Merger and synergy planning for distressed safety net hospitals
Nonprofit, mission-based safety net hospitals
Gibbins Advisors conducted a rapid, data-driven assessment of synergies and opportunities across two non-profit health systems, while carefully managing stakeholder sensitivities to support constructive partnership discussions.
TEAM Ronald Winters, Clare Moylan, David Legg, Mark Beckett + others (total team 16 people)
Situation Overview
Two religiously sponsored nonprofit hospital systems, both serving disadvantaged communities with a high government payor mix, were encouraged by the State Department of Health to explore a partnership. The aim was to achieve efficiencies and reduce reliance on ongoing emergency funding.
Images are for illustrative purposes only.
Summary
Sector:
Religiously sponsored community hospitals, with a behavioral health focus
Approx. Size:
2 organizations, 5 hospitals, 22 outpatient clinics
Our role:
Assessment of Synergies and Opportunities
Key Results
Completed extensive review in very tight timeframe
Both clients, plus the state Department of Health were pleased with our report.
Role
Engaged by the organizations to conduct a rapid assessment of synergies considering all aspects including cultural alignment, strategic service & site planning, payment rates, IT, HR, physician contracts, supplies, labor, and organization structure to arrive at quantified savings potential, outline of a vision and implementation plan for merging the two organizations. Reviewing and recommending options for deal structure also formed part of our scope.
Approach
We deployed a 16-person team to conduct a rapid, 8-week evaluation of all aspects of revenue, cost, services, capital expenditure, cash flow and other balance sheet items.
Data-based approach, utilizing internal data as well as market information.
Board member interviews with each organization, to assess the points of alignment and difference.
Early review and validation of data with each organization, testing analysis and assumptions.
Carefully managed stakeholder relations, being mindful of sensitivities and each party’s interests.
Key Accomplishments
Delivered a comprehensive fact base in a compressed timeframe.
Balanced sensitivities to present findings in a way that fostered constructive dialogue between boards.
Provided stakeholders with clear, quantified options to support ongoing partnership discussions and strategic decision-making.
