Industry Voices—Before a merger is done, design the right plan for data management

Insurers must consider their plan for integrating data if they move forward with a merger. (whiteMocca/Shutterstock)

This past August, Tufts Health Plan and Harvard Pilgrim Health Care announced their intention to merge, a move executives say will help reduce costs and expand their product portfolios. The planned merger is one of four health plan combinations making headlines this year.

Another is Centene Corporation’s plan to purchase its rival, WellCare Health Plans, which would make the combined company one of the largest sponsors of Medicare Advantage, Medicaid, and Affordable Care Act plans.

As several of these deals await regulatory approval, one key next step leaders must anticipate is deciding how to fuse their data assets—and most effectively collaborate to derive optimal value from their data.

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Going behind the scenes

In August 2018, the team at Verscend Technologies Inc. finalized the multibillion-dollar acquisition of Cotiviti Holdings Inc. Months of planning had already gone into the upcoming integration of the clinical and financial data sets of our two payer analytics organizations, but the enormity of this task required careful orchestration in four areas:

  • Infrastructure: How are data captured, managed, and maintained? Which technologies do the organizations have in common, and where do resources differ?
  • Clinical logic: It’s not uncommon for organizations to do the same type of work but define the work differently. What are the “rules” for analyzing data, and how are the parameters for rule logic defined? How are business rules organized?
  • Policy: What are the organizations’ policies around data access, rights, security, retention, and destruction? What resources are devoted to enforcing these policies, and what external commitments, such as contracts with vendors, support compliance?
  • Culture: How important is data to each organization? To what extent is data embedded into employee work processes? What are the strategic uses of data—and how do they differ by organization?

Our shared vision for the future established a strong foundation, but significant details still needed to be resolved to best navigate the postmerger integration. For example, immediately after the acquisition closed, a review between our organizations revealed 35 member-oriented data processes, which required us to determine how to best replace them with a common set.

One analysis found that when organizations don’t put enough time into preparing for process and system integration prior to a merger, this doubles or triples IT costs for merged entities.

Based on our experience merging these two organizations into a single entity, we recommend that health plans preparing for a merger consider the following best practices:

  1. Make the tough decisions around IT integration early. Success as a merged entity—especially a high-volume and -velocity transactional entity such as a health plan—requires that organizations operate from a single technology platform. This can be especially hard for health plans that operate on legacy technological infrastructures that are not well-equipped for interoperability or data and analytic extraction. Yet, for leaders, that means knowing when to let go of a platform that they may have known for years, or that may be considered best-in-class for a specific purpose, for another that is also highly regarded and ultimately a better fit. In the case of Cotiviti, once we determined which technology platform would serve as the basis for the combined business, we could focus on the next big challenge: data integration.
  2. Focus on team-building among data team members as early as possible. Immediately following the acquisition of Cotiviti, leadership also brought team members together by function to create a shared language for the future. Staff took a deep dive into existing processes at each organization and explored ways to overcome differences in approach. The meetings created strong bonds among the teams and supported a seamless transition. Including existing managers in these discussions was key to this approach.
  3. Make sure all employees understand the value proposition. Authentic leaders communicate the value of a merger to their customers and to their teams early, often, and with conviction. In our experience, executives from both teams framed the transition not just as a way to build shared data science capabilities to create value for our clients but also as an exciting opportunity to learn something new in team members’ field of expertise. At each stage of the transition, managers communicated what was happening, the direct impact on employees, and the time frame for completion. Dialogue took place through many mediums: email, lunch-and-learn sessions, town hall meetings, newsletters, and dedicated conference calls. Staff gained assurance from open communication and remained focused on the work ahead.

Having done the upfront work of preparing, communicating, and executing change management with a specific focus on our data assets and capabilities, Cotiviti achieved some of the merger’s biggest goals within a year, including building a next-generation platform for our payment accuracy solutions and expanding our underlying data platform.

Rather than being bogged down by unfinished business related to the merger, we were instead able to fully capitalize on its benefits.

By setting the stage for informed decision making and collaboration, health plans can establish a stronger framework for data integration during the merger and a solid basis for teamwork in the months that follow.

Jordan Bazinsky is executive vice president and administrative officer at Atlanta-based Cotiviti, a healthcare analytics company.   

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