Mergers and Acquisitions
Reaching for scale? Combine quickness and care to build value.
Scale is more important for health plans than ever. Much of the market is shifting to public-sector payment structures—including Medicare, Medicaid and health insurance exchanges—where having the capacity to compete is important. And it’s hard to come up to speed, fast enough, without turning to third parties—to form alliances or to combine outright.
That’s why it’s no surprise health plans are engaging in M&A at a fast pace. But knowing you have to consolidate is only the beginning. It’s just as important to know what you aim to achieve, how to make it happen and what pitfalls are waiting. Health industry leaders have turned to Deloitte to help navigate their most complex, critical transactions. Our teams aren’t just M&A specialists. They’re health care M&A specialists, versed in your business, who support deals throughout the full lifecycle.
Before you start screening potential partners, you need a solid strategy. Once the deal is done, you need to look beyond integration and synergy capture, through to eventual divestiture. Businesses engaged in M&A have to be careful with finance, IT, talent and the melding of cultures among other concerns. But health care adds angles like care coordination, reimbursement structures and regulatory compliance. When you operate in the health arena, you have more reasons to pursue M&A—and more moving parts to get right.
The expected benefits of a strong M&A strategy may include synergy opportunities related to integration strategy, revenue growth, operating expense savings, asset efficiency and the cost of capital reduction. More importantly, the right approach can help improve the value of the new company—a major issue, according to a recent Deloitte study of 44 transactions between 2006 and 2012 that found that fewer than half of the deals led to sustainable improvements in market value three years after the deals closed.
- Billing and coding
- Human capital
- Information systems
- Core operations
- Regulatory and compliance
|Ollie McCoy, Partner, Deloitte Consulting LLP|
|Philip Pfrang, Partner, Deloitte & Touche LLP|
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