3 Keys to Successful Medical Imaging Mergers & Acquisitions

2016-02-09
 

Medical imaging business merger handshakeAs hospitals work to lower costs while providing the type of high-value imaging services sought by patients, many are merging or partnering with independent imaging centers or other hospitals. As with any type of merger and acquisition (M&A) activity, the devil is in the details. Without thoughtful preparation of the current imaging department and an in-depth analysis of what’s being purchased, hospitals may not achieve the goals set out for the merger/partnership.

There are three main areas where mistakes tend to be made:

1. KPIs are not thoroughly examined. It’s critical to have multiple sets of eyes examining every aspect of an imaging center you’re acquiring or a department you’re merging with. Often, the M&A team focuses solely on the financial aspects of the imaging service, which doesn’t tell the whole story. Instead, make sure someone who understands all aspects of running a successful imaging service performs a detailed examination of the new service’s key performance indicators (KPIs). Common KPIs include: turnaround times (TAT), work relative value unit (wRVU), claim denial rate, and referring physician satisfaction indicator. Check that performance and other measurements have been taken accurately and that you have an in-depth understanding of the service’s current levels. Otherwise, you’ll have no way to measure improvements stemming from the merger. Worse, you may find yourself with a service that is suddenly losing customers, has a group of dissatisfied staffers, or has a number of providers who are not as productive as you expected.

2. Time to value is not correctly predicted. Executives without a strong understanding of imaging technology tend to underestimate the cost of moving, storing, and securing images. This can lead to an inaccurate prediction of the time it will take to gain full value from a newly acquired imaging service. Those who understand imaging technology and storage costs know it can take considerable time and money to achieve full image accuracy and accessibility when departments merge.

3. The need for robust change-management is underestimated. The impact on everyone involved in a merger or acquisition is significant—and frequently overlooked. Productivity levels are likely to fall ‑ especially in the clinical work flow, turnaround time and quality program areas. Preparing your current imaging department to acquire or merge with another is as important as any step in the process.

Solutions that work

How can you avoid the errors just described? Our long experience with customers considering mergers or partnerships has established scenario planning as the most effective tool.

At its core, scenario planning is about asking the right questions. For example, do your physicians truly understand the business of imaging? They might be so focused on the clinical aspect of their jobs that they don’t. That’s not necessarily a bad thing, but to successfully merge or create a partnership, they may need a better grasp of the business side.

There are important questions to ask on the process and technology side as well. For example, after the merger, who is going to acquire the image, how will it be read, and when, how and to whom will it be presented? Similarly, how will imaging data move securely through the system? Asking that question can help bring IT into the conversation early, while there’s still time for them to provide important insights.

  • Analyze data-related risks (data integrity, data storage, data value)
  • Analyze staffing plans (current vs. planned)
  • Identify potential post-merger growth opportunities
  • Confirm projected cost savings
  • Suggest pre- and post-merger process improvements

Attention to (the right) details will help ensure your department gains all of the intended benefits from any merger, partnership, or acquisition. For more information on how to partner with McKesson for these services, contact us or read about how our medical imaging consultants can enable a smooth transition into a new merger or acquisition. To learn more about the past, current and future state of medical imaging, download your copy of our eBook, Advancements in Diagnotic Imaging: Past Milestones to Future Possibilities.

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