INDUSTRY WATCH Finance & Revenue Cycle

What Happens to Customer Satisfaction Following a Health IT M&A?

How do mergers and acquisitions (M&A) in the health IT vendor space impact these com- panies’ customers going forward, post-sale? Certainly, health IT vendor M&A is common- place, and recent years have seen several big announcements in the electronic health re- cord (EHR) space specifically, such as Cerner acquiring Siemens and Allscripts acquiring McKesson’s hospital IT business. A KLAS report provides an update on re- cent M&A activity by examining customer satisfaction before, during, and one year af- ter a merger or acquisition. The research revealed that almost all M&As result in notable change in customer satisfaction—the odds that customers will be left untouched are less than 20 percent—and the chances of satisfaction improving or de- clining are almost identical (42 percent and 40 percent, respectively). “This shows that M&A activity is not inherently bad or good, but there are clear differentiators between companies who see improvement and those who see a decline,” said KLAS researchers, who got responses from more than 2,000 customers. “Vendors’ deliberate choices around cost, culture, and value determine which way the pendulum will swing,” KLAS researchers add- ed. What’s more, proactively making the right choices is essential—vendors who see a sig- nificant decrease in customer satisfaction in the first year typically take three to five years to recover, if they recover at all, the research noted. Meanwhile, poor customer satisfaction in the wake of a merger or acquisition has a significant impact on customer retention, according to KLAS. On average, the number of customers looking to leave their vendor doubles one year after a poor merger or ac- quisition. The top cited reasons are frequent nickel-and diming, a decline in the quality of phone/web support, and stagnant product development. Conversely, a strong merger/acquisition strengthens both customer loyalty and evan- gelism. This is because customers feel their vendor is aligned with their goals, cares about their success, and provides a sense of stability, the research revealed. What’s more, companies with a healthcare-specific focus are more likely to see increases in customer satisfaction after an M&A since such compa- nies are often more aware of what’s required for healthcare customers to achieve prom- ised levels of success.

4 Policy & Value-Based Care

HHS Proposes Stark Law Changes That Would Broaden Providers’ Maneuverability Under APMs

On Oct. 9, the Department of Health and Human Services (HHS) an- nounced significant changes to the Physician Self-Referral Law, known as the “Stark Law,” and the Federal Anti-Kickback Statute, in order to allow for the leaders of patient care organizations participating in ac- countable care organizations (ACOs) and other value-based payment arrangements, greater leeway to create the structures they need to create, in order to thrive under alternative payment. Among the al- lowable activities will be the sharing of data analytics services be- tween patient care organizations, more complex post-discharge care coordination, and data- and software-sharing around cybersecurity. Prominent associations are already applauding the move, which was published as a proposed rule. The announcement read, “HHS announced proposed changes to modernize and clarify the regulations that interpret the Physician Self- Referral Law (the “Stark Law”) and the Federal Anti-Kickback Statute. The proposed rules provide greater certainty for healthcare providers participating in value-based arrangements and providing coordinated care for patients. The proposals would ease the compliance burden for healthcare providers across the industry, while maintaining strong safeguards to protect patients and programs from fraud and abuse. The proposed rules are part of HHS’s Regulatory Sprint to Coordinated Care, which seeks to promote value-based care by examining federal regulations that impede efforts among providers to better coordinate care for patients.”

The announcement stated that, “Below are [a few] examples in-

volving coordinated care, value-based care, data sharing, and patient engagement activities that, depending on the facts, could currently be difficult to fit under existing protections and could potentially be protected by the Stark Law, Anti-Kickback Statute, or Civil Monetary Penalties Law proposals if all applicable conditions are met:

• In an effort to coordinate care and better manage the care of their shared patients, a specialty physician practice could share data ana- lytics services with a primary care physician practice.

• Hospitals and physicians could work together in new ways to coordinate care for patients being discharged from the hospital. The hospital might provide the discharged patients’ physicians with care coordinators to ensure patients receive appropriate follow up care, data analytics systems to help physicians ensure that their patients are achieving better health outcomes, and remote monitoring technology to alert physicians or caregivers when a patient needs healthcare intervention to prevent unnecessary ER visits and readmissions.

• A physician practice could provide smart pillboxes to patients without charge to help them remember to take their medications on time. The practice could also provide a home health aide to teach the patient and the patient’s caregiver how to use the pillbox. The pillbox could automatically alert the physician practice and caregiver when a patient misses a dose so they could follow up promptly with the patient.

• A local hospital could improve its cybersecurity and the cybersecurity of nearby providers that it works with frequently. To do so, it could donate, for free, cybersecurity software to each physician that refers patients to its hospital. The hospital and the physicians often share information about their patients, so it is important that there are no weak links that might compromise everyone else. | NOVEMBER/DECEMBER 2019

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