As the number of mergers and acquisitions increases, it's more essential than ever that hospitals become experts at effectively delivering on both the strategic purpose and financial promises of the transaction without taking on undue risk. This is particularly important in the growing number of deals that bring providers together across the formerly distinct boundaries of faith-based, secular, not-for-profit, for-profit, academic, community and even physician networks.
Key questions hospital executives need to contemplate when considering a transaction:
- Do we have a clear and comprehensive understanding of the transaction's full cost — including total costs of pension, health care, retiree medical and related reward programs?
- Do we know the regulations and provisions that could affect our tax status, workforce programs or other operations as a result of acquiring or merging with a distinctly different type of institution?
- What are the cultural and community implications of the transaction?
- How rapidly and to what extent do we need to integrate operations?
- What kind of talent do we need? Do we have it in sufficient supply? What are our engagement and retention risks, and how do we address them effectively?
- How do we build our leadership team?
- Have our senior leaders articulated the new or evolving mission and vision, and made it clear and meaningful to employees?
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