“It does not do to leave a live dragon out of your calculations if you live near him.”
That sage advice from an unlikely business strategist—The Hobbit wizard, Gandalf—is germane to the need to address risks of serpent-like monsters. It also applies to the peril faced by hospitals when buyers and sellers neglect to calculate data management into the timeframe of M&A transitional service agreements (TSAs). The wrong TSA timeframe threatens the success of all transactions and each company’s future.
Investment researcher Ponder & Co. attributes the “natural pauses” in hospital M&A to digesting the most recent consolidations. Fortunately, while the roar of perpetual transactions catches its breath, healthcare facilities have a chance to slay – or tame – data dragons by rethinking the data management process during the next transition, before the next transaction.
The purchase of a hospital goes well beyond acquiring its beds and debt, to the vast amounts of clinical and administrative data fueling day-to-day operations along with walls of legacy data. So this time of pause and pivot allowing greater deliberation in the M&A process is ideal for buyers and sellers to think through the process and time it will take for active and legacy data to be optimally and compliantly managed.
Going live on the new revenue cycle system too fast has been known to create a revenue hit. The fresh collectives will be stuck in archives instead of available in a legacy system for further run downs.
Prior to Signing
Here are 5 Steps to create a fully robust abstract that tames the “data dragon” as you negotiate and draft the TSA:
1. Map out which area of the organization will be most impacted by the system you are archiving: clinical, financial, perhaps a mix of revenue cycle and financial.
Decide which data is worth unlocking and transferring to a proprietary system and which can remain live as is.
2 Establish the proper format for delivery that allows easy archiving or conversion.
Know the options for freeing up the data and making it clean and consumable wherever it ends up. Determine which can be images and which must be discrete in another form.
3 Take steps to assure access to financial and clinical data so regulatory and audits can be managed on Day 1.
Know what needs to be available and the time it will take to extract for the system transition. Start with a wish list among stakeholders, then prioritize based on budgets and resources.
4 Be ready to capture dollars from open revenue or billing.
Determine if the buyer or seller will work down the AR, how long that will take, who gets the dollars, what it’s worth and which system to use. Working within the source system helps dollar recovery but may not offer the best ROI.
5 Learn about the archiving process and what’s required.
Particularly data that must be accessible for clinical care, to set realistic expectations about what you can access and where on Day One. Possibly change the workflow throughout the archiving process, educating users along the way.
It’s difficult to negotiate with a dragon breathing fire down your back. But here are 5 Tips on how to negotiate when the TSA is not working.
1 Plan each phase to avoid an extension, including contingencies for problems during migration to the new system or the archive.
Mitigate risks of circumstances beyond your control, such as a systems failure at either facility or community-wide power outrage. Pad time into the contract or tolerate the risks of extensions with potential cost and impact.
2 Develop separate extension timelines for archiving financial and clinical data.
Negotiate a step-down approach during migration as different systems may become unnecessary while others need to be archived, backloaded or converted to work down an AR.
3 Decide how to archive old data in the best format for proper use of the systems you will manage – and align the extension to bypass a rushed process and inappropriate extraction formats.
Avoid wading through one giant PDF without discrete data and the risk of submitting a patient’s entire medical record when legally required to report a single record for one visit or incident.
4 Negotiate knowing that a successful transition benefits the seller.
Sellers have to provide the data and might face challenges or need to conduct the work twice if the entities claim the data is wrong, incomplete or in an unusable format. Poor planning and process can harm a large hospital’s compliance and reputation as a seller.
5 Get help before signing again.
A consultant or HC contract expert can work with the archiving team to develop the most efficient approach and help make this a better experience.
About Shelly Disser
Dr. Shelly Disser began developing strategies, methodologies, and processes to enable health enterprises to efficiently archive, manage and activate legacy data more than 20 years ago. She founded one of the first data archiving companies for the health sector, competing solely with MediQuant. Shelly led the company for 15 years, selling it in 2014 to develop her own consulting firm for healthcare services. In 2017, Shelly joined her old competitor MediQuant to help lead the company supporting client advocacy. Today, this industry leader is vice president of solution delivery – offering her expertise in management, data strategy, and analysis.