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Q: Have you had any experience with merging clinic PFS and hospital PFS functions and leadership in larger systems?

Patient Financial Services Weekly Advisor, April 16, 2004

A: Mergers are always challenging whether they are between large or small entities, geographically dispersed, commonly located, or any combination of these factors. Here are some characteristics of successful mergers and tips on how you can help ensure success:

Aggressively planned and carefully executed consolidation. Planning needs to take place at all levels of the organization, including PFS. Change-management procedures should be included and input and participation in the planning process should be encouraged from all levels of the PFS department from both entities.

Accurate identification of--and effective interaction with--potential winners and losers. Not all stakeholders will welcome or benefit from the merger. Consider the winners and losers (along with estimated wins and losses) and develop a plan and process to address stakeholder issues that could include potential layoffs or service-line discontinuations.
 
Accurate identification and estimation of cultural differences. Cultural differences and the obstacles they create are probably the hardest to identify and the quickest to derail merger attempts. Take great care to accurately estimate the differences and carefully plan how to address them. PFS managers should observe and experience both cultures and determine an appropriate plan.

Management with necessary skills to achieve cost savings and address resulting operational inefficiencies. A primary reason for mergers is to gain operational efficiencies, and careful consideration needs to be given to service line impacts. PFS managers play a critical role in this area. Be sure to conduct a detailed financial analysis to determine what areas will be affected and to what extent. Do you have duplicate services? Will services be reduced or eliminated? What impact with this have on revenue? Collections? PFS managers should develop indicators to monitor this area and report to senior management.

Effective and appropriate internal and external communications. Don't expect stakeholders to read your mind. Take the time to develop a communication plan that is flexible, consistent, and continual. Target audiences should include patients, employees, physicians, community leaders, the public, etc. Target your communications to the appropriate audience and ask for input and feedback. Participation builds buy-in. PFS leaders should develop communication plans for their areas and scripts for the staff to use to communicate with customers. Be sure to clearly emphasize the benefits of the merger and resulting changes and deliver what you promise.
 
Accurate anticipation of market forces that will impact the success or failure of the merger. Inevitable layoffs will affect local employment rates, service-line changes will impact care available to the community, patients may change facilities, and the competition may promote a campaign of distrust. Awareness of market forces and constant monitoring and adjusting for these forces is essential. Consider these in your planning and performance metrics.

Constant monitoring and adjusting of key merger indicators derived from the characteristics noted above. Performance metrics will provide the information necessary to monitor the success of the merger plan and allow management to make adjustments as necessary. PFS leaders should develop and monitor metrics for their areas and provide that information to senior leadership. Sample metrics might include revenue and collection metrics before, during, and after the merger, staff satisfaction, customer satisfaction, and service-line volumes.

This question was answered by PFS Advisor editorial advisor Amy Hartt, MBA, senior manager, revenue cycle services, CampbellWilson, LLP, Dallas.

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