Organizations pursuing consolidation seek to leverage economies of scale in order to reduce costs, gain a competitive advantage, and increase revenue. Recently, the number of health system transactions hit its highest level since this data started being collected in 2000.
While this trend shows little signs of slowing, hospitals and health systems are becoming more discerning both about who they partner with and how they integrate after a transaction. Policy and procedure management systems feature prominently at both of these critical junctures.
Here are 5 things to know about the role these systems play in the M&A process:
1) The traditional approach to policy and procedure management is obsolete
At one time, all hospitals maintained their policies inbound hard copies tucked away in somebody’s office. More recently, hospitals have shifted away from this Stone Age approach and now take advantage of digital services like shared drives, files sharing applications, and other homegrown software systems. However, even these systems have limitations that can spell delay, unnecessary costs, and non-compliance—not to mention an increased risk to patient safety.
A modern enterprise policy and procedure management platform is automated, web-based, and has these five characteristics: 1) it ensures secure but widespread access to proprietary policies, 24/7, for all applicable staff; 2) it clearly identifies and makes shareable, the most up-to-date version of each policy while also retaining historical changes; 3) it links to appropriate industry-wide standards or other external policies in any area where the hospital has not developed its own guidelines; 4) it has dynamic customizable workflows that can be set up to meet the specific requirements (such as attestation) of your organization, and 5) it integrates smoothly with existing systems and eliminates inefficiencies like delaying new staff training to locate onboarding documents.
2) Obsolete policy management is a sticking point for M&A negotiations
M&A negotiations require acquirers and acquirees to complete a full, top-to-bottom self-assessment that takes into consideration every aspect of their current operations. (Interestingly, a similar process is required of hospitals converting to a modern web-based enterprise policy and procedure management platform: they have to identify the most up-to-date version of each policy or procedure and assign an owner or set of owners for each one.)
Compliance due diligence is one aspect of M&A negotiations; potential partners or acquirers must identify and evaluate minor compliance infractions as well as any major missteps (such as improper coding leading to an overvaluation of the organization). Failing to complete this process can lead to consequences ranging from legal suits and fines to the erosion of consumer confidence and trust. It can also, of course, spell the end of a prospective deal.
M&A negotiations require compliance due diligence and compliance due diligence relies on policy records. A comprehensive and easily queried policy and procedure management platform is thus an invaluable asset during any M&A negotiation.
3) After the merger: communicating how the new organization should operate
Automating current ways of doing business is a crucial step before any expansion takes place. For organizations that are doubling and tripling their staff as well as their patient intake, though, automation is essential. Producing more binders, finding places to store them, and then manually updating them as policies evolve is no way to scale healthcare operations. Instead, expanding health systems should use their accessible, up-to-date policy and procedure management system to train staff effectively: orienting and onboarding new employees quickly, of course, but also modeling how staff can use the system (which might be new to them) on the job.
Particularly when policies are new to staff and procedures unfamiliar, the organization’s employees and representatives must have access to the right information at the right time. These times include during patient care when engaging in a new contractual relationship with a vendor, or entering into a business relationship with an associate or new medical staff. Getting everyone on the same page helps with morale, employee satisfaction, and organizational cohesion as well as a host of quick savings and long-term benefits.
4) After the merger: the immediate benefits of modern policy management
Disbanding manual labor-burdened policy and procedure management processes translates into immediate and direct cost reductions. These savings stem from:
– Centralizing and consolidating policies and procedures system-wide
– Improving overall operational efficiencies
– Reducing the overall costs associated with printing paper
– Avoiding the need to store hundreds of binders (as well as the costs of maintaining those storage facilities),
– Eliminating the labor hours spent tracking down documents;
– Eliminating the labor hours spent manually updating hundreds of binders when new policies and procedures must be printed;
– Mitigating the risk of front-line staff referring to old policies;
A second-order effect is to reduce the human error associated with manually updating binders such as putting policies in the wrong locations, failing to make the appropriate updates, or forgetting to put new policies in the binders. Because these errors take on an outsized importance when they occur after a merger or acquisition—reflecting negatively on the wisdom of the consolidation, for instance—hospital leaders should work diligently to avoid them.
5) How modern policy and procedure management improve performance over the long-term
Cloud-enabled, web-based policy management platforms have obvious implications in areas like workflow and efficiency, especially after a consolidation. But having access to updated policies also has a meaningful impact on patient care. This access empowers frontline clinical staff and physicians with critical information such as recommended treatment processes, patient engagement procedures, and other valuable information. In fact, some of the greatest contributions healthcare enterprise policy and procedure management solutions have made are in the areas of patient safety, quality of care, and accreditation readiness.