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Family Doctor AssociationNational Conference
Dr Rory McCreaChairman
ChilversMcCrea
Federations
• Been there!• Done that!• What really works ???• What to avoid !!!!
Dr Rory McCrea - background
• GP since 1992, and still in active practice in Waltham Abbey
• Medical Director, West Essex Primary Care Organisations for over a decade
• Established the UK First Corporate Provider of NHS General Practice and Urgent Care with over 40 services
• Established the UK First Acute medicine in the Home provider
Dr Rory McCrea -: Background
• Established the UK First (Culyer funded) Primary Care Research Network, East London and Essex Network of Researchers (ELENoR)
• Now collaborating in form Stellar Healthcare, local GP Co in Harlow and Epping Forest
• Medical Director of Stellar Healthcare• International and National Business Advisor in
the Healthcare sector
Why Federate?
• Strengthen the capacity of practices to develop services out of hospital
• Form an entity capable of tendering• Efficiency savings/economies of scale in back
office functions• Improve local service integration across
practices and other providers
Why Federate?
• Enhance capacity of practices to compete with external private sector companies
• Strengthened clinical governance to improve quality and safety of services
• Develop training and education capacity• And Research?
Areas for thought!
• Why federate?• Who will we federate with?• When should we federate?• Where will we operate?• What will we do once federated?• How will we do it…. and all of the above?
Mergers and Acquisitions(M&A)
• Popular means of increasing or protecting market share
• Motives for merger include practical, psychological, opportunist, or mix of all three
• Desire is 2+2=5 effect
Lessons!!!
• Half of all Mergers and Acquisitions (M&A) fail to meet financial expectations
• Financial and Strategic factors are insufficient to explain the high rate of failure.
• Human factors dominate too• The successful management of integrating
people and their organisational cultures is key
M&A failure rates
Some organisations would do better to simply bank their money rather than invest.
Who will benefit…
• Those who sell their shares• Those who negotiate the deals• Bankers• Lawyers• Accountants
Traditional reasons for M&A failure
• Pay too much as investment• Poor strategic fit• Failure to achieve potential economies of
scale because of financial mismanagement or incompetence
• Sudden and unpredicted changes in market environment
Bits that get forgotten!!!
• Acts of sabotage• Petty theft• Increased staff turnover• Increased Sickness and Absenteeism
(all happening when there is a greater need for employee loyalty, flexibility, co-operation and productivity)
The Human Factors
• Underestimating the difficulties in merging cultures
• Underestimating the problem of skills transfer (and skills deficit)
• Demotivation of employees• Departure of key people• Spending too much energy on getting it all off
the ground and not enough post merger planning
The Human Factors
• Lack of clear responsibilities, leading to post merger conflicts
• Too narrow a focus on internal issues to the neglect of the customers and the external environment
• Insufficient research about the merger partners or organisations
More Human Factors
• Coming together, however positive for Drs, may trigger uncertainty and fears of job losses
• Difference between practices coming together vs a takeover by newly formed company of an existing service
• The former might provide for longer uncertainty and anxiety
• The latter might provide for quick, brutal operation with overt conflict!!
Marriage!!!!
• Happiness• Personality clashes• Misunderstanding• Cultural differences• Communication problems• Mistaken assumptions• Leads to conflicts!!
Be aware of people!!
• Consider cultural fit• Involve HR professionals• Cultural Audits• Change management initiatives• Concentrate on communication at all levels• Monitor employee stress levels
Be aware of people!!
• Fair and objective reselection processes and role allocation
• Provide management with the skills and training to sensitively handle M&A issues
• (including redundancy)• Create a super-ordinate goal which will unify
work efforts
Do !!!
• Do take advice• HR• Legal• Finance• Business Advisors• Technical help where needed
Do !!!
• Business plan• Commerce• Consider Cultures• Think about who pays the cheque and what
do they want• Win/Win
Do !!!!
Make a big difference to the quality of patient services, health outcomes and improved experience ….in a positive direction ;)
What ChilversMcCrea can do for you.
• Create relationships to assist you towards success by making use of our very wide contact base
• From finance to all types of governance, we can support you from start up or help build business further for established organisations
• Support you with excellent commercial and clinical development, pathways etc.
What ChilversMcCrea can do for you.
• Help you develop strong and effective mechanisms of clinical and other governance
• Provide expertise and innovation in service delivery, with outcomes research, particularly in relation to clinical pathways and new technologies
• All of the above in the community or the hospital, or indeed in between
