If you think you've had your fill of mega-mergers between healthcare organizations in 2014, just wait for 2015. Hospital deal volume has been steadily rising since 2009, according to global consulting firm PwC. And in 2015, experts say we'll see also growing number of shared-risk partnerships form between healthcare groups, including accountable care organizations (ACOs), in addition to big-name takeovers.
Yet all of this activity raises questions about technology and the role it will play when organizations of different sizes fuse into one big behemoth.
Among the biggest merger-related challenges is that of combining technologies so information such as clinical data and financial transactions travels seamlessly and securely between different systems. A second challenge is managing the cost of doing this—and there's already a growing body of evidence that mergers end up increasing costs substantially.
"Even if administrative processes are automated, organizations utilize different systems that are incompatible and operating in disparate, heterogeneous environments," says Chris Seib, chief technology officer and co-founder of health IT company InstaMed. "In the healthcare industry, there's a lack of standardization across transactions, which results in manual and error-prone data exchanges."
Bill Baker, an advisory partner who oversees transactional services in the healthcare and life sciences practice at KPMG, agrees that interoperability between healthcare organizations using different systems is a key issue, closely followed by the need to address data security.
"A HIPAA violation could undo some of the anticipated synergies from any deal from a legal, a financial and a public relations standpoint," says Baker. "Also, some hospitals are addressing meaningful use of electronic records and may have different approaches that need to be reconciled. The same can be said for ICD-10 compliance."
As such, healthcare organizations need to be mindful of many technology-related issues when considering any type of partnership in today's day and age. But one thing that may get overlooked is each organization's respective culture, and how that affects each party's approach to health IT.
For example, "an academic center may have an approach that looks to more experimentation and clinical trials than a community center," says Baker. "Some hospitals have different approaches to quality and the degree of openness about discussing it, so providers need a deeper of a look into the culture of care, as well as the administrative approaches of each organization."
Organizations should also consider whether technology-related savings—in addition to savings on marketing, administration, HR, or other functions—can be derived in an alliance, he adds.
From a technical/infrastructure standpoint, Ryan Pelerin, founding partner and COO of website migration services provider WSM International, says one place to begin is determining what type of server environment you have and what type you need.
"First, figure out are both organizations operating on the cloud, a physical server or a hybrid of both?" Perlin says. "Next, assess the technical needs of the merger. Do the organizations have the technical expertise in-house to undertake the merger or do they need to secure an outside service provider? Lastly, organizations need to ensure that all of their web and data assets are documented."