5 steps to take before your hospital merges
When it comes to navigating one of the worst financial landscapes for hospitals in modern history, many health systems are turning to mergers and acquisitions to achieve stability. In the current environment, mergers and acquisitions are essential to maintaining access and quality in communities across the country.
Despite the financial realities and the importance of care access to communities, health systems are facing increased criticism when embarking on a merger. In fact, government, internal staff, and public scrutiny are at an all-time high, with perceptions that bigger isn’t better. Preparing to communicate the announcement of a merger and acquisition is a big endeavor — one that requires constant collaboration with the organization at the other side of the table. At Revive, our deep expertise in mergers and acquisitions — leading communications for a number of the top 10 largest mergers by revenue seen nationally in the last three years — enables our clients to announce mergers amidst an increasingly controversial environment. Here’s how we help our clients combat the anti-hospital narrative and position health systems in a strategically favorable light.
1. Start with staff.
Internal audiences are one of the most critical groups to gain buy-in on transactions — and one that can make or break the external perception of the deal. To adequately anticipate internal response, reach them early and reach them often. Provide them with genuine opportunities to ask questions and share their feedback. Tell them before they hear about it in media. Because staff access information across multiple care and corporate settings, offer them diverse methods to get information and share their concerns. A successful consolidation communication strategy will alleviate the concerns of internal stakeholders who may be reluctant to the merger. Finally, build trust by being clear and consistent. This audience has the potential to be the most impactful audience externally, given the role they play in the communities that they serve.
2. Tell your story — first.
Share your perspective before someone else does. When a deal is first announced, this is the first and only time you have an opportunity to define the impact and benefits before critics work to discredit the deal. Systems must use this first move advantage. By defining your narrative before others have the chance to, you insert control over the story. Clearly define why this partnership is not only necessary, but beneficial to staff and the communities that you serve. Discuss how it will protect or even expand access and jobs. Better yet, anticipate what your opponents will say and prepare to address their concerns proactively. Directly refute the common criticism that costs will go up and quality will go down as part of your announcement messaging with specific proof points of the value of the partnership.
3. Find your friends.
This is the biggest challenge we have with our clients when announcing deals: finding third-party community leaders, business associates, or policymakers to advocate for the importance of the deal shortly after announcement. Most systems frankly have not spent the time and energy to align with advocates and complete robust stakeholder engagement strategies. The time to do that work is not in the days and weeks after an announcement — it is in the months and years before an announcement to build those strategies. To ensure credibility of your position, it’s essential to garner external support. Health systems that spend the effort to develop relationships with third parties — and who prepare them to vocally advocate for the merger — are the organizations best set up for success when announcing a transaction.
4. Make it real.
In the wake of likely internal or external criticism, establish pride in the transaction by making it real to your stakeholders. Focus on the benefits that a merger will bring, including job protection, growth opportunities, new technology, and expanded access to care. Get into the details of these benefits and specific plans for investments that will improve the organization, patient experience, and community partnerships. Explain these benefits using real-time examples that patients, staff, and third-party stakeholders can understand. When in doubt, answer the question, “What does this mean for me?” for each audience you need to communicate with. By clearly outlining the benefits and making the situation applicable to them, you increase your chance of internal and external buy-in.
When it comes to communicating a merger, there’s no such thing as too much preparation. Be on the offensive here. Craft a narrative that demonstrates the brand benefit for patients, staff, and the community. Don’t be surprised at different stakeholders’ responses. Anticipate challenges and delays, clinician complaints, and union demands. Prepare for policy changes, market dominance criticisms, and even anti-trust challenges. These are all scenarios that health systems should anticipate when a deal is being announced. We have yet to meet an organization that regretted spending the time to prepare for a deal months before it is announced — and this includes transactions that ultimately were never announced. Without proper preparation, you will be caught flatfooted and increase the likelihood of reputational criticism.
The current perception of hospital mergers and acquisitions means that organizations often face criticism at the wake of a deal. But by strongly communicating and addressing the five steps above, you are setting your organization up for success.
Want to talk more about our learnings and work in this space? Contact Ryan Colaianni.