Employing a physician group is a very complex task and can be daunting even for the most robust healthcare system. Stakes are high, and if the employment process breaks down the relationship can be changed forever, often in negative ways. While each opportunity presents unique challenges, we have found successful acquisitions driven by these four critical actions:
· Work with the physician practice to develop the vision and goals of the new relationship.
· Establish an action plan of due diligence and transitional steps (by both parties) to move through the transaction, with important milestones and agreed-to target dates.
· Have in place a transaction leader from each organization to drive the process and make the critical decisions that will be needed.
· Ensure key physicians within the group are actively engaged throughout the process.
Lay Out the Vision
At the outset, the parties should meet to discuss the vision and the goals of the new entity. Understanding why the deal is important to each party and developing a shared vision and goals creates the platform for the teamwork that will be required to bring about a successful relationship. Failing to establish a shared vision can result in parties questioning the importance of the transaction, which could kill the momentum needed to complete it.
Set the Path
It is important that leadership of both parties meet at the outset to discuss the process and timeframe for completing the transaction. An action plan of due diligence and transitional steps should be formalized, with responsible parties, key milestones and target dates defined. Having those steps and dates laid out in advance provides motivation to move the process forward, as well as serve as a tool by which to track progress. Failure to establish a definitive action plan can lead to process breakdown, with the lack of milestones and target dates creating the sense that the deal may never be complete and, worse, that there is no pressing need for team members to accomplish the critical steps needed to move the process forward.
Tap Project Leaders
It is critical that each party taps an individual to take full leadership of the project for his/her respective organization. The project leader is responsible for making sure the process moves forward. This means meeting with internal team leads to discuss progress, as well as meeting with their counterparts regularly to discuss any items that may be slowing down progress. The project leader is also responsible for reporting to upper management with regular status updates.
Failing to tap a skilled project manager can lead to numerous issues that can kill the deal. First, with no internal authority figure to hold team leads accountable for meeting deadlines, the process bogs down and can result in steps having to be repeated, particularly as relates to due diligence, at increased cost and frustration, and perhaps derailment.
Second, without a champion, there is no one to provide the centralized message of why the deal is important and the motivation to keep it moving forward. Finally, it is critical to have leadership with the authority to make the decisions required throughout the process and serve as the catalyst to help the parties work through the inevitable challenges that will arise.
Engage Key Physicians
Finally, it is imperative that key physicians in the practice are actively engaged in the process, from the outset. This means more than just helping to lay out the vision and goals of the organization.It is critical that a key group of physicians also be able to attend any meetings that have bearing on the transaction. Keeping them involved also provides another leadership source to keep the transaction moving forward. And physician involvement will ensure that the opinions and concerns of the group remain a priority as the financial and operational details are considered.
Keeping physicians engaged in the process may seem obvious, but it is not unusual for physicians to prefer an arm’s length approach, particularly to the operational side of the deal. However, when the physicians aren’t involved, divergent expectations and understandings will be created with messages lost in translation. Instead of the physicians hearing firsthand the reasons why certain issues have or have not been resolved, they hear it second hand. This can mean that critical details are not communicated, with uninformed opinion taking the place of facts.
It is also important to consider which physicians to involve and how they should be involved. Leaving a key physician out of the loop can lead to a bruised ego and potentially create a deal obstructionist. Conversely, if you include too many physicians in the process, you could run the risk of the physicians taking over how the deal proceeds, with each key item remaining unresolved until they, as a group, decide on an action. This, obviously, would cause the deal to slow down and, potentially, for the overall costs of doing the deal to spiral out of control.
The benefits of a solid employment relationship can be significant.
And, while that relationship will be in its infancy at transaction completion, the transparency and directedness of the transaction process will set the stage. Applying the four steps above will increase your opportunities for success.
For more information or assistance with your practice acquisitions, call us.