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Mergers and acquisitions: a practical guide for community health centers
Mergers and acquisitions: a practical guide for community health centers
- Collection:
- Health Policy and Services Research
- Author(s):
- Facktor, Greg, author
Gardner, Darrell, author
Eck, Andy, author
Winokur, Daniel, author
Nolan, Brian, author
Boyle, Regina M., author
Degenfelder, Curt, author - Contributor(s):
- California HealthCare Foundation, issuing body.
- Publication:
- [Oakland, California] : California Health Care Foundation, October 2020
- Language(s):
- English
- Format:
- Text
- Subject(s):
- Community Health Centers
Health Facility Merger
California
United States - Genre(s):
- Technical Report
- Abstract:
- California has experienced a dramatic rise in the number of federally qualified health centers (FQHCs) over the past several decades. Significant expansion was originally fueled by President George W. Bush's 2001 Health Center Growth Initiative, which sought to add 1,200 new community health center (health center) sites nationwide. Growth continued to accelerate due to funding provisions included in the Patient Protection and Affordable Care Act (ACA) of 2010. Thanks in large part to ACA investments, the number of FQHC sites statewide increased by 27% between 2013 and 2017, to 1,716, and patient visits rose by 42% to 22.6 million over the same period. Although ACA expansion grants have ended, strategic investments from the US Department of Health and Human Services' Health Resources and Services Administration (HRSA) have provided ongoing support to health centers in recognition of the key role that centers play in expanding access to health care for individuals with low incomes. At the same time, the coverage mechanisms established by the ACA have allowed health centers to do even more to address unmet health care needs in underserved areas. These combined investments have enabled California to reach patients who might otherwise go without care and provide them with a viable alternative to costly emergency room and late-stage specialty care. Even with this continued growth, however, FQHCs--like most provider organizations--are grappling with an array of external pressures, including systemic changes unleashed by value-based care, shifting demographics in the communities they serve, and the ongoing impact of the COVID-19 pandemic. Because these factors have exacerbated existing pressures on public health reimbursement, many health centers are exploring acquisitions and mergers as a means of ensuring sustainability, expanding services, and maintaining patient access to basic health care services in underserved areas. Given that the trend toward consolidation will likely continue, the California Health Care Foundation (CHCF) has created this manual to provide support and guidance for health centers contemplating a consolidation with another provider entity. Beyond the challenges noted above, interest in mergers and acquisitions also is being driven by the long-standing political and regulatory uncertainty surrounding health care. Joining forces with a well-matched health center partner can enhance staffing expertise and help create valuable buffers against rapid regulatory, policy, and reimbursement changes. Acquiring existing provider entities or assets likewise can help smaller, independent health centers more effectively manage health care's growing administrative burden while achieving charitable goals. FQHCs additionally have become attractive affiliation candidates for hospitals and health systems due to health centers' ability to deliver integrated, broad-based primary care. Connecting with health centers can help larger systems extend their capacity to provide a wider range of health care services in ways that are consistent with community needs. Regardless of the underlying catalyst, health center consolidations can be complex to navigate, particularly for those without experience in this area. It therefore is the authors' hope that organizations considering the journey will use this guide to walk through the process thoughtfully and intentionally, from the point of initial strategic inception through finalization and integration. By taking this approach, common pitfalls can be avoided and the likelihood of a successful outcome will be increased. That said, the authors recognize--from a combined 80 years' experience in advising health care mergers, acquisitions, and expansions--that organizations do not always enjoy the luxuries of time or resources when pursuing a new business approach or structure. If you're facing a tight deadline, don't be concerned if you're unable to fully follow or adopt the guidance provided here. The chapters may be referenced individually to address specific areas or challenges. Consult the sections as you are able and take from them what you can. Conversely, if your organization is not facing an immediate need to consolidate or otherwise act, you may still benefit from this guide. Planning ahead will help ensure that potential partners have been identified and the necessary processes are fully understood. Thinking through the steps associated with various scenarios will help you be fully prepared when the time for action comes. Ultimately, the decision about whether a merger or acquisition makes sense must be based on the unique circumstances surrounding the organizations involved and the communities they serve. It is also important to remember that even with the best of planning, few unions are executed perfectly. This guide should help you navigate the process to consummate an effective merger or expansion so you and your new partner can get back to the essential job of providing high-quality health care and enhanced access to the communities you serve. To further increase your knowledge in this area, we also recommend consulting CHCF's October 2019 publication Building to a Sum Greater Than Its Parts: A Hands-On Guide to Cultural Integration in Community Health Partnerships and Alliances.
- Copyright:
- Reproduced with permission of the copyright holder. Further use of the material is subject to CC BY-NC-ND license. (More information)
- Extent:
- 1 online resource (1 PDF file (68 pages))
- Illustrations:
- Illustrations
- NLM Unique ID:
- 101775680 (See catalog record)
- Permanent Link:
- http://resource.nlm.nih.gov/101775680