Daily Briefing Live – June 8, 2020

Resources Mentioned in Today's EpisodeNational Law Review Article: Proposed California Legislation Would Require State Approval for Health Care M&A and Prohibit Use of Health Care Market Power to Raise PriceCalifornia Healthline Article: California AG Seeks More Power To Battle Merger-Hungry Health Care ChainsThe Bond Buyer Article: Two Big Midwest Hospital Mergers CanceledKey TakeawaysExamples of canceled M&A plans.Michigan-based Beaumont Health and Ohio-based Summa Health called off their plans to form a $6.1 billion system after a definitive agreement was signed.Several South Side Chicago hospitals had planned to join forces as part of a $1.1 billion project that included building at least one new hospital and up to half a dozen community health centers.For communicators who are part of a system moving forward with M&A plans or are considering looking for a partner.Emphasize how the proposed transaction will maintain or improve either quality or affordability, ensure access to care for communities, and address the financial challenges faced by health systems as a result of the pandemic.Articulate how the M&A activity will stabilize affected health systems — allowing them to manage the COVID-19 crisis and future pandemics.Speak to audiences in terms of value to all.Center the messages around things like improved quality and stabilization to create a sustainable future in providing care for the community.Communicate messages of job creation and facility creation.People are concerned about job losses with M&A. Think through reactive messages within that context.Highlight how these partnerships will facilitate continued care in a market, which otherwise might lose a valuable healthcare resource.Share positive economic benefits the transaction will bring for local communities.Communications that support the vision, rationale and benefits of a deal will also need to be relevant to the regulatory bodies whose approval may be required.Ensure stabilization where there is only one healthcare agency within the community.This goodwill can be valuable as health systems seek stakeholder and community support for their transactions.Public perception and support of healthcare providers have been extremely positive during the pandemic to date, as evidenced by homemade banners, balcony tributes, and praise on social media.Health systems and their staffs have borne personal risk and financial pain by focusing on patients and public health at the expense of all else.But that goodwill can also be quickly forgotten.As health systems race to the altar to beat out competitors for M&A targets and other strategic relationships, it is critical that they are thoughtful in structuring their deals and justifying the activity.For example, acquisitions and partnerships involving lucrative executive compensation or severance packages will be viewed negatively if undertaken by a system that instituted large compensation reductions across the system or even furloughed or laid off employees during the pandemic.Internal communication has never been more important.We always counsel clients to focus on internal audiences first when announcing an acquisition.But this is even more critical right now since staff have been working tirelessly to treat patients with COVID-19 as well as recover financially from the last few months.Any effective communication plan will need to clearly articulate the benefits to staff and allay any fears of layoffs.