Whenever healthcare mergers & acquisitions happen, they draw attention and sometimes make major headlines, especially in the case of larger hospitals and health systems. The ripple effect of operational, care delivery, and staffing changes may lead to many questions and create discomfort across affected groups—including increased stress and burnout in leaders, clinicians, and staff.
Those concerns and potential impacts are well-founded when organizations conduct these transactions without a solid M&A strategy. Misaligned cultures can affect employee retention, confusing workflows may lead to delays and inconsistent patient care, poor financial planning can hurt organizational ROI ... and the list goes on.
One area of change management in healthcare that organizations often fail to adequately consider is legacy systems and data. But leaving healthcare data management near the bottom of your priority list during a major business event can cost you—on multiple fronts.
Vital Due Diligence During Healthcare Mergers & Acquisitions
Healthcare organizations considering an acquisition—or seeking a buyer—have to be confident and prepared during the challenging times we’re facing. There’s economic uncertainty caused by tariffs, supply chain concerns sparked by potential trade policy shifts, and acquirees under financial distress, all of which drove a major drop in healthcare mergers & acquisitions in the first quarter of 2025.
That abrupt slowdown feels familiar because it mirrors what we saw during the pandemic. But while activity may rebound with improved economic conditions, future buyers and sellers must have an M&A strategy that mitigates risk and ensures long-term stability.
Central to this strategy and change management in healthcare is having a complete understanding of the existing software and hardware that the acquirer and acquiree possess, and how disruptions to those systems may impact data flow, accuracy and safety in care delivery, security of personal health information (PHI), and employee productivity. To align effectively, both parties must communicate and collaborate openly.
Hospitals and Technology Integration: Smoothing Over Disconnects
Acquirers will oftentimes lay down the gauntlet to acquirees and say, “these are your choices for software” without taking the time to understand the acquiree’s needs. Now, they might have very good reasons for that, like aligning their hospitals and technology, but they must consider whether they’re disrupting effective workflows tailored to current solutions the acquiree is operating—and discuss possible issues with the acquiree.
The acquirer needs a smooth transition of those workflows and processes, or they may end up either breaking things (e.g., patients having poor experiences because their information is in multiple places) or seeing employees fall back to working on legacy systems, because that’s where they can get work done. (Or both.)
Conversely, acquirees need to advocate for their preferred systems and workstyles for successful change management in healthcare. And both sides must remember that their applications are part of a larger architecture, with systems feeding data to each other and third parties. It’s crucial that each side practices strong application portfolio management and healthcare data management so they know what data’s going into their systems and what’s going out.
Exploring the Importance of Application Portfolio Management
Healthcare mergers & acquisitions are only pursued when buyers want to make more revenue. They think by adding more facilities, they can drive more referrals into their broader networks, and that they'll save more money and increase profits by reducing headcount and eliminating redundancies. But all those savings and earnings aren’t possible if organizations don’t integrate seamlessly and decommission systems effectively.
That’s where application portfolio management comes in. Organizations that prioritize this practice as part of their planning for change management in healthcare continually maintain an asset inventory and evaluate apps that meet their needs. They gain a high-level understanding of their software architecture and can use those insights to archive data efficiently.
With data archiving, hospitals and health systems can reduce noise by retiring scores of legacy systems and avoiding a “death by 1,000 paper cuts” situation—where they’re wasting money on maintenance and staff who know the old technology, aggravating already-overburdened clinicians with complicated data retrieval, and leaving PHI at risk of breaches. Instead, the money and time they gain can be applied toward more innovative work.
“The whole point of data archiving and portfolio management/rationalization is to help reduce technical debt. Legacy systems basically are technical debt. They create risks just existing. You need people on staff who know how to maintain them, or you must pay consultants. You have to be able to extract information out of them, which means your HIM team needs to know how to access them. There’s a lot of training.”
– Nick Anderson, VP of Platform Development and Product
In the leadup to healthcare mergers & acquisitions, organizations will have fewer things to check off their to-do lists if they’ve implemented these strategies. They don’t have to worry about having duplicates of everything or biting off more than they can chew with an audit of a bloated software portfolio. As a result, they’ll see efficiency gains and won’t lose out on potential revenue they envisioned in the business case for the acquisition.
Advice for Healthcare Data Management Ahead of a Merger or Acquisition
You can’t pivot on a dime to evaluate hospitals and technology portfolios and then eliminate the systems you don’t need. Change management in healthcare is complex, and it’s hard to have conversations about healthcare data management before the merger or acquisition happens.
But it’s important to get a lay of the land early, do your due diligence, decide who’s going to be involved in discussions about system retirements and tech integrations—and then start those discussions in the first few weeks or months. Because, after about two to three months when low-hanging fruit in the tech rollout has been wrapped up (like email, domains, and the like), the merging of higher-dollar systems will begin. And without a plan, you’re already behind the 8-ball.
We recommend organizations that frequently acquire health systems, hospitals, or other facilities create an M&A strategy playbook. This would examine, for example, the first five things both the acquirer and acquiree need to do with their technology in preparation for the transition—as well as how to handle other concerns, like marketing and the makeup of teams like finance. This will help offset some of the unease and anxiety experienced by acquirees, who might have limited intel about what’s going on and make false assumptions or go rogue with their own plans that sow chaos and confusion.
“I think most people paint a picture in their own heads of what the reality of M&A will look like, but what ends up happening is, especially as an acquiree, you end up envisioning your own future without all the information. So, you can’t make the best decisions or even good recommendations.”
– Mick Blackwell, Director, Marketing & Partnerships
It’s incumbent on the acquirer to take the lead and steer a steady course so that there’s a clear M&A strategy for all to follow.
Change management in healthcare doesn’t have to be handled in a vacuum. Our experts at Verisma can help guide your healthcare data management efforts as part of this journey. Learn more about our Olah™ data archiving solution and related tools.
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Nick Anderson |
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Mick Blackwell |
