Lou Ellen Horwitz, MA
Finally, after months of looking for the right health system partner, you have a deal to purchase your clinics. Congratulations! There are many positives in your decision to partner to achieve your vision. And get ready. The next year or so, for yourself and your leadership team, will be extremely exciting, sometimes frustrating, and often a bit terrifying. To help you prepare, we offer some tips for surviving before, during, and after the sale.
- Make changes fast. If you have been considering any major changes to your staffing models or leadership structure or individual pay increases/promotions, make them quickly—as you may soon lose control of those kinds of activities. Once you are part of the health system, there will likely be many more “stakeholders” to include in decision-making, and you may not have the levels of freedom that you are used to. Part of your due diligence will be providing names and positions and salaries of all of your employees, and you want to have those exactly as you want them before that list is submitted.
- Lock in your leaders. No matter what you have arranged for your core leadership team as part of your sale, they are going to be nervous. You are also going to need them to do significant post-deal, pre-close work in the months to come, so you don’t want them to be distracted by career worries if at all possible. If you have not been able to include positions for them as part of the sale so they will all be applying for positions in the health system, locking them in through the due diligence phase may require some additional incentives (post-close bonuses, etc.). Alternatively, they may get recruited early in the process for a system role, leaving you with holes in your operations team. Lastly, depending on their backgrounds and career trajectories, working for a health system may not seem attractive to them and they could begin to look elsewhere immediately. Ideally, they have been included in the sales process so this can all be discussed openly, helping everyone to have a smooth transition. However, you must be prepared for some leaders to depart before the transaction closes.
- Keep the secret. For several months, you and your senior leaders have been involved in presenting to various potential partners, so keeping the secret that you are shopping your clinics is nothing new—but keeping the secret that you have actually sold is going to be more difficult. The months after your agreement is signed will be distracting and time-consuming for your leadership team, and most (if not all) of your pending initiatives will have to be delayed while you work through due diligence requirements and ongoing discussions of that information.
As you’ve been preparing for a potential sale, hopefully your advisors have ensured your house is in order from a documentation standpoint, because your team will now be producing countless reports and summaries of how you do things and what your results have been. These will likely be provided to a consultant-driven project management team (see below) whose sole job it is to do this work (while you are still supposed to be running a business). If possible, prepare your leaders to carve out time to do this work; just ensure all involved understand it will also be happening nights and weekends.
Prep your leaders on how to talk to their teams about new projects being on hold, without disclosing the pending sale. Anything and everything from planned (or even already signed for) new locations to in-clinic process improvements to individual promotions may be under scrutiny, and deferrals may be requested. Your leaders will need to be armed with a way to talk about delaying things that doesn’t violate their nondisclosure agreements, but also doesn’t sacrifice your employee engagement and culture until you can announce. And when you do announce, remember to put yourself in the shoes of your frontline staff and providers. They haven’t been living this process for a year like you have, so you need to go back to the beginnings of why you are selling to help them work through the change process properly.
- Try to stay focused on operations. All of the distractions during pre-close work are probably going to take a toll on your operations. It is difficult, but important, to do what you can to prevent this from happening. First, because your conditions of sale may include a performance clause that requires you to maintain a certain level of profitability or visit volumes. Second, because if the deal does not close you want to still have a viable business. Third, because it is the right thing to do for your team and patients. This may mean creative solutions such as programs that allow promising staff to try out management positions (“clinic manager in training”); this can also assist beleaguered leaders with operations oversight.
- Prepare to deal with consultants. It’s almost certain the health system will have a transition team to manage the process and your clinic’s integration into the health system structure. This team will probably be led by consultants. Their work can include managing everything from paperwork processing to change management to communication and information technology. The activities around this transition are the first time you may fully understand how different life will be for you and your team. Here’s some advice: make friends with the consultants. At this point they may be your voice in the health system. They may attend meetings you will not be invited to attend, and will be able to promote or derail your intentions. Look for opportunities to cultivate and leverage that relationship.
- Learn the lay of the land. Decision-making often works differently in a health system than it does in an entrepreneurial organization. Entrepreneurs would never consciously choose to do something that’s bad for their business—but in a health system, you may have to do that. The system, in part, exists to serve the system-level mission and vision, and that orientation leads to decision-making styles that may not be best for an individual urgent care location if viewed in isolation. For example, in your urgent care center you may provide primary care services (at the very least not turning away those visits). As part of a health system you may be required to actively redirect those patients to the system’s primary care providers. You may be required to cease promoting urgent care over the ED, and so on.
Because the two settings are structured to serve different purposes, they typically attract different types of leaders. For example, seniority and titles are important in a health system in ways that may seem inconceivable to an entrepreneur. In a private urgent care operation, the primary focus of leadership is on building a business. In a health system, there is the additional focus of leadership on building a career. Going out on a limb is not necessarily the norm; or at least what they perceive as “going out on a limb” may seem extraordinarily minor to you. This is not “wrong”—it is a sign that you may need greater awareness of the desire for upward mobility (and the political demands of ensuring that track) that is part of the life of a health system administrator.
Collaborative decision-making takes on a whole new meaning with the involvement of multiple departments (such as Quality, Compliance, Human Resources, Lab, Imaging, etc.) whose frames of reference are not a “retail” orientation but a system-centric orientation. Take time to build relationships with these leaders and educate them on urgent care and retail medicine. Reassuring them that you are also dedicated to quality, compliance, engaged employees, and so on will make it easier for them to support your needs for potential tweaks to their systems in the coming months. Patience is also a virtue at this point. Politics = need for consensus = SLOW…this is a norm in health systems relative to privately owned centers. Learn it.
Lastly, recognize that the leaders you will encounter are experts in their fields, and expect and deserve your respect—but remember you also deserve theirs. They are probably in new territory, but are not used to others knowing more than they do, so you will need to be thoughtful with any criticisms of the systems they want to replicate in urgent care. Your role at this point is to educate. Understand that you are in this for the long haul, and take the opportunity to develop diplomacy skills. Saying “That’s ridiculous, it will eliminate our entire profit margin” will alienate your audience in a way that may not be recoverable. Health system leaders are rarely as blunt as entrepreneurs, and you do need their buy-in to move forward, so take the time to learn their languages and norms.
- Mind the money. This is a critical area if the health system wants their new urgent care lines to be profitable. In a health system, billing is designed around ‘000s, not ‘00s. You make money off 100 visits at $200, while a system makes money off two visits at $10,000. The thought of spending staff time to chase down $187 may seem ludicrous to the health system, but is necessary in an urgent care operation. There may not even be reports to get you the information you need, especially if you are switching EMRs. Again, your role is to educate, and perhaps advise on some restructuring (depending on your number of clinics) or retaining your existing billing for a time to ensure the new urgent care line has a chance at profitability (if that is a goal).
- Manage general expectations. Since you are deliberately seeking a sale, you obviously have expectations of the benefits of selling. You have probably worked hard to engage your leaders in understanding the benefits as well and they, in turn, will need to educate their teams about the benefits. While all of this is critical to the success of the transition, be cautious in establishing expectations. First, understand that your organization will experience a year or so of lost momentum with the work required for integration into the system. This will be a struggle for your leaders who are used to moving forward at a certain pace. Prepare them with this knowledge so their expectations are realistic. Staff and providers (once the sale is announced) may indulge all of their fantasies of fantastic pay and benefits now that you are no longer a struggling private organization watching every penny. Be very deliberate about managing change with this group, because none of these fantasies may materialize. If your centers are expected to remain profitable, expansion of benefits or equalization of the system may not be possible, especially at the outset. If the MA/RT/provider grapevine in your area is at all viable, they will know what their health system peers are making and expect this immediately if it is more—so prepare for how you will manage this messaging.
- Manage your Prepare to get fired. Though it seems inconceivable that your new system partner (that has continually praised you and your team for all you have done) would consider removing you, it happens more often than not. Here’s possibly why: you are too powerful. The system’s goal is to bring your clinics into the fold, and they may believe that as long as you are around the team’s loyalties will be to you, not the system. And they are correct (this will be true for a while even if you are gone). In many ways, your clinics probably ARE you, and as long as you remain in place the team cannot truly transition from a standalone. Hopefully, your team will be very upset that you are not part of the deal! So your new job is to help them understand why so that they will stay to see that your dreams are fulfilled. This is a harsh reality, but if you are expecting it you can plan for it. Often there can be a transition arrangement where you remain in a consultant role, but you should approach this very thoughtfully with the best interests of everyone in mind.
- Remember your roots. You WILL have “What have I done?” moments. “If I’d known they were going to do this to us…I would never have sold….” Your leaders WILL resent you at least once. “We had such a great thing going…remind me again why we did this?” All of these feelings are normal and ultimately part of the development of the business and team you worked so hard to recruit and build. During these times it is important to bring your team back together face-to-face to share your feelings together and remind yourself and your team of your shared vision behind the sale. I promise, just being back together as a group will make everyone feel better.
Throughout, don’t let your team forget about the cultural elements that made you such an attractive acquisition. Together, you built something that was unique, and an essential part of the value to the new company. The entrepreneurial spirit that your team brings will help the system continue to grow and evolve—just as much as the system resources and infrastructure will help your urgent cares continue to grow and evolve. Even if you are viewing it from afar, seeing your personal vision realized is a pretty gratifying way to mark the end of this part of your career.
Lou Ellen Horwitz, MA is Director, Staff Development and Communications for MultiCare Health System. She has also served as Executive Director of the Urgent Care Association of America.