Rehab therapy market consolidation is a hot topic that’s only gotten hotter over the last few years. But when large companies start to absorb your local competition faster than you can blink, that hot topic suddenly becomes uncomfortably close—and you may feel pressured to consider a voluntary sale before you’re swallowed up by the flames. I mean, why resign to getting gobbled when you can form a mutually beneficial partnership, right?
But what happens if—after going through your practice acquisition checklist—you realize that your gut is all twisted up about the deal on the table? Well, you may want to listen to that gut feeling, because there’s a chance you’ve ignored some or all of the following signs that you’re not actually ready to sell your practice.
1. You don’t want to leave your brand behind.
You’ve built your practice from the ground up—from picking a company name and cementing your mission statement, to hiring other therapists and establishing a hub of loyal patients. And throughout all of that, you’ve established your practice’s unique brand: the combination of workplace policies, goals, and culture that forms your practice’s identity. If you love the atmosphere at your practice and truly believe in your mission statement, it’s totally natural to hesitate when considering a merger. What if a sale or partnership destroys everything you, your employees, and your patients love about your practice?
The Solution
While your practice might not get to keep its name, your brand can live on if you merge with a company that’s excited about your mission statement. In other words, if you put a huge emphasis on patient satisfaction, make sure the company you join forces with also focuses on patient satisfaction. If you’re dedicated to providing therapy to underserved populations—or to low-income patients—then hold off on a merger until you find a partner company that also seeks to help those patients.
This article from DeSantis Breindel even asserts that successfully merging brands—as opposed to overwriting one and keeping the other—is the key to a profitable merger or acquisition: “Following a merger or acquisition, a brand empowers a business to translate the strong financial and strategic rationale of the transaction into a value proposition for employees and customers.”
2. You’re dreading the idea of taking the backseat.
If you’re sticking around post-consolidation, you probably won’t get to call all of the shots anymore—even if you retain some sort of leadership role. That’s not to say you won’t be able to influence a decision here or there—or suggest a new direction for the practice (e.g., targeting a different patient population)—but your days of having the final say are more or less kaput.
The Solution
Losing your voice in business decisions isn’t necessarily a bad thing, though. Less decision-making means fewer responsibilities, which could mean fewer headaches. The other silver lining: you probably won’t be head of the clean-up crew if someone makes a subpar executive decision.
That being said, if you’re worried about getting stuck with a litany of new rules that aren’t so great for your clinic (and that you’re unable to change), hold off on a merger until you find a partner company that won’t put your voice on mute. This may be difficult if you’re getting acquired by a large company, but you can always try to negotiate some decision-making autonomy into the acquisition contract.
3. You’re nervous about losing control of benefits.
As the practice owner, you have the final say on everything—including the benefits and salaries you give your employees. Maybe you delegate the nitty-gritty bits of benefits programming to an HR rep, but at the end of the day, you can make decisions about things like 401k matching, PTO distribution, bonuses, and CEU reimbursement. When you consolidate practices, though—regardless whether it’s a merger or an acquisition—your previous benefits and compensation packages are all liable to change.
The Solution
Try to merge with a company that will approach the consolidation process with respect and empathy. What does that mean? Essentially, you want to ensure that the leadership will either blend the different benefits packages together (more typical in a merger), or gradually transition you and your employees over to the existing benefits package (in an acquisition scenario). This will reduce your staff’s stress and anxiety about the transaction—and help guard against employee attrition. And that’s crucial, because as explained in this Business Insider article, on average, “20% percent of employees voluntarily leave the company soon after a merger announcement.”
Partnering with a company dunks your employees into an ice bath of new insurance plans, different PTO policies, and limited retirement plans, on the other hand, is a surefire way to lose key talent. The bottom line: It’s on you to advocate for your staff when negotiating the terms of the sale. Identify which benefits are most important to your employees, and dig in your heels so they don’t get lost in the wind.
4. You’re worried that your employees will struggle to integrate.
Let’s say your employees have used one EMR and one RCM service for the past five years—and they just got the hang of a new PRM software, too. If you ask them to change platforms, there will be mutiny. Well, maybe not mutiny—but they could get frustrated or discouraged while learning the ropes of an entirely new system.
And that’s not the only integration you’re worried about. You’ve perfected your practice’s productivity goals, and you know what numbers your therapists can hit before they start to feel burned out. If your consolidation partner sets too-high productivity standards, that might lower morale and bump turnover. Not to mention, you’ve cultivated a positive, supportive, and respectful work environment by putting a heavy emphasis on hiring for culture. Will that environment survive consolidation?
The Solution
Create a rock-solid technology integration plan.
Ask your consolidation partner if your practice can stick with the software and billing solutions you already have in place. If it doesn’t make a big financial difference to the other company, your staff might get to keep on truckin’ with the processes they’re comfortable with. But if your consolidation partner wants your clinic to swap systems, then insist on a technology integration plan that includes software training and support for your staff.
In this Forbes article, John Barrows—who sold his business to an enterprise—suggests taking your integration plan a step further: “Always have a point person on each end who is involved in the process and focused on integration. These two people together must be empowered with the authority to get things done.”
Advocate for reasonable productivity standards—and get them in writing.
In terms of productivity standards, it’s once again up to you to negotiate, negotiate, and negotiate some more on behalf of your staff. You’re the one signing on the dotted line, and you’re in the best position to advocate for your therapists and get reasonable productivity standard requirements in writing as part of the deal.
There’s no negotiating culture.
Cultural integration plays a huge role in successful mergers and acquisitions, and culture clashes are often to blame when consolidations fail. So, make sure your practice vibes with the other company’s values, beliefs, and behaviors before you agree to a merger or acquisition.
5. You’re not ready to put your practice’s future into someone else’s hands.
Whether you’re sticking around to keep an eye on your practice via an alternative leadership role, or you’re completely exiting the business, it can be tough to hand the reins over to another person. It’s a huge act of trust—especially if you’re emotionally invested in your practice and employees.
The Solution
Have faith in the people who are purchasing your practice. If you’ve thoroughly evaluated the company you’re selling to and truly believe it’s a good fit—from company culture to financial goals—then all you can do is step back and trust in the new leadership.
At the end of the day, only you can decide if a consolidation—à la merger or acquisition—is right for your practice. But amid all the talks and negotiations, be sure you ask yourself these six things:
- Are the companies’ missions compatible?
- Will you have a voice that can influence change?
- Will you and your employees keep key benefits?
- Will you and your employees have technology integration support?
- Will you and your employees be overburdened by productivity goals?
- Do the companies’ cultures mesh?
Are you considering selling your practice? What questions do you have? Let us know in the comment section below.
