Merger Planning & Integration

…..making mergers work

Our expertise includes: 1) conducting assessments of the operations of targeted acquisitions; 2) developing pro forma models of merger savings; and 3) preparing efficiency reports to demonstrate that merger-related efficiencies and other related community benefits.

Case Studies

Financial Pro Formas

These two hospitals were considering a merger and were interested in developing financial pro formas to gauge the financial viability. Accordingly, we developed a number of likely models regarding the administrative and clinical consolidation that could be achieved over a five year period. These models considered shifting and centralizing selected clinical services and reducing the number and levels of management required. These models were translated in to a complete set of financial pro formas.

Acquisition Analysis

Assessed the economies that could be generated by an acquisition of a women’s hospital. The analysis broke out the savings that could be generated by the women’s hospital independent of the acquisition through higher productivity levels and other efficiencies and the savings that were merger-dependent. The assessment of merger-dependent savings incorporated analyses of department and management consolidation, capital cost avoidance and economies and diseconomies of scale.

Consolidation of Two Campuses

Assessed the economies that could be generated through the construction of a new hospital to replace the current two-campus configuration. The analysis broke out efficiencies achievable due to consolidation of the two campuses and due to other executional efficiencies. In addition, we considered other economies achievable through the integration of selected clinical and administrative services with a sister hospital.

Clinical Consolidation

Performed financial modeling of scenarios under consideration for the consolidation of perinatal services of two hospitals. Calculated 5-year profit and loss statements for each of the scenarios. Analyzed efficiencies and economies of scale available at higher patient volumes as well as savings due to management consolidation and avoidance of capital costs.

Merger Antitrust

Prepared separate efficiency reports for each of the three merger configurations that were under consideration. The efficiency reports, prepared in anticipation of a potential antitrust challenge, identified the clinical and administrative consolidation opportunities to be achieved by the merger and calculated the operational and economic benefits that would be realized over a five-year period. The reports were prepared with significant input from a joint planning team representing selected executives from the merging hospitals.

Merger Planning

“They have helped our leaders get organized and helped to break down internal barriers and guide some of the more difficult discussions with stakeholders. It has been a successful project and really a good, collaborative effort.” CFO

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