Best Practice Approaches To Mergers & Acquisitions

148 Pages·2017·3.88 MB·English

Navigating Partnership Options
in New York State: Strategies &
Best Practices
MCTAC OPEN MINDS Partnership Event
November 13, 2017 | 9:30am – 3:30pm ET
Joseph P. Naughton-Travers, Senior Associate, OPEN MINDS
www.openminds.com
163 York Street, Gettysburg, Pennsylvania 17325
Phone: [phone] - Email: [email protected]
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Agenda
I. Why Partnerships & What Type Of Partnerships?
A. Key Reasons For Partnership In Today's Healthcare Market
B. Partnership Decisions In The Context Of Strategic Planning
C. The Range Of Strategic Partnership Options: From Virtual Service Partnerships
To Mergers
II. Case Studies & Key Steps In Selecting A Partner
A. Case Studies In Partnerships
B. Two Typical Approaches To Partnership – Planned & Organic
C. More About Mergers & Acquisitions: Key Issues, Best Practice Steps, & Due
Diligence
D. Three Key Takeaways
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I. Why Partnerships &
What Type Of
Partnerships?
A. Key Reasons For
Partnership In Today's
Healthcare Market
Market Drivers For Provider Partnership &
Consolidation
What’s driving the push for provider partnerships and
consolidation in today’s marketplace?
– Preference for service delivery models that focus on the integration of primary
care and behavioral healthcare and coordination of services for complex
consumers
– Reimbursement models focused on value-based payment methodologies
– Increased use of competitive bidding and selective contracting by payers
– Consolidation among health plans and health care systems creates new
competitive pressures in the rest of the health and human services market
– Providers looking for economies of scale and greater financial strength to
support investments in infrastructure, staff, and development
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In Particular, Mergers & Acquisitions Are On
The Rise in Healthcare!
 Healthcare M&A activity exploded in
2015
– 14% growth in total health care activity –
from 935 transactions in 2014, to 1,498 in
2015
– 58% growth in behavioral health care –
Consolidation has been seen by
from 24 in 2014, to 38 in 2015
many CEOs as a strategy
– 104% in managed care – from 22 in 2014, necessary for long-term survival
to 45 in 2015 given the changing environment
in health and human services –
including more value-based
reimbursement, more managed
care, and decreased funding.
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The Benefit Of Economies Of Scale
 Economies of Scale: The phenomenon that production becomes
more efficient as the number of goods being produced increases.
– Larger organizations have the ability to lower their cost per unit – thanks to
the ability to spread their overhead expenses over a larger number of units.
– However, organizational size doesn’t matter without strategy – there are many
models that can achieve economies of scale, but your path to partnership and
collaboration needs to be part of an overall long-term sustainability strategy.
“There is nothing so useless as doing
efficiently that which should not be done at
all.”
–Peter Drucker
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B. Partnership Decisions
In The Context Of
Strategic Planning
What Is Strategic Planning?
 Strategy is the plan for achieving Strategy Tactics
a goal, usually over a long period
of time, through creation of a
unique and valuable market
Difficult To Copy Easy To Copy
position
Why How
– Conceptual and directional
– Developed to achieve mission, vision,
Large Scale Small Scale
and objectives
– “Nimble” or “sudden” strategy Planning Doing
– A corporate treatment plan!
 Tactics are the action items in the
strategy implementation process
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Goals Of Strategic Planning
Assess Internal
Capabilities &
Improve Decision
External Environment
Making Processes &
To Determine Best Align Board & Staff
Day-To-Day Problem
Use Of Resources To
Solving
Meet Strategic
Objectives
Make Sense Of & Promote Effective
Plan For The Future Stewardship
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