Alternatives to Merger Alternatives to Merger Legal and Structural - - PDF document

Alternatives to Merger Legal and Structural Considerations

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Alternatives to Merger

Legal and Structural Considerations

Alternatives to Merger

Legal and Structural Considerations

Dan Mulholland Horty, Springer & Mattern Dan Mulholland Horty, Springer & Mattern

Common Objectives in Affiliations Common Objectives in Affiliations

• Maintaining/enhancing clinical services
• Physician recruitment and retention
• Information system upgrades
• Improvement and expansion of facilities
• Lower operating costs/economies of scale
• Access to capital
• Continued community involvement
• Managed care contracting
• Clinical integration
• Maintaining/enhancing clinical services
• Physician recruitment and retention
• Information system upgrades
• Improvement and expansion of facilities
• Lower operating costs/economies of scale
• Access to capital
• Continued community involvement
• Managed care contracting
• Clinical integration

Alternatives to Merger Legal and Structural Considerations

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Structural Options Structural Options

• Joint operating agreements
• Affiliation
• Alliances/Networks
• Joint operating agreements
• Affiliation
• Alliances/Networks

Alliance Models Alliance Models

• Shared services/GPO
• Insurance platform
• Parent with limited reserved powers
• Shared services/GPO
• Insurance platform
• Parent with limited reserved powers

Alternatives to Merger Legal and Structural Considerations

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Network Models Network Models

• Geographically integrated

nonprofit network

• “Rent-a-brand”
• Geographically integrated

nonprofit network

• “Rent-a-brand”

Antitrust Integration Requirements Antitrust Integration Requirements

• Common management
• Board appointment/removal
• Treasury function
• Fundamental corporate changes
• Common management
• Board appointment/removal
• Treasury function
• Fundamental corporate changes

Alternatives to Merger Legal and Structural Considerations

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Authority Matrix Authority Matrix

1) Network can take action unilaterally 2) Network must approve the action 3) Network approval not needed 1) Network can take action unilaterally 2) Network must approve the action 3) Network approval not needed There are three options with respect to everything done within a system: There are three options with respect to everything done within a system:

• Corporate matters
• Organizational leadership
• Outside relationships
• Financial matters
• Contracts
• Clinical services
• Labor and personnel decisions
• Corporate matters
• Organizational leadership
• Outside relationships
• Financial matters
• Contracts
• Clinical services
• Labor and personnel decisions

Consider these options with respect to each key function, such as: Consider these options with respect to each key function, such as: