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October 17, 2018

When Two Brands Collide: Top 5 Brand Considerations for Health System Mergers and Acquisitions

  • By Brad Herrick

Merger-mania continues in the healthcare sector, driven in part by several external factors – lower reimbursements, stagnant patient admissions, ongoing cost pressures, and the accelerated transition to value-based care.

A recent merger that was just approved by the Vatican for Catholic Health Initiatives and Dignity Health, is a deal that would create the nation’s largest not-for-profit hospital company from a revenue standpoint. However, mergers have also been vertical, such as megadeals like CVS Health’s merger with Aetna that was recently given the green light from the Justice Department.

Admittedly, mergers can often mean chaos for health system brands. Especially when leaders become laser-focused on the financial, operational, and clinical aspects of these new unions. This can leave marketing execs dealing with fragments of various visions, cultures, processes and brand strategies.

A recent Capital One survey of healthcare executives found that while 38% had M&A transactions in their growth plans, 90% of them said the transaction failed to live up to expectations. *

Following are a few things healthcare marketers should consider when two brands collide:

  1. Respect the Past.In healthcare, many employees are drawn to their profession and the company culture for altruistic reasons rooted in that company’s faith-based past. Whether you are a not-for-profit or for-profit system, it’s essential to bring to life the respective legacies of each organization. Consider talking to some of the people who have been the cultural curators – community members, care givers and patients. Capture and merge these stories into narratives that relate to employees across both systems.
  2. Brand from the Inside Out.Every health system has thousands of brand ambassadors that are engaging with patients every day. Make sure that they can understand, appreciate and communicate a high-level elevator pitch about the reasons behind the merger or acquisition. Consolidate internal communications platforms, from intranets to organization town halls. Have a well-designed internal engagement system that goes beyond the top-down communication cascades we have all used in the past. Engage employees in a two-way dialogue and encourage them to spread a positive message to the community via social media.
  3. It’s the Customer Experience that Counts. Every brand begins and ends at the customer experience. The cleverest marketer in the world can’t overcome patient experience gaps that could result from a merger and acquisition. Healthcare marketers should align their efforts with the customer experience and clinical operations teams to understand the customer journeys for both organizations. Then, proactive and responsive communications should be developed that make the transition as seamless as possible for customers.
  4. Develop a Brand Strategy.Not all leadership teams can appreciate that branding is not the same as marketing. Take time to develop a well-designed brand strategy, starting with a discovery process that reviews each organization’s brand evolution, guidelines and key attributes. Establish a cross-functional team that considers the pros and cons of various brand approaches – Master Brand, Endorsed Brand or a House of Brands. Lastly, design a strategy that is comprehensive, but phased out and agile enough to respond to new market trends and customer feedback.
  5. Break Out of the Sea of Sameness.Mergers and acquisitions present opportunities for marketers to rethink their brand that might have been dulled by years of insular thinking. An exercise I recommend: Paste up (literally) in a conference room collections of brand “artifacts” from each organization. Evaluate the divergence or similarities of the brand artifacts hanging on the walls. Are the logos interchangeable with the message? If they are, consider approaches that elevate the brand (or brands) to a higher level of distinction. Engage your teams, but also bring in folks from outside the organization to offer new perspectives.

The last tip for healthcare marketers: Keep calm. Sometimes mergers and acquisitions can be overwhelming, exposing disjointed processes own both sides. The most important thing to do is build relationships with your new co-workers and join forces to fight those branding battles together.

*Capital One survey 2017