In Healthcare M&A many changes occur after the transaction as a consequence to the integration of the facilities. Changes are necessary to facilitate the integration of the companies and create long-term synergy.
One of the most necessary changes come with licensing and compliance. In a healthcare transaction, two or more entities join together and operate under the same licensing. There are a great many licensing and regulations in the healthcare space. The new entity must comply with all the laws and regulations as to when they were separate. To remain in compliance or become compliant they must make changes in their system to manage the new licensing requirements and maintain compliance.
The Health Insurance Portability and Accountability Act (HIPAA) mandates the protection and security of patient information. Hefty fines are imposed on violators. The post-transaction phase of a healthcare transaction presents a high risk of exposure of patient information. Each entity involved in the transaction has their own systems and procedures to secure private information. These procedures and systems may not be equal or may not sync when put together and create a hole which private information may be leaked. The newly formed healthcare entity must make changes in its systems, processes, and training to maintain compliance and protect patient information.
Effective post-transaction integration plans are designed to create long-term value. To be effective, an integration plan should be developed early on in the process which focuses on creating positive synergies.