Consolidating Strengths: How to Navigate Nonprofit Mergers and Affiliations prepared for National Council for Behavioral Health Webinar
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1 Consolidating Strengths: How to Navigate Nonprofit Mergers and Affiliations prepared for National Council for Behavioral Health Webinar David C. Guth, Jr., CEO, Centerstone and author of Strategic Unions, A Marriage Guide for Healthy Not-For-Profit Mergers Andy Black, CEO, Helen Ross McNabb Center November 14 th, 2013
2 Food for thought According to a report issued on October 29 th, 2013 by the Alliance for Health Reform: There were 1,063 mergers and acquisitions in the health care sector in 2012 one of the busiest in the last decade Seventy-eight percent of hospitals are either exploring a possible merger or are in the midst of one in
3 Where is the industry going and how does our organization need to change in order to thrive in the advancement of our mission? 2
4 Anticipated Changes Healthcare Reform universal coverage parity integrated care blended payments performance payments and penalties Technology Advancements remote service online scheduling Apps Competition Treatment Breakthroughs genetic testing predictive modeling clinical decision support care pathways 3
5 Expected Benefits of a Merger What can my organization expect to achieve through merger that it cannot achieve as well or as quickly from other means? 4
6 For Example: The Helen Ross McNabb Center story Founded by Volunteers in 1948 Mission Driven Improving the Lives of the People We Serve Medically Driven Treatment Model Delivered Through a Social Work Philosophy Primary Services-Mental Health with SPMI and SED, Substance Abuse Children and Adults, Social Services 22,000 Patients Served Diverse Revenue Streams 82 Distinct Programs Helen Ross McNabb Foundation with 27-year History of Friendraising and Fundraising CARF Accredited since
7 Drivers behind the HRMC affiliations Mission Expansion/Compatible Geographical Reach and Increased Number Served Continuums of Care Enhance, Develop, Expand Quality Care is First and It Always Sells Should Improve Financial Stability and Strength Strengthen Position in Community, Improve Ability to Compete Maintain Positive Community Profile Ability to Recruit Quality Volunteer Leadership for Board of Directors, Friendraising and Fundraising Position for the Present while Strategically Ensuring Mission for the Future Strength Through Competition 6
8 The Marriage Model No buyer or seller and no acquisition debt Seeking compatible (values and vision), attractive, and attracted partners Permanent union Shared assets and liabilities The real work begins after the wedding 7
9 The Inventory What assets and liabilities does my organization bring to another merger partner? What strategically important assets could my organization expect to acquire through another merger partner? 8
10 How It Is Done The Process Affiliation Strategic Plan and Study Committee Letter of Intent and Due Diligence Dating Letter of Interest and Merger Task Force 9
11 The Plan Design The Organizational Chart The Corporate Plan The Board Plan The Brand Plan The Benefit Plan The Facilities Plan The Communications Plan The Authority Matrix 10
12 Keep the End in Mind! What does a merger or affiliation for your organization need to look like in terms of: Additional infrastructure Community, staff, consumer, payer perception of the process Accomplishments post affiliation Keep goals front and center as you create and evaluate your plan. 11
13 Change is Not All Joyful! Grief is an unavoidable process Denial Anger Bargaining Depression Acceptance 12
14 My Next Steps With: the Board - the CEO - Attorney and Consultants Each Journey Begins Finish Strong Try to Avoid 13
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