I have been watching several current and former healthcare provider clients work through the challenges of mergers and acquisitions as the healthcare world continues to consolidate. Along the way, I've learned some valuable insights.
There is no shortage of research and published material talking about how these consolidations should be managed—particularly when it comes to understanding and melding different cultures. Undoubtedly, as this January 2017 Charles River Associates research (PDF) shows, there are good reasons to pursue a merger, including coordination of care, streamlining systems, risk-based contracting and population health, among others.
Mergers are far better than alliances, CRA states, because they strengthen the commitment to change. However, I contend that they create a “flight or fight” response from the people in the organization being merged or acquired. Why? Because people just hate change.
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Typically, staff members (medical or not) are not “happy” or feeling safe in a new, merged world. They really liked the one they had before and immediately get protective of it, whether or not this makes logical or business sense. They are not sure how well they fit into the new culture, which all too often feels like “winners and losers”—and the acquired employees are the “losers.” The brain goes into a flight-or-fight mode, and reason goes out the window.
Mergers bring real challenges for physicians and staff
As my firm has interviewed our healthcare clients, we have found recurring themes in their stories. It seems that doctors and staff are literally having to learn a new language and new behavior patterns, as if they have been dropped in a foreign country.
While they are making more money in many cases, and their offices may be running more efficiently, they are unhappy. Usually this surfaces as anger, frustration and emotional irritation. They realize that their prior “happiness” was more about their perceived freedoms and comforts within their known world because it wasn’t particularly easy running their own practices. Hiring and managing people was tough. Still, that is suddenly “better” than all the new procedures and policies.
Painfully, they are realizing that the customs and habits that they had always valued are very hard to let go of, replaced by the new, larger organization’s “way of doing things.”
Add to that the fact that doctors, particularly those older than 50, built their practices like entrepreneurs, centered on their own styles. There was a lot of personal involvement, as well as a great deal of pleasure in not being accountable to anyone but themselves and their partners. They could fix a problem themselves, their way. They could renegotiate a lease. They could yell at staff who weren’t doing their jobs the way they wanted them to. Life was good—at least it looks better from a distance now. But life has changed.
Another challenge is the chasm between older physicians and younger ones. Not only are the old-timers irritated at the large, cumbersome healthcare system that they are now part of, but they are watching their younger counterparts adapt easily to a work-life balance that better fits their own values. The older doctors are feeling left behind.
And we’re hearing that office managers, administrators and support staff aren’t having it any easier. In the “new” organization, there almost always are more rules and procedures but fewer personalized solutions—that no one really noticed before but care deeply about now.
Hospitals have some of the same problems
Just like individuals, hospitals also experience painful challenges when going through a merger or acquisition. Leaders at one medical center we spoke with felt that their organization was not as important as others in the big, merged system. They saw capital investment going to other member organizations and not to theirs. Plus, they lost some of their talent to central administrative functions.
Yet from the perspective of the central parent organization, the performance of the whole is more important than the newly acquired hospital’s autonomy. Moreover, its addition to the system is essential in penetrating a particular market—that’s why it was acquired.
How to turn staff into the high performers they were before?
Neuroscience teaches us that the brain is very plastic and can indeed be reprogrammed to adapt to new situations. In other words, you can teach old dogs new tricks—provided you use a lot of visualization, repetition, applause and celebration. And practice, practice, practice. (Think of it as learning a new golf swing—hard to do by just reading a book and taking a lesson. It takes practice.)
But all is not lost. As David Rock writes in his article, “Managing with the Brain in Mind,” neural connections can be reformed, new behaviors can be learned and even the most entrenched behavior can be modified at any age. His recommendation is to engage in mindfulness—stepping back to observe what is happening and pausing to quiet the mind and restructure the thoughts into more positive feelings.
It’s important to think of culture change in the same way, as a time of pausing, reflecting and redesigning how you feel about things and how to get them done.
Turn the past into “the new” so it will resonate with staff and move them forward
Smart leaders who understand the interplay between the head and the heart during a merger or acquisition should communicate to their staff a new visualization of the environment that is coming before it arrives. In fact, have the team create that visualization as a story for themselves. They should build it into inspiring stories that quell fears, foster productive change and intentionally work on the areas that pose the most distress.
Three ideas to try:
- Anticipate the hurdles that people will put up:
- Cognitive ones where they don’t understand
- Motivational hurdles where they just don’t want to try
- Resource issues where they don’t have enough time, money, etc.
- Political concerns, which can be very powerful
- Get the “real” leaders involved. You know who they are. They will be the complainers, the ones with frowns on their faces and the ones who tell bad stories behind your back. Turn them into leaders and see how they take lemons and make lemonade out of them.
- Small wins work. Keep everyone working on small wins that move the organization toward that great story they created. Not big changes, but those that show how the new normal is really very good. Even hold a funeral for the things from the past that you are no longer going to do. Give it respect. Recognize its prior value as well as those who hold it sacred now.
In these ways, you will smooth the way for a better, less panicked transition. That, in the end—from the doctors to the staff to the patients themselves—will benefit everyone.
Andrea Simon, Ph.D., is the principal and founder of Simon Associates Management Consultants. She has more than 20 years of experience as a senior executive with financial services and healthcare institutions.