Healthcare Acquisition: What Practice Owners Need to Know

A healthcare acquisition brings together two health systems in the hopes of reducing costs, strengthening resources, or even expanding access to patients. Hospitals, pharma services, and insurance providers can be impacted by healthcare mergers and acquisitions, but the impact on smaller physician practices is especially notable. 

It’s not just medical offices that are subject to these changes. Dental practices, optometry clinics, and even veterinary offices are seeing a growing number of acquisitions due to various market factors. If you’re planning to acquire a smaller practice or let a larger health system acquire yours, consistent communication will make for a smoother transition. 

Discover the steps you can take to guide your patients through this process without compromising your healthcare delivery. In this guide, we’ll also explore the innovative technologies that support practice owners amid ownership changes. 

What is a healthcare acquisition?

Mergers and acquisitions aren’t uncommon within the medical and pharmaceutical industries. When two healthcare organizations merge, they become one entity. However, if one acquires the other, it will assume control and ownership of the separate entity. 

These deals can either impact a single location or multiple different settings. For instance, an independent physician’s office may look into being acquired by a larger health system for greater financial stability. Another deal could involve a metropolitan healthcare group acquiring various rural hospitals. 

While acquisitions can be beneficial for both business development and long-term value creation, they come with plenty of challenges. Expect them to affect everything from staffing and systems to branding and patient communication. Many healthcare providers going through this process will see plenty of changes to their day-to-day operations long before the new ownership becomes final. 

Why healthcare acquisitions are increasing among independent practices

The healthcare sector is seeing a growing number of acquisitions of independent practices. Many providers seek out strategic partnerships with other health systems for various reasons, including:

• Financial pressures: If a small practice is struggling to hit its financial goals, finding new ownership could be the ideal solution. 
• Staffing challenges: An understaffed office may benefit from a healthcare acquisition in which the new owner takes charge of staffing. 
• Patient access: Acquisitions may enable more patients to gain access to quality care, depending on the health system that assumes ownership. 
• Succession planning: Many providers planning for retirement don’t want to see their practice close. Instead, they start looking for new owners to take control of the operations. 

Once the deal goes through, many providers find that a change in ownership brings increased access to technology, including marketing and patient engagement tools. 

Key stages of the healthcare acquisition process

Any entity within the healthcare industry undergoing an acquisition needs to do its due diligence. The process can be complex and create confusion. Here’s how you can mitigate these challenges:

• Pre-acquisition preparation: Assess and document key aspects of your day-to-day operations, including the digital health systems used. 
• Transition planning: Map out how operations will move forward after the deal goes through. This primarily centers around staffing changes and training, as well as patient communication. 
• Workflow adjustments: After the acquisition becomes final, expect some changes in workflows. There may be a particular emphasis on scheduling and billing processes. 

Embrace different technologies to make the transition a bit smoother. Deciding to incorporate certain technologies early, such as a new online scheduling tool, can reduce disruptions later. 

Operational risks during a healthcare acquisition

Whether you’re dealing with a major hospital acquisition or ownership changes at a small, independent practice, the process could have a negative effect on operations. This is especially likely if you rely on fragmented communication systems. Some of the biggest pitfalls include:

• Appointment disruption
• Missed follow-ups
• Delayed billing

All of these problems can impact your bottom line and hurt patient trust. To minimize operational risks, you must prioritize consistent messaging. Using a unified system enables you to take control of patient outreach in addition to things like scheduling, billing, and collections. 

The role of communication technology in acquisition success

As much as a healthcare acquisition affects practice owners and their staff, it can have an even bigger impact on patients. Rather than focusing solely on revenue or cost efficiencies, you need to ensure continuity of care for your patients. Weave’s communication platform will help you stay connected with patients during the transition and maintain their trust. 

This unified system has all of the features that practices need for successful operations, including phone logs, text reminders, payments, and digital scheduling. You can even automate review requests and track every review of your service offerings. 

Keep delivering superior healthcare services with centralized communication solutions. Use these tools for consistent messaging, and you can soon see a steady revenue flow and an increase in patient satisfaction and retention. 

If your practice undergoes staffing changes due to an acquisition, training new administrators will be a breeze with an all-in-one system. Investing in the right technology will make a huge difference when your practice faces new ownership. 

Preparing a practice for acquisition or transition

You could be selling your practice to prepare for retirement, overcome financial distress, or even improve access to care. No matter what motivates your decision, a pending healthcare acquisition can go much more smoothly with adequate preparation. Experts recommend these tips:

• Strengthen your communication workflows: Prospective buyers often base their healthcare investments on a practice’s value. If yours is lacking in terms of patient communication, you may struggle to find a buyer. 
• Document your processes: Buyers will want to know how efficiently your office runs. Document vital aspects of your operations, such as scheduling, follow-up communication, and billing. 
• Explore modern tools: You may be able to lower costs and reduce your dependency on individual staff members when you implement modern communication tools.
• Track your financial performance: When buyers evaluate medical practices, they often want details about revenue, overhead costs, and more. Monitor these metrics to give them the whole picture. 

Every situation is different. For instance, you may get a lower offer for your practice compared to those in other markets. However, implementing these tips should put you in a better position to sell. 

Healthcare acquisition from the buyer’s perspective

According to a recent Yale study, hospitals are one of the biggest players in the acquisition of smaller practices. In fact, the report found that hospitals owned roughly 47% of all private practices in the U.S. as of 2016. 

Whether you’re considering handing over your practice ownership to a nearby hospital, an associate, or even a private equity firm, you need to understand what drives their investment decisions.

Some of the biggest factors are operational efficiency, patient retention rates, and communication consistency. Your practice might not be seen as high value if your daily productivity suffers, you don’t have effective communication measures, and you struggle to build lasting relationships with patients. 

Many buyers also look for practices that have already adopted digital systems. This allows them to scale the healthcare system to their needs, which is crucial during and after the acquisition. If a practice uses a centralized system, this is even more appealing to buyers, as it simplifies onboarding and supports standardized training. 

Maintaining the patient experience during ownership changes

Selling your practice can trigger anxiety and confusion among patients. Despite the complexities of your healthcare acquisition, you must remain focused on delivering excellent patient care. Preserving patient trust and engagement is essential during the transition. 

Prioritize communication at this time. Sending appointment reminders reduces the risk of no-shows, allowing providers to explain the next steps in person. Offering two-way texting services keeps an open line of communication, which improves the overall patient experience. 

Don’t forget about billing transparency. Satisfied patients always know what to expect when it comes to healthcare costs. If you remain open and honest with them about billing and payments, it helps establish loyalty and trust. 

Combine all of these measures with a confident staff, and your practice will successfully produce a positive patient experience. 

Next steps for practices navigating healthcare acquisition

Whether you’re considering selling or are in the early stages of a healthcare acquisition, communication is vital going forward. Guide your staff and patients through the next steps with the help of Weave. Our centralized communication platform makes healthcare operations much smoother and may help boost your practice’s value. 

Are you ready to see how this system can support you? Request a demo today to get started. 

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