The CIO's role in hospital mergers and acquisitions? Change management

The healthcare industry is undergoing a significant transformation as larger hospitals acquire or merge with smaller hospitals and practices. The typical business goals of these mergers or acquisitions are to increase market share and create overall economic advantages, such as better contracts with managed care organizations, lower operating costs due to consolidation of back-office functions and enhanced information systems to improve population health management.

The chief information officers of these organizations play a critical role in achieving these goals by bringing together the respective information technologies and departments. While the CIOs may have the technical skills and knowledge to handle the technical aspects of these mergers and acquisitions, they may not always have the change management skills to address the people side of these transitions.

The success of an overall merger or acquisition may hinge on the work done by the CIOs and the information technology departments to accomplish the work of creating a “new” single information systems platform to support the needs of the newly created organization, said Lawrence Dux, director of patient care informatics and process improvement at Froedtert Health Community Memorial Hospital in Menomonee Falls, Wisconsin.

“If the change management aspects are not addressed from the very start, there could be delays, increased costs, turnover in critical personnel, and the overall merger or acquisition could be at risk,” he explained.

Change management relates to how individuals respond to and adopt/adapt to new people and processes in their workplaces. There are various models and approaches followed by different organizations – such as Lewin, Kotter and ADKAR – but the common goal of each is to help the people overcome some of their fears and anxieties related to the “change initiative” that is being undertaken by the organization, Dux explained.

“The use of these change management models and the tools and techniques being used have been increasing across the healthcare industry because of the increase in the implementation and use of electronic health record systems, process changes related to making improvements in how care is being delivered, and new clinical treatment protocols being driven by evidence-based research,” he said.

“The people involved in these transitions will need to learn these new systems and follow practices that are much more structured.”

Lawrence E. Dux, Froedtert Health Community Memorial Hospital

The changes related to healthcare mergers and acquisitions are complex because these situations require leaders to let go of the old practices and behaviors and create a new culture with new expectations, Dux said.

Change in the IT department “will often involve retiring legacy information systems and adopting new clinical/financial information systems,” he said. “The people involved in these transitions will need to learn these new systems and follow practices that are much more structured.”

“The effective use of change management approaches, strategies and tactics can support the successful consolidation/merger of hospital/healthcare information technology departments,” Dux said. “The recommendation is to formally adopt change management approaches and to embed them into all merger and consolidation plans for information technology departments.”

Dux will share more insights at HIMSS19 in a session titled “Mergers and Acquisitions: CIO Change Management Strategies.” It’s scheduled for Tuesday, February 12, from 4:15-5:15 p.m. in room W303A.

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