical and operational planning from the outset.
Technology’s Role in the Future State Operating Model
A similar, though often overlooked facet of technology integration planning for M&A, is how it will impact organizational culture. Technology and digital experiences are ingrained in the daily activities of each member of an organization. Technology choices can significantly impact the merging entities' culture and employee engagement. The human-tech relationship is vital to examine.
With the right people and processes in place, preparing for a smooth transition on the technological side of the business becomes a lot less daunting. Now we’ll dive into some specifics of healthcare technology ecosystem considerations for M&A.
Interoperability and Creating a Flexible Integration Framework
Mergers and acquisitions can stumble on the complexities of integrating disparate digital ecosystems. Interoperability is the key to seamless data exchange and communication between systems. Proper planning and preparation can make or break the success of the integrated healthcare organization’s future. This consists of the following critical steps:
- Audit: Dig through the technology stacks of both companies. Document the details of the entire ecosystem.
- Evaluate: Look for duplicates, overlap, and gaps. Determine the future state: which platforms and systems to keep and which to sunset.
- Strategize: Create a timeline, roadmap, and governance plan to ensure a smooth transition.
Let’s explore these further.
Audit
Conduct an audit to identify the platforms and systems across both entities—a comprehensive inventory of all digital platforms and other critical tools. Collaborate with IT teams and key stakeholders to compile a detailed list of existing technology. Understand the specific function of each, how it integrates with other systems, and its overall role in business operations and/or care delivery. Note the current version of each platform, its update status, and potential challenges in aligning versions during integration. Review existing vendor contracts, ongoing support agreements, and any potential dependencies that could impact decision-making.
Evaluate
Evaluate the existing technology infrastructure and identify areas that need harmonization. Assess the digital infrastructure for duplicates and gaps. Analyze the functionality of each platform to identify redundancies and overlapping capabilities. Evaluate the compatibility and interoperability of systems to determine potential integration challenges. Analyze the performance and reliability of each platform. Identify any customizations or modifications made, as these could create integration roadblocks. Look for potential bottlenecks or areas that might require optimization after the merger. Consider the scalability and flexibility of the systems to accommodate growth and changes in the merged organization.
Strategize
Develop a strategic plan for consolidating and optimizing digital platforms in the new ecosystem. Prioritize platforms based on their criticality to business operations, regulatory compliance, and patient care. Decide which to keep, which to sunset, and any new solutions that may be necessary. You may even need to perform a process mapping and workflow analysis—map out the workflows supported by each platform to understand dependencies. Create a timeline for the phased implementation of the digital strategy. Establish a governance plan outlining roles, responsibilities, and decision-making processes for the integration. A solid and well-planned strategy will enable a smooth transition.
A solid approach comes from multiple angles: it requires prep and flexibility. Detailed preparation, as well as adopting a flexible and phased approach to technology integration that allows for adjustments based on real-time challenges and findings.
Key Technology Considerations for the Merger or Acquisition of Healthcare Companies
Healthcare companies have unique technology and data considerations. That’s why creating a comprehensive picture of each company’s existing technological landscape is essential. Coordinated efforts are needed to make informed decisions about the future of the newly merged or acquiring company's digital ecosystem. Information silos can lead to fragmented planning, so collaboration and transparency should be guiding principles. Healthcare companies undergoing M&A can navigate the complexities of combining their tech by addressing the following considerations.
Data Integration and Interoperability
Data is the lifeblood of modern healthcare. The compatibility of coding systems, data formats, standards, and protocols across the merging entities should be thoroughly assessed. Analyze structures and data quality to guide decision-making. Develop a robust migration strategy prioritizing patient data safety and integrity. It’s imperative to seamlessly integrate all types of critical data, including but not limited to EHR data like patient records and clinical data, as well as inventory management, population health data, financial data, and billing systems. Treating data interoperability with the attention it deserves maintains operational efficiency and continuity of care.
Security and Compliance
With more than 540 organizations having reported healthcare data breaches in 2023 impacting upwards of 112M individuals, data security is absolutely essential. Prioritize security measures to protect sensitive data, both during and after the merger or acquisition. Evaluate potential security risks from merging systems with different access controls or encryption methods. Conduct a thorough assessment of each system's infrastructure, applications, and security protocols. Leverage subject matter experts to identify potential conflicts, redundancy, and vulnerabilities. Address necessary compliance with healthcare data privacy regulations, ensuring that industry standards and legal requirements for patient data will be fully adhered to.
Brand Identity & User Experience (UX)
Don’t let the end-user experience suffer from a lack of thoughtful consideration and planning. It is well worth it to harmonize user experiences to establish cohesion and consistency for users—from healthcare professionals to patients. Consistent design elements, navigation structures, and interactions provide a seamless and user-friendly experience. Consider usability testing to identify and address any potential issues that can arise from system mergers.
Also, consider the impact of the brand, whether existing or new, on patient perception. Aligned brand messaging and style secure trust in the merger or acquisition and loyalty to the brand or brands. Leverage a merged Design System to unify visual style and brand compliance going forward.
Mitigating Workflow Disruptions
Planning for and mitigating workflow disruptions involves meticulously analyzing existing clinical and administrative processes to identify potential bottlenecks and challenges during the integration. By mapping out these possible disruptions, healthcare organizations can proactively implement strategies to mitigate negative impacts, ensuring a smooth transition for staff and minimizing any temporary decreases in productivity. A proactive approach involves clear communication, targeted training programs, and the establishment of contingency plans. The ability to address unforeseen issues that may arise increases the chances of success. These processes help minimize or even eliminate disruptions to existing clinical and administrative workflows during and after the integration process.
Blending the Digital Ecosystems
As the clock ticks down towards the actual migration and implementation, a mix of anticipation, anxiety, curiosity, and optimism can emerge. What unexpected complexities might arise during integration? What will the new work ecosystem be like? The task of merging disparate systems, protocols, and data formats looms. Given both the complexity and volume of digital properties in healthcare ecosystems, this side of M&A can feel overwhelming.
The promise of cutting-edge, unified platforms and systems holds immense potential for improving efficiency, generating data-driven insights, and enhancing research and care capabilities. And the chance to shape a future that supports innovation and agility in the rapidly evolving healthcare landscape is exciting. Consider how advanced healthcare technologies like Artificial Intelligence (AI), blockchain, IoT, and more can be leveraged not just to integrate but also to innovate and future-proof operations, enhance care delivery, and improve patient outcomes.
Creating a roadmap is the best way to prepare for this endeavor fully. The roadmap identifies opportunities for consolidation and enhancement and strategically plans the phased implementation. The roadmap should align with the company's goals and consider important milestones when timing each platform and system's migration, integration, or sunsetting—as determined in the audit, evaluation, and strategy phases.
Change Management and Digital Governance
Transform pre-merger nervousness into post-merger enthusiasm for a thriving, digitally-powered future. Change management is a huge component of facilitating a smooth transition for employees. It involves careful planning to address the human side of the merger—technology is just one piece of the overall employee experience. When strategizing change management for technology, it’s important to communicate, address concerns, and gather employee feedback effectively. They may resist change or, conversely, be eager to learn the new tools—transparency and communication are key. Provide training to help staff become proficient with the new digital tools and workflows.
Similarly to change management, governance is essential for onboarding employees to newly merged technologies and processes. Establish clear governance structures for the digital ecosystem, defining roles, responsibilities, and decision-making procedures. Implement policies to outline access controls, data ownership, and usage rights. Employees should be made to feel confident and ready to contribute. Careful and detailed outreach encourages adoption.
Data Migration and Cleanup
To unlock the full potential of the merged digital ecosystems, plan for the migration of data from legacy systems to the unified platform(s). Develop a data migration strategy, including data mapping, validation, and testing procedures. Execute data cleanup activities to eliminate redundancies, inaccuracies, and outdated information. Data security and compliance should be top of mind throughout the migration process.
Testing, Performance Monitoring, and Optimization
Ensure the performance and functionality of the integrated digital ecosystem. Conduct thorough testing of the integrated systems to identify and resolve any issues. Optimize the new digital infrastructure based on feedback, performance metrics, and evolving business requirements. One way to do this is to implement monitoring tools to track the performance of the integrated digital systems. Tracking and measuring the impact of the merged system on clinical outcomes, operational efficiency, and cost savings is a great way to understand the return on investment.
Regularly optimize the digital ecosystem to address evolving needs and emerging technologies. Establish processes for ongoing monitoring and improvement of the digital ecosystem. Implement monitoring tools to track the performance of integrated systems. Continuously assess and improve the digital infrastructure based on emerging technologies and changing organizational needs.
Looking Ahead: Innovation and Readiness
Investing in innovation and future readiness involves embracing emerging technologies and solutions like Care Advisor, a generative AI solution that simplifies administrative processes in healthcare, and encouraging cross-disciplinary collaboration among teams to foster a dynamic and creative environment. Foster a culture of innovation to leverage the merged entity's digital capabilities for future advancements. Stay informed about emerging technologies and trends in healthcare technology and innovation to ensure the digital ecosystem remains future-ready. Proactively adapting and positioning the company to address dynamic challenges enables the delivery of cutting-edge solutions that enhance patient care and operational efficiency.
Ready for Digital Transformation ?
Addressing the digital ecosystem is crucial in any major healthcare business change. A healthcare company undergoing a merger or acquisition might have mixed feelings about digital transformation. On one hand, there could be excitement about the potential benefits, such as improved efficiency, enhanced patient care, and streamlined operations.
On the other hand, there may be apprehension due to the complexity, potential disruptions, and the need for significant investments in both time and resources.
Clear goals, collaboration with experienced technology partners, and a well-defined roadmap can help alleviate concerns and instill confidence in the company's ability to navigate and derive value from the digital integration process successfully.
With considerate preparation, companies undergoing mergers and acquisitions can successfully merge digital ecosystems and position themselves for growth in the evolving healthcare landscape.
Looking for a trusted partner to guide your digital transformation for a merger or acquisition? Our experts’ deep focus on healthcare and expertise in digital integration and optimization will position you for success. Get in touch with one of our team members and start leveraging the deep insights, technical knowledge, and support you need for a seamless transition.
