10 Data Management Steps for Success Before, During and After M&A

Summary

Mergers and acquisitions (M&A) continue to play a significant role for healthcare organizations focused on controlling costs and delivering high quality patient care. The expected compound annual growth rate (CAGR) for healthcare mergers and acquisitions from 2023 – 2028 is around eight percent. Industry experts report a shift from aggressive expansion to strategic consolidation. In part, this is because dealmaking obstacles like interest rates seem to be falling and US antitrust regulators may adopt a more relaxed stance.

With 98 percent of healthcare CEOs expecting to pursue M&A, divestures or strategic alliances in the next 12 months, the need to restructure the application portfolio will continue to be important. 

The actual merger may be the first step but making it work can be another story. M&As can be complex with cultural, financial, and technological issues either blending well… or not. One of the most important (and sometimes overlooked) part of a successful merger is a strong data strategy.

In a study, 80 percent of healthcare CIOs and IT leaders reported that integrating disparate IT systems complicates their roles. Further, 84 percent believe that clinicians could allocate more time to patient care if healthcare operations were consolidated into a single platform.

Data Management Steps for a Successful Merger

Managing data during M&A involves several key steps to navigate a smooth transition and to maintain data integrity. The overall goal to find efficiencies and savings by centralizing operations is paramount; however, this effort is a large undertaking.

The health of an organization’s IT infrastructure can be an important part of its value. And, having a solid plan for merging the data of the organizations is vital to the overall success of the merger. In a study of health system leaders who have experienced M&As, 87 percent said the M&A impacted how their facility or health system manages its clinical data.

We have identified ten best practices for M&A data management that include:

  1. Involve the Data Governance team – Determine the organization’s overall IT goals for the M&A. Identify the scope of IT management, procedures, and policies. Create a clear strategic vision that outlines guiding principles and a strategy.
  2. Review data sources/systems – Take a thorough look at all the data sources and systems involved. Take a look at both organizations’ inventories which should include a solid document of what data sources exist, where the data sources are stored and more.
  3. Plan for data integration – One of the biggest challenges in an M&A scenario is integrating different IT systems. The complexity is compounded when the merging organizations have different EHR platforms. It is vital to develop a plan that includes an IT integration timeline with time built in to review and test any data that is migrated to a new system. Keep an eye on the master patient index as that often presents the most challenges. Expect this step to be time-consuming and have the potential for data quality issues.
  4. Review cybersecurity and compliance – Different IT infrastructures can have varying security measures. It is important to take the time to assess the risks and create a security plan that considers the best practices for encryption, access and other security protocols. Consider penetration testing for mergers and acquisitions which can uncover vulnerabilities.
  5. Include archiving in M&A planning – It is helpful to include legacy data planning upfront during M&A discussions instead of after the fact. There likely will be several legacy applications that can be decommissioned with the data stored in the archive to maintain compliance with regulatory and organizational requirements.
  6. Consider an Archive Steering Committee. This is an internal team charged with keeping the archive project implementation moving smoothly. This group could be a subset of the Data Governance team and should include representatives from across the enterprise such as legal, finance, IT, clinical, etc.
  7. Have a dedicated internal project manager – Another key role to assign is a project manager to help get the archive project up and running. It is important to have an internal resource focused on tracking the application inventory. This person can help eliminate roadblocks to keep project plans on track.
  8. Plan for application rationalization – Mergers and acquisitions often come with redundant applications that require application rationalization and standardization. This step involves eliminating outdated or duplicate systems as they create inefficiencies, patient safety concerns, increase costs and lack interoperability. There are large and small decisions to be made about which applications need to be kept and which can be decommissioned. Aside from the go-forward EHR, 94 percent of CIOs at healthcare provider organizations report they still are operating with legacy applications. In fact, the average hospital uses 10 EHRs and health systems use as many as 18 different EHRs.
  9. Engage an active archive solution – With the application rationalization strategy as a guide, the next step is a legacy data management strategy that includes a plan for the complete lifecycle for clinical, financial and administrative data from both organizations that can be decommissioned. The data that needs to be retained for legal and compliance purposes can be stored in a secure solution such as HealthData Platform™
  10. Plan for the future – Think ahead with a goal of developing a repeatable, scalable lifecycle data management process that will serve the organization for long-term success. About 60 percent of healthcare providers currently have scalable processes for data management. This signals that there is work ahead to be better positioned with a sustainable plan that accommodates long-term growth.

Challenges to expect during mergers and acquisitions and what to do to limit frustration. 

Planning ahead will help prepare the organization for a merger. That said, there are challenges that may arise. The three areas below are areas we have seen as possible rough spots that organizations sometimes experience during M&A.

  • Operational disruptions. The thought of disrupting patient care due to IT system issues can be daunting. The best offense is to develop a comprehensive plan that involves research, design, and scope with special attention to minimizing business impacts.
  • Cultural challenges. Resistance to change can be a challenge throughout both organizations during M&A. From an IT and applications perspective, it can be helpful to communicate (with support from the Governance Team and C-suite) to help inform the clinical, HIM and business team members about the goals, strategy, and timelines. Keep an option open for questions and plan on training staff in new applications or processes.
  • Workflow changes. It is likely that the clinical workflows of each organization are very different. This can include different ways of charting, different note templates, etc. It is helpful to get clinician buy-in as early as possible to support minimal frustration.

Benefits of a strong data management plan before, during and after a merger

The primary benefit of a strong data management plan during a merger or acquisition is that done right it can be a major pillar of the ultimate success of the M&A itself. With most mergers driven by a need for operational efficiencies and improved patient care, the flow of data is key to realizing these goals.

Before the merger: A strong data management plan can assist with due diligence to help with fair valuation. It also supports the strategic planning needed to help identify synergies and align goals.

During the merger: A robust data management process creates the foundation for integration and boosts security and compliance efforts.

After the merger: Done well, the data management plan delivers on the goals of the merger. This includes improved operational efficiency and patient care with the interoperability of data across all continuums and access to historical data through an active archive. A streamlined application portfolio and a gameplan for the future are major benefits as well.

Check out this case study to learn more about how an integrated health system in the northeast saved $2+ million by implementing a legacy data management strategy after acquiring four hospitals and 83 physician practices.

Is your organization in the planning stages of a M or A? We can help. 

Harmony Healthcare IT is a trusted partner for healthcare organizations who need to consolidate data stores and meet regulatory and patient care requirements to ensure secure access to historical data. Ideally, we are involved early in the process of a merger or acquisition to support the planning and then the implementation of the data management program.

We are a recognized leader for success with large and complex legacy data projects. We answer the call as your first archive vendor, and sometimes we pick up where other organizations stalled and couldn’t deliver. Our broad and deep experience with more than 550 unique software applications used specifically in healthcare helps ensure smooth project delivery and improved customer satisfaction. Plus, our HealthData Platform™ is an industry leading solution with advanced integrations and superior product functionality.

We are ready to help your organization plan and implement a solid lifecycle data management program that will deliver on the promise of a merger or acquisition.

Let’s connect.

Merger and Acquisition data management steps for success

The outlook for healthcare mergers and acquisitions (M&A) is gaining momentum that experts suggest is driven by consolidation, technological advancements, and an anticipated relaxed regulatory environment. With 98 percent of CEOs planning to pursue M&A in the next 12 months, this blog provides some important data management steps to support success throughout each phase of M&A. 

May 15 2025

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