Tom Ewers and Munzoor Shaikh of West Monroe Partners discuss the ins and outs of pre-close integration planning for health care payer mergers and acquisitions.
The M&A process should begin by clearly defining both the acquisition strategy, type of acquisition (Leverage Business Model (LBM) or Re-invent Business Model (RBM)) and the overall approach to integrating the two companies. Acquirers should then hone in on which consolidation and collaboration opportunities need to be pursued to generate the expected benefits. Then, they should define a clear investment thesis and operating model to help formulate the integration approach, thus completing their pre-close homework.
Next, payers should transition to the operational and IT diligence steps within the integration lifecycle. These efforts begin by building a diligence and integration team with expertise in a number of different disciplines that cover the target organization’s key capabilities and represent stakeholders from the potential acquirer.
As the strategy and pre-close phases come to an end, initiating pre-close integration planning is the next step to reach a successful transaction outcome. This is especially important for payers because not only do they tend to have specialized claims processing, but also there are various new requirements and forces at play today given the advent of the Health Insurance Exchanges (HIX). Plan early to provide clear “Day-1” direction and to set stakeholder expectations.
In several posts, Tom Ewers and Munzoor Shaikh of West Monroe Partners discuss the dynamics of health care payer mergers. Here, they describe the need for comprehensive operational and IT diligence.
Success in health care mergers and acquisitions begins with getting the right people on the right teams.
If coordinating M&A transactions is not a common occurrence, then the chances of successfully completing a profitable transaction are slim. Studies show that most M&A transactions fail exactly for this reason.
In the first of several posts, Tom Ewers and Munzoor Shaikh of West Monroe Partners discuss the dynamics of health care payer mergers. Here, they describe how success hinges on several key ingredients in the stages before closing — the pre-close stage.