Healthcare mergers and acquisitions (M&As) are happening more frequently than ever. In fact, 2017 was a banner year for M&As, with 115 transactions, including 10 deals between hospitals with a net revenue of over $1 billion—the highest number in recent history.
The value of healthcare M&As is only increasing. While 2017 saw $104.8 billion in M&As, 2018 is on pace to shatter that number with over $150 billion in deals in Q1 alone.
With so much money, time, and effort on the line, it’s important to realize that integrating two distinct and complex organizations is a highly complicated process that must be carefully planned and executed. A crucial part of this is having the right technology in place.
Throughout M&A integration, change is constant and challenges—both expected and unexpected—will present themselves. Putting an identity and access management (IAM) solution in place before an M&A is key to quickly and securely enabling this change at every step of the integration process.
Without IAM in place, it’s all too easy for M&A integration to become a nightmare that negatively impacts clinician and IT productivity, quality of patient care, and organizational security.
Let’s take a closer look at the trend of healthcare M&As, as well as the major hurdles to successful integration. In part one of this two part series, we’ll discuss how IAM can help with onboarding and directory management challenges during M&A integration.
Why are Healthcare Organizations Merging?
Hospitals are facing increasing pressure from private insurers, Medicare, and Medicaid to reduce costs, while also delivering higher quality care. This has lead to a surge in M&A in the healthcare industry, as smaller hospitals and independent physician groups merge together into larger healthcare systems, to better position themselves to address these demands. By strategically partnering, healthcare organizations can streamline operations and reduce repetitive functions, as well as offer additional services.
Another driving force behind healthcare M&As is the rise of value-based care, a form of reimbursement that incentivizes the quality and effectiveness of care as an alternative to traditional, fee-for-service care. Here again, coordinating efforts between multiple providers makes it easier to provide better patient care.
When multiple providers are able to work together, it makes it possible to implement more innovative strategies that rely on a larger network, such as population health management. By merging, a network of healthcare providers can aggregate and analyze patient data to reveal opportunities for cutting costs and improving patient care.
Tackling Healthcare’s M&A Integration Challenges with IAM
Without a doubt, the toughest barrier to M&A success is the IT integration process. Upwards of 70 percent of expected synergies from M&A transactions are interdependent on IT capabilities, so IT integration can literally make or break the overall success of an M&A.
Organizations are certain to face any number of challenges during this complex process—any one of which can derail the success of a merger. Here some of the most critical M&A challenges healthcare organizations face—and areas where having the right IAM solution in place can make the most impact.
Slow, Complex Onboarding and Access
During an M&A, each organization brings their own technology stack and integrating all of those platforms takes time. They likely have different EMR systems in place (Cerner vs Epic), favor different clinical apps, and utilize a slew of different operational and back-office technologies.
Without the right IAM solution in place, creating accounts in downstream systems and provisioning the correct level of access is a tedious and often error-prone process. However, IT is expected to ensure clinicians and other staff are given immediate access to the clinical systems and applications needed to maintain quality of care.
Not only do disruptions and delays in access put patients at risk, but it puts healthcare organizations at risk of losing clinicians and other valued staff. In fact, losing talent is the number one perceived risk of M&A.
Provide Day One Access with IAM
IAM solutions make it possible to provide clinicians and other staff with day one access to the necessary applications, relieving much of the stress providers experience early in the integration process.
Regardless of the type of directory system(s), IAM solutions can quickly connect into the acquired provider’s directories, allowing IT to easily grant the acquired provider’s users access to the parent provider’s systems and applications.
This too can be streamlined by automating onboarding and account creation using workflow-driven user provisioning and multi-directory and resource administration.
And finally, IAM solutions enable IT administrators to quickly assign users the proper permissions without guesswork or room for error. By implementing role and attribute-based access controls, access controls can automatically be added and removed based on a user’s specific attributes or role.
Complicated Directory Management
Each organization involved in an M&A brings with them their own directory, or even multiple directories, that contain employee, provider, member and patient data, as well as health plan data, prescription information, and other protected health information (PHI). The inclusion of such sensitive information and PHI makes managing and consolidating these directories particularly challenging—minimizing errors, disruptions, and potential vulnerabilities is critical to security and patient data privacy.
While directory consolidation can simplify identity management post-merger, it is a lengthy and complex process that can take months, or even years, to accomplish. In the meantime, you need to be able to manage these separate domains.
Keeping information consistent and synchronized across multiple, separately managed identity sources is huge challenge. When done manually, the complexity of managing separate directories can easily result in duplicated processes and human error. Furthermore, all of this is a significant time drain that prevents IT personnel from being able to focus on other integration-related priorities.
How IAM Simplifies Directory Management
IAM solutions simplify the management and consolidation of multiple directories by eliminating the need to consolidate directories before automating and centralizing identity management of the acquired companies users. That way, organizations can consolidate directories at their own pace—or simply leave them separate, without worrying about downtime or disruptions to clinical workflows.
IT Integration Starts with the Right Technology
Developing the right integration plan starts with the right technology. Having modern IAM in place before starting the process lays an essential foundation for M&A integration success that simplifies directory management and ensures users from both organization have the access they need from day one.
In the second part of this series, we’ll look at two other critical areas in which modern IAM enables integration success: minimizing disruption to clinical workflows and maintaining cyber security.
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