To realize maximum value from an M&A or partnership, it is important for C-level executives to start thinking about data integration early. All the data collected about the individuals served is among the most valuable assets of any healthcare organization. And, once collected it is critical that data be integrated. Data is worthy of focus, energy, effort, and investment to closely manage.
Data in your M&A—First thought, not afterthought
Integrating your data is critical, and fundamentally helpful, when done right
DB: The high value of data isn't a new concept for day-to-day operations—yet as more organizations enter into partnerships and mergers, in my observations with leaders at healthcare systems, valuing data in the transaction is too often an afterthought. In such instances, leaders come to this conclusion after the acquisition, during post-merger goal assessments. Without a data integration strategy and readily accessible data, they won't be able to answer the board's strategic questions about whether the new partnership or organization is achieving synergy, efficiency, and scale goals.
DB: What I have often seen is that decision makers rely heavily on the finance and operations teams to build the case for an acquisition or partnership. As a consequence, those groups focus primarily on tangible items they regularly track like labor, supplies, and facility costs. IT and analytics leaders don't always have a seat at the negotiation tables and aren't included until later when IT integration planning begins. By then, it is too disruptive to the deal closing for them to bring data valuation estimates to the discussion.
To fix this problem, CEOs should absolutely bring IT and analytics to the table upfront.
DB: In theory, although it should be possible for us to see how two combined organizations are performing using financial and operational metrics that were part of the valuation, all too often I hear of situations when leaders realize the hospital they acquired has a different EMR than what they are running, or they discover that the hospital has different systems for accounting, labor productivity,
patient satisfaction, or supply chain.
Then those leaders are left with few options. Either they integrate everything into one system or rip and replace the dozens of systems with something entirely new. A rip-and-replace approach is costly and time consuming. The sticker shock leaves them wishing they had invested in building a data integration strategy.
DB: First, I would recommend that CEOs, CFOs, and CIOs, start thinking about the data they will need to help them achieve their strategic mission and goals in the early stages of assessing a potential merger, acquisition, or partnership. Also, a better understanding of the value of the data they are considering acquiring is critical to long-term success.
Second, they should reframe the way they think about integration to include data, and realize that in many cases they don't have to rip and replace source systems in order to achieve data integration. Rather, they should integrate the data into a data platform. That still allows them to operate with a variety of source data systems while still having an integrated data layer that makes data broadly available for a variety of clinical and business use cases more affordably and efficiently than a rip-and-replace alternative.
And third, I would recommend a fundamental paradigm shift to recognize the increasingly large and strategic value of data as an actual asset in the combined organization. And they should have a steward looking after that important asset, whose expressed role is focused on ensuring that the organization is leveraging that data so that they can really drive success and improvement at their organization.
To learn more about Health Catalyst, please visit www.HealthCatalyst.com/ModernHealthcare.