"Still, there’s often confusion about who is caring for the patient ... " Playing off of Jimmy the Greek's comment,…
I’ve been thinking a lot lately about market consolidation. Mr. H always captures the movements: Teladoc Health is acquiring InTouch Health, SCI Solutions is acquiring Tonic Health, and MTBC is buying CareCloud.
Sometimes competitors buy each other, but the strategy can be somewhat murky. Are they trying to get better technology to improve their core product? Or are they trying to consolidate market share? Other times companies are buying specific pieces of technology that they lack in an attempt to stop the bleeding of customers going elsewhere for a more complete offering.
I’ve consulted for vendors during these acquisitions. My favorite type of engagement is helping the potential buyer to perform the due diligence around the potential purchase.
Usually the target company is keen on being purchased, so they are reasonably willing to get you dig around as much as needed. Sometimes, though, they may occasionally put obstacles in your way to keep you from figuring out how weak their product actually is compared to its marketing.
I worked with one vendor who thought they were getting a niche EHR that would complement their existing offerings. Unfortunately, they missed the part where that niche EHR really didn’t have a practice management system. Without the ability to bill for services, providers aren’t going to be thrilled with the fact that they’re going to have to buy a separate billing system and then try to mesh them together.
I say they “missed” the part where there was no billing system with some sarcasm. Of course they knew it was lacking, but chose to ignore it and hoped they could find enough gullible customers to come on board. Along with other members of the due diligence team, I was able to convince them they should take a pass, which hopefully saved them (and their potential customers) a good deal of heartache.
I’m interested to follow along as Teladoc Health purchases InTouch Health. I do believe that given our current culture and people’s desire for convenience, along with the need for providers to try to manage more patients more efficiently, virtual care is going to move to the forefront of healthcare.
The existing paradigms will continue to evolve. Hospitals that don’t have experts in a given subspecialty can contract with providers hundreds of miles away to provide care for their patients. Intensive care units can hire virtual teams to not only help manage patients after traditional business hours, but to review treatments and care plans as an extra set of expert eyes to make sure the best care possible is delivered. Patients can interact directly with their providers in a more efficient manner, saving the time needed to drive to an office and wait for care. Although these service lines already exist, more organizations are going to embrace them, and those that are already working in this manner will continue to evolve.
Teladoc Health already has the direct-to-consumer piece, and InTouch Health has a pretty solid institutional platform. The announcements focus on this, calling out the new company’s ability to manage patients longitudinally from the home setting to the intensive care unit. Regardless of their strengths and weaknesses, there will have to be a great deal of digging by teams on both sides to figure out exactly how their technologies might be able to work together vs. how much work will be needed to bring them together.
I worked with one vendor who had an EHR and a practice management system built on the same database platform but using different programming languages. As they tried to bring them together, they ended up halting all development on one side of the house while they rewrote the application to play nicely with the other side. The budgetary impact was significant, and it also caused the project to lose momentum. Eventually they got everything on the same page, but the product still died on the vine.
Many who have never been through the process of trying to bring disparate products together don’t realize what a long road it will be to seamless interaction between the direct-to-consumer offering and the in-hospital solutions. I love that kind of work – figuring out what can be kept, what needs to be refactored, and what might just need to be started over again from scratch in order for everything to work as intended.
In order to be successful, the various teams need to leave their egos at the door and focus on the end result, creating something new that will be greater than the sum of its parts. Sometimes, though, there isn’t enough budget allocated and the organization fails to address cultural issues, so what results is a shadow of what it might have been.
I have friends working at organizations that have struggled while trying to bring acquisitions together. One team worked for nearly two years to try to integrate the solutions, only to finally give up and demand that customers of the smaller vendor migrate to the larger vendor’s platform. Another team hurried to bring customers live on a shiny new tool they had purchased, not realizing that it wasn’t HIPAA-compliant until they started seeing unanticipated outcomes for what should have been routine workflows.
Of course, there is a negative impact on customers and their patients. These scenarios are also accompanied by declines in morale for the people doing the work. Sometimes key players will even leave because they don’t feel their opinions are being respected and they see their pride and joy being dissected during the process.
I hope that the companies involved in these acquisitions reach out to professionals to help manage the “soft” issues involved in bringing large teams together. From experience, they would likely benefit from an objective analysis and guidance in how to make everyone feel appreciated and to reduce the fear of being downsized or pushed aside. Most companies don’t do this, and they ultimately reap what they sow as the integration becomes increasingly difficult and the conversations more contentious. Some of the recent mergers and acquisitions in the healthcare IT world seem to be healthy, but others seem to be under a bit of duress.
Have you been through a merger or acquisition? Do you have advice for the impacted employees? Leave a comment or email me.
Email Dr. Jayne.