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Medical mergers and acquisitions require trust to be successful

In the realm of complex business transactions, one particular type of merger can pose some unique challenges. That type of transaction occurs when doctors want to merge or integrate with hospitals or healthcare systems. Many healthcare leaders say that integration of practice teams and compensation can be the most important challenges to overcome, and that trust is essential to a successful merger outcome. This is true for Texas physicians, as well as for other doctors nationwide.

In a recent report, some 28 percent of healthcare leaders who replied to questions ranked integration with existing physician teams as the most challenging area for an acquisition. Next in line was compensation. An estimated 23 percent of financial leaders who replied cited integrating the acquired and acquiring practices compensation model, while 14 percent replied that the compensation expectation of the acquired physicians was the biggest issue. The issue of trust came in third and was cited by 19 percent of those who replied. Governance issues came in last with 11 percent.

While the numbers suggest that trust is not at the top of the list, real life would suggest otherwise. When a doctor or practice has a bad reputation, for virtually any reason, that negative reputation can adversely affect the doctor's or the practice's ability to become a viable merger candidate. An untrustworthy reputation can not only sour practice acquisition negotiations, but it can also slow the strategic growth of an organization.

It should be noted that differences in compensation levels and structure between the acquiring and acquired entities are common. In order for these obstacles to be overcome, trust, transparency and a record of kept promises is essential. Knowing how important trust is in a merger may help Texas medical professionals achieve their merger and acquisition desires faster.

Source: healthleadersmedia.com, "Is Physician Mistrust Souring Your Growth Strategy?," Karen Minich, Nov. 14, 2011

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