Mergers and acquisitions (M&As) are highly prevalent in the healthcare industry—a trend that will likely continue into the foreseeable future. The first half of 2024 saw 31 announced hospital M&As, and the second half of the year is expected to see even more.
M&As create massive changes for hospitals, impacting everything from policies to organizational culture. But there’s one critical M&A impact that doesn’t always receive the attention it deserves—clinical data.
M&As pose massive security risks for healthcare organizations. A hospital’s risk for a data breach doubles in the year before and after a merger. Additionally, merging data systems across facilities is highly complex. Without extensive planning, hospitals may experience significant workflow disruptions, data access issues and inefficiencies.
For an M&A that keeps health data safe, it’s crucial to understand how M&As impact data management and what healthcare leaders can do to ensure a smoother transition.
How M&As Impact Clinical Data Management
To learn more about M&As and clinical data, my company surveyed and interviewed hospital and health system leaders who have experienced M&As. Eighty-seven percent said the M&A impacted how their facility or health system manages its clinical data, underscoring the need to integrate data management considerations into M&A planning.
The biggest way M&As impacted data, reported by 44% of respondents, was through changes in governance and access. These changes can have varying effects on organizations. Sometimes, improved governance and access enhance data accessibility, leading to improved operational efficiency and data management. However, if these changes lead to poor data governance policies, they can have adverse consequences, such as creating duplicate records across systems, limiting data access or incurring additional costs due to errors and redundant systems.
Another common impact is centralized data management systems. Standardizing operations and systems across facilities makes it easier for healthcare leaders to get a systemwide view of their data, paving the way for deeper insights. A third of respondents experienced challenges integrating data between systems, which is also common outside of M&As. One report found that integrating disparate IT systems is one of the biggest challenges healthcare CIOs and IT leaders face.
Respondents also shared that their facility adopted new data management tools or systems or worked with new third-party clinical data management vendors. This may be because M&As often drive the need for data management approaches to better support the complexities of managing data across multiple sites.
Strategies For A Smoother Transition
Prioritize data security.
Because M&As can create added security risks for hospitals, healthcare leaders must take proactive steps to keep their data safe. Some strategies healthcare organizations can take include encrypting all stored and transmitted health data, having data recovery and backup mechanisms in place, using two-factor login authentication and creating a security incident response plan.
Hospital leaders should also ensure their third-party partners are equipped for maximum data safety. They should seek out third parties that follow strict security protocols—such as those that are SOC 2 and HITRUST compliant, which certifies that they are meeting security and privacy regulations from both the Health Information Trust Alliance and the American Institute of CPA’s Systems and Organization Controls.
Start with the biggest priorities when centralizing clinical data management.
The benefits of centralizing clinical data management systems and processes are well documented, including greater data access, cost savings, higher data integrity and improved CMS compliance. But centralization is not an overnight process. A health system leader I spoke with shared that their facility prepared for an M&A by deciding which data systems to centralize first. They then took a gradual approach to centralization, setting milestones along the way.
To replicate this success, healthcare leaders should consider which data systems to centralize based on their impact, create a phased plan to guide the process and establish protocols for how staff will navigate using disparate systems in the meantime.
Consider tools and technologies strategically.
As M&As present an opportunity to upgrade data management capabilities, healthcare leaders should take a strategic approach to evaluating new data management investments. If a tool or technology can’t be used across multiple facilities, it may not provide enough value for a growing facility’s evolving needs. Conversely, solutions that can be effectively scaled and used systemwide are well-positioned to drive efficiencies across the health system and support long-term success after the M&A.
Final Thoughts
As more hospitals and health systems look for ways to expand their resources or achieve financial stability, M&As will continue to be commonplace in healthcare. By including data management considerations in M&A planning, healthcare leaders can protect their data, avoid workflow disruptions and set up their organizations for long-term success going forward.
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