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Four Branding Lessons Learned in Our Hospital M&A Work

Healthcare merger and acquisition (M&A) activity continues to accelerate, hitting a record high in 2018 and amassing a total deal value of over $30B in Q1 2019 alone. Looking forward, we should expect to see a growing number of transactions as health systems respond to the consumerization of healthcare and seek out partnerships in pursuit of operating at scale.

Hospital M&A is complex. It requires numerous steps to complete the transaction before post-close integration work can begin. But this integration demands a great deal of consideration, especially when it comes to your newly merged brands. Hospital brands are unique in that they are truly ingrained in the communities they serve. It can be especially challenging for a hospital system to acquire or merge with another system that has been a mainstay of its neighborhood. Often times it’s difficult for the community – and even the hospital staff to let go of the emotional attachment they have with the legacy brand. It’s not unusual for people to continue to call their local hospital by its old name years after an acquisition if conversations around branding aren’t happening prior to the transition. Branding during M&A must be handled precisely and managed over time. Here are a few key takeaways we’ve discovered in helping to steer hospital brands during and after an M&A:

Consider your migration strategy. The brand doesn’t necessarily need to turn overnight. You may move from an endorsed strategy to the acquirer’s name or opt for a co-branded scenario where the acquired brand is dropped over time, easing into the transition. Either way, because you’re doing away with the legacy brand that has some equity in the marketplace, the migration should be handled in a very sensitive way. It’s important to carefully assess the equities of each hospital brand and leverage them as you move forward.

Define the value proposition and benefits to all stakeholders in the community so each audience understands the significance of the brand and the relationship they have with it. Learn the valued behaviors of each hospital and take a “best-of-both-worlds” approach in defining your new brand. 

Engage employees and help them understand what the new brand means to them. Physician buy-in is key to a smooth transition. But in addition to getting your staff on board, it’s critical that the leadership of the combined system has the tools to articulate the business’s benefits through the brand.

Build your language and communications plan. The brand transition should be clearly laid out in external and internal communications. Educate employees to change their language and their habits and encourage influencers within the organization to use the right language to impact others.

To learn more about the implications of M&A on brand, click here or contact us.

Contributors

Strategy Director, InterbrandHealth