Family Doctor Association National Conference

Dr Rory McCrea Chairman 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

Thank you

Dr Rory McCrea [email protected]

07715538510