5 insider tips for better healthcare system partnerships

5 insider tips for better healthcare system partnerships

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Wednesday, September 30, 2020 | BrandActive

What can healthcare system marketers expect in terms of partnerships and M&A during the coming year? It’s a tough question to answer as the industry remains unsettled and the clock is ticking – now a single quarter is all that separates us from 2021.

Even in these unpredictable times, there are some things we do know: more than two-thirds of healthcare systems are exploring and/or completing deals right now. And healthcare leaders remain bullish on the benefits of partnerships. President and CEO of Hartford Healthcare Jeffrey Flaks recently spoke with Modern Healthcare on the topic of partnerships: “At the end of the day, our job is a about community, access, quality and affordability. When collaborations can result in those benefits, we should absolutely pursue them.”

With all signs pointing to increased M&A and partnerships, healthcare system marketing experts with divergent perspectives shared both predictions and practical advice on how to maximize the outcomes and benefits of these tie-ups during New rules: Healthcare partnerships and M&A in 2021 and the role marketers should play. Webinar panelists included Donna Lee Ubertalli, VP Marketing and Brand; Dana-Farber; Nate Kaufman, Managing Director, Kaufman & Associates; Jeff Gourdji, Partner, Prophet; Shannon Susko, Executive VP and Healthcare Lead, Edelman; and Philip Guiliano, Partner, BrandActive, who moderated the session.

Here are 5 key takeaways/actionable insights from this webinar for healthcare marketers.

1. Keep an eye on the evolving challenges of the current environment

Healthcare systems and hospitals have seen record operating losses in 2020—yet Nate Kaufman says that payors are targeting lower reimbursement rates for both hospitals and physicians. This certainly will add to the financial woes of healthcare systems. He believes that the quest for more negotiating power with payors will drive more consolidation.

The potential for system-shaking regulatory changes is also ratcheting up the pressure on healthcare systems. Shannon Susko says, “Both short- and long-term plans will be affected by “the unfortunate passing of Justice Ginsburg, which is leading to uncertainty about potential repeal of the ACA and what that will mean for hospital system revenues going forward and from an operational perspective.” Shannon also sees a strong buyer’s market for healthcare system M&A in 2021.

Donna Lee Ubertalli expects the rise in interest in partnerships among smaller healthcare systems to continue as they look to leverage the strength of brands like Dana Farber as a way to stabilize growth.

2. Double down on the deal rationale

Never more urgently than now, the deal rationale needs to make sense to key audiences including patients, staff, and regulators (and dollars and cents for the participating organizations.)

Reflecting on past practices, Jeff Gourdji addresses the difficulties of finding a compelling value proposition when putting two healthcare systems together. Often, value propositions are stated in terms like enabling patient access to more healthcare resources. Jeff says: “Almost always [the value prop] talks about access for commercially insured patients. [But patients] already had both systems in network already to begin with, so that alone is not a value proposition. It can’t just be the value proposition for the financial bottom line.”

An option for creating value propositions with honest appeal is to consider increased expertise, meaning the combination brings about greater collaboration between systems and greater access for patients to clinical trials, or conveys that something new and best in class is being created. Another approach—which is the holy grail—is to promise and actually deliver a better customer experience over time, as the combination brings the scale require to make these investments.

Jeff recommends having the patient point of view represented when value props are developed, and Shannon emphasizes that Comms, PR and Marketing should be involved in value proposition development from the outset.

Looking at the issue from another angle, Nate believes that deal integration activities need to focus on the clinical level and that’s hard to do well. He said: “The hardware of a health system is the buildings and the administration. The software is the doctors and the nurses and the other clinical personnel.” He believes it’s getting the software to work that counts. “You’re not a health system if care is delivered at hospitals in two different ways” and the clinical outcomes don’t align… First and foremost, the brand is clinical.”

3. Gain the trust of your most skeptical audience: your healthcare system employees

You’ve heard it many times and it’s never more true than when an M&A or partnership brings two or more organizations together: Culture eats strategy for lunch. Excellent internal communications are absolutely critical, but even those often fail to break down internal resistance to change. One of the ways to ensure buy-in, according to Jeff, is to invite employees to participate in the development of the value proposition—and not just any employees, but long-tenured middle managers, often one level down from the C-suite.

In Jeff’s own words: “We always advise building something together. So, for this post-acute care organization that was going through a merger, we worked through a co-creative process with dozens and dozens of employees to create the values of the new organization. Now, in the end, if I put the values up on the slide, you would say, yeah, that’s looks familiar. Healthcare organizations have those values. But the magic was in creating it. And for employees who didn’t directly participate, knowing their peers and friends participated gets people to say, ‘This isn’t a takeover.’ ” By asking people to focus on what the combined organizations are creating together rather than ruminating on where they came from, you create shared experiences, shared values and a shared vision for the future.

4. Get Marketing that elusive seat at the deal table

Marketers want a seat at the table early in discussions about M&A and strategic partnership arrangements. When marketers are at the deal table early, they can help ensure that the value proposition resonates, ensure the patient voice is heard, carve out the right role for the brand(s), and prepare properly for the communications, marketing and brand work that follows. Actually securing that seat, however, has eluded most marketers.

One notable exception is at Dana Farber, where Marketing is traditionally at the table early. Donna Lee shares that: “Dana Farber is about collaboration. Marketing is there in an advisory capacity early on…and hears what’s happening and how the deal is being structured.” Marketing works out the value the brand brings to the deal with partners and sets expectation for how it’s going to work.

Donna Lee believes that in in addition to having authority on your subject, people have to want you to be at the table with them. Nate and Jeff suggest that marketers need to take baby steps and earn that spot by executing smaller initiatives successfully in a way that gets the CEO’s attention, and by bringing forth best practices from industries outside of healthcare.

Being at the deal table pre-announcement really matters to communications. Shannon says: “Nearly 45% of deals leak early. So, if you don’t have your Comms, Marketing and PR team at the table early, you’re really at a strategic disadvantage because you may be finding yourself in a situation in which your deal rationale has been controlled.” Clearly, being able to own that conversation rather than react to it requires knowing about the potential transaction in advance and having the time to plan for it.

5. Bring order and fiscal responsibility to M&A and partnership implementation

Once partnership and M&A contracts are signed, Marketing needs to manage the marketing and brand aspects of partnerships and M&A in a way that maximizes impact—and minimizes the costs and effort required to execute and maintain them.

Recently, brand and marketing operations teams (“operations” being a distinct new function in many Marketing departments) are taking a lead role in managing what may add up to hundreds of different partnerships of various types, from collaborations and affiliations to joint venture and M&A arrangements. Their job is to “figure out how to standardize and simplify and make marketing operations repeatable,” says Philip. The team answers questions such as how to manage the marketing aspects, figure out the cost, scope and timing; convert branded assets; manage the budget; and collaborate on creative and workflow.

Donna Lee emphasizes the role of pre-planning for partnerships and the impact to organizational structure at Dana Farber: “We have worked over the past couple of years to rebrand ourselves and create a brand architecture. We’re a very complex organization with a lot of partnerships—hospitals, physician practices pharmaceutical, biotech, and so forth. We sorted out our brand architecture and created very strong brand guidelines. So, start there. I think you have to be really organized about what you’re doing, and bring that to the table, and then it’s very important to establish guidelines for any partnership. How is the brand going to be used? Ideally, all of that needs to be part of the discussion as the deal is being put together.”

The key is having a partnership playbook created from the Marketing perspective, says Philip. “It doesn’t cover the organizational integration of IT and HR and the like—Deloitte and McKinsey try to sort that out. But they don’t deal with the marketing aspect of managing Marketing implications over the short and long term.”

Shannon’s take: “Having more systematized and templated operations certainly makes integration and planning easier.” Outcomes include more consistency and standardized processes, which make the effort to combine or align your organizations more efficient.” And Jeff summed it up: “[It] can become if not a competency, at least something that you can get better at.”

You can listen to the full recording of the webinar with experts from M&A, Communications, Brand, Healthcare Systems, and Marketing Operations disciplines or to read the transcript here.

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