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Post-Merger Integration: The Key to Value Creation in Healthcare Transactions

Post-Merger Integration: The Key to Value Creation in Healthcare Transactions

  • July 10, 2018

Mergers and acquisitions (M&A) is not a new concept for hospitals and other healthcare industry organizations, particularly during the era of hospital-physician alignment. Making M&A transactions work, however, is an entirely different exercise and increasingly challenging in today’s marketplace.

The foundation of this discussion is to first define what we mean by “making a transaction work.” Here, we are referring to a transaction that results in long-term value creation for all stakeholders, and evidence shows that this is a more challenging achievement when evaluating hospital mergers compared to assessing short-term success. Measuring the true success of a transaction requires a look far beyond the initial perspective of fit and financial returns, focusing instead on whether the affiliation resulted in compelling value realized over an extended period.

So, how can we ensure such strategies are resulting in long-term value for these organizations, as opposed to just short-term tactics implemented on a reactionary basis? This is where effective post-merger integration comes into play. Coker’s white paper on post-merger integration offers vital points that organizations should follow when pursuing long-term value from transactions.

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