Each healthcare merger and acquisition transaction is different. One size does not fit all when it comes to consolidating practices, hospitals or other types of healthcare facilities – especially where technology is concerned.
In his article “Post Merger Best Practices for Healthcare Organizations,” John Hesselmann details several EMR technology transition best practices to help navigate mergers in the most efficient manner. He recommends establishing what success looks like by defining measurement benchmarks as well as being transparent and assigning accountability. Hesselmann also recommends thinking long-term about technology.
“When making a decision, examine the lifecycle of the present IT systems of the two companies, as well as what the costs will be to maintain two separate systems vs. upgrading to one system,” writes Hesselmann. Because of the multitude of transitional challenges and costs inherent with a merger, it can be easy to put the technology decisions off. But, doing so may cost money and liability in the long-run.
The cost of technology in a healthcare merger
Technology is expensive. It’s not just purchasing new equipment but the cost to maintain and administer hardware and software as well. In the case of a merger or acquisition, EMR technology is often inherited from the newly-joined entity. Suddenly, the cost of maintaining two systems hits the bottom line. Many healthcare organizations find that the most cost effective solution is to consolidate the infrastructure, implementing a single enterprise-wide solution for providers and staff. Data from the legacy system is then often migrated to a health care archive for long-term storage of protected health information to meet medical record retention requirements.
The liability of technology in a healthcare merger
As it relates to record retention, mergers and acquisitions also often present an opportunity to evaluate liability. Many compliance officers overlook how technology can contribute to liability, especially the way in which patient or employee records are stored long-term. There are risks and costs associated with storing records on a legacy system for the long haul. If the legacy system fails or the maintenance contract is allowed to lapse, then patient or employee records may not be available to access if requested during litigation. This may result in a settlement that could’ve otherwise been avoided had the proper data been provided. By considering the liability issues in technology decisions during the merger process, providers can reduce both the stress and financial impact of potential litigation issues.
One of the biggest mistakes that healthcare organizations can make during a merger or acquisition is to minimize, delay or ignore evaluating the impact of technology as two entities and system environments are consolidated into one. While it may seem that keeping a legacy system up and running as an archive is the most convenient solution, it is essential to consider the long term impact of that decision on cost and liability. Many CIOs explore extracting data from one system and migrating key elements to the go-forward system. They then store the balance of the historical records in a separate archive solution. This allows for easy access to patient or employee records long-term for e-discovery. By taking the time at the onset of the merger to evaluate technology, healthcare organizations can save time, money and headache in the future.
How is your organization handling legacy healthcare systems in its IT portfolio? Does your M&A team have a strategy for handling the consolidation of technology when a practice or hospital merger occurs?