Providing quality care can mean joining with another group. Finding the best combination can take time and effort, but even when groups work out the agreement between themselves and decide to merge, they can find unexpected roadblocks. It is important for leaders within the practice to recognize that a successful merger means more than just an agreement between the two groups.
Why would a merger fail?
Even if the two groups come to an agreement, there remain a number of reasons the merger could fail — including a block from the Federal Trade Commission (FTC).
In a recent example, Care New England, a large group out of Rhode Island, reported a failed merger led to severe financial problems. The group tried three different merger proposals. Ultimately the FTC blocked this fourth proposal, a merger between two hospital group giants.
The groups are now looking for a new way to move forward.
Why would the FTC block a merger?
Unfortunately this is not the first time the feds have stepped in and blocked a healthcare merger. In past cases, the FTC has pointed to concerns about antitrust law violations as certain mergers could lead to reduced competition fueling a spike in prices and a drop in quality care.
How can we better ensure our merger moves forward?
The importance of thorough due diligence cannot be understated. Groups are wise to find a third party that is aware of the potential implications that come with a merger, such as local and federal regulations. Ideally, that third party can review the potential implications and offer resolutions to help set the merger up for success.
Attorney John Rivas is responsible for this communication