Strategy and Self Assessment Complete and Update a Strategic Plan - - PDF document

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MERGER, AFFILIATION, OR INDEPENDENCE

Steven J Tringale Estes Park Institute January 27, 2015

Strategy and Self‐Assessment

• Complete and Update a Strategic Plan
• Conduct a vulnerabilities and gap assessment

against identified strategic imperatives

• Develop competitive intelligence

– Process should be viewed as early “due diligence” process for potential partners – Line up your gap assessment against those of competitors/potential partners

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Strategy and Self‐Assessment

• Communicate and Educate Results to key

internal constituencies

– Board – Senior Management Team – Key Physician Leaders (outside of board and senior management)

• 1st Gate – Decision that it is time to explore a

collaborative relationship

What Are Organizational Goals/Requirements of a Partner

• Form Ad Hoc Committee to Review Strategic

Collaboration Options

– Representatives from board, executive management and physician leadership

• Pivoting off strategic plan develop list of key
• rganizational goals for Collaboration
• Organize criteria into key areas

– Assess areas where there is redundancy & areas that expand your current capabilities

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What Are Organizational Goals/Requirements of a Partner

• Governance and Organizational Structure

– Example: Is retaining governance control of local system is a criteria for partnership?

• Strategic Positioning of Potential Collaborator

– Test against your strategic plans vision of the market as you see it evolving

• Business Operation

– Collaborator have valuable/unique relationship with payer(s), employers, government

What Are Organizational Goals/Requirements of a Partner

• Clinical Program

– Service lines capabilities and capacity – Potential to support/enhance your operation – Compatibility of referral and teaching relationships

• Regulatory Issues

– Does potential affiliation pose additional risk and a different standard for approval

• Issue should include assessment of partner & potential

configuration of collaboration

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What are Organizational Goals/Requirements of Partner

• Cultural Fit

– Issue most often cited for reason for failure of a collaboration or dissatisfaction with partner – Qualitative assessment that needs to factored into the quantitative analysis to determine your preferred collaborator

• Resist temptation to factor this issue in after selecting

potential partner

Next Steps – Key Decisions

• Are Certain Responses Off The Table

– “We will not entertain a full asset merger” – Do we start with least disruptive and intrusive models – Is this a transitional step or end game

• Would you grant a potential partner right of first

refusal for full asset merger?

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Next Steps – Key Decisions

• Recommend a facilitated process that:

– Develops “relative weighting” for criteria of preferred collaborator – Use survey as tool for ad hoc committee – Engage committee in discussion on results – Results increase and validate buy in from ad hoc committee and their representative constituencies – Gate 2: Identify preferred collaborator

The Negotiation Process

• After Initial Discussion With All Potential

Partners – Eliminate

– Those that do not optimize your strategic objectives – Those that will not consider your affiliation option of choice – Those where there is a strong belief in mission and/or culture clash – Those that provide an unacceptable risk of regulatory complications or denial

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The Negotiation Process

• Move decisively, control the agenda
• Put clearly defined limits on process – time

line and confidentiality

• Develop strong Communications Plan

– Clarity is Essential – Internal and External Messages Consistent

• Consider Break Up Fees

Closing Observations

• Keep focus on option of choice
• Maximize future options by agreeing to least

intrusive option that meets institutions strategic requirements

• Remain flexible and creative – Deal templates

are just that – templates/guides

• Be prepared to say no
• Always have a Plan B!!!!

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QUESTIONS?