Family Doctor Association
National Conference
Dr Rory McCrea
Chairman
ChilversMcCrea
Federations
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Been there!
Done that!
What really works ???
What to avoid !!!!
Dr Rory McCrea - background
• GP since 1992, and still in active practice in
Waltham Abbey
• Medical Director, West Essex Primary Care
Organisations for over a decade
• Established the UK First Corporate Provider of
NHS General Practice and Urgent Care with
over 40 services
• Established the UK First Acute medicine in the
Home provider
Dr Rory McCrea -: Background
• Established the UK First (Culyer funded)
Primary Care Research Network, East London
and Essex Network of Researchers (ELENoR)
• Now collaborating in form Stellar Healthcare,
local GP Co in Harlow and Epping Forest
• Medical Director of Stellar Healthcare
• International and National Business Advisor in
the Healthcare sector
Why Federate?
• Strengthen the capacity of practices to
develop services out of hospital
• Form an entity capable of tendering
• Efficiency savings/economies of scale in back
office functions
• Improve local service integration across
practices and other providers
Why Federate?
• Enhance capacity of practices to compete with
external private sector companies
• Strengthened clinical governance to improve
quality and safety of services
• Develop training and education capacity
• And Research?
Areas for thought!
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Why federate?
Who will we federate with?
When should we federate?
Where will we operate?
What will we do once federated?
How will we do it…. and all of the above?
Mergers and Acquisitions
(M&A)
• Popular means of increasing or protecting
market share
• Motives for merger include practical,
psychological, opportunist, or mix of all three
• Desire is 2+2=5 effect
Lessons!!!
• Half of all Mergers and Acquisitions (M&A) fail
to meet financial expectations
• Financial and Strategic factors are insufficient
to explain the high rate of failure.
• Human factors dominate too
• The successful management of integrating
people and their organisational cultures is key
M&A failure rates
Some organisations would do better to simply
bank their money rather than invest.
Who will benefit…
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Those who sell their shares
Those who negotiate the deals
Bankers
Lawyers
Accountants
Traditional reasons for M&A failure
• Pay too much as investment
• Poor strategic fit
• Failure to achieve potential economies of
scale because of financial mismanagement or
incompetence
• Sudden and unpredicted changes in market
environment
Bits that get forgotten!!!
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Acts of sabotage
Petty theft
Increased staff turnover
Increased Sickness and Absenteeism
(all happening when there is a greater need for
employee loyalty, flexibility, co-operation and
productivity)
The Human Factors
• Underestimating the difficulties in merging
cultures
• Underestimating the problem of skills transfer
(and skills deficit)
• Demotivation of employees
• Departure of key people
• Spending too much energy on getting it all off
the ground and not enough post merger
planning
The Human Factors
• Lack of clear responsibilities, leading to post
merger conflicts
• Too narrow a focus on internal issues to the
neglect of the customers and the external
environment
• Insufficient research about the merger
partners or organisations
More Human Factors
• Coming together, however positive for Drs,
may trigger uncertainty and fears of job losses
• Difference between practices coming together
vs a takeover by newly formed company of an
existing service
• The former might provide for longer
uncertainty and anxiety
• The latter might provide for quick, brutal
operation with overt conflict!!
Marriage!!!!
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Happiness
Personality clashes
Misunderstanding
Cultural differences
Communication problems
Mistaken assumptions
Leads to conflicts!!
Be aware of people!!
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Consider cultural fit
Involve HR professionals
Cultural Audits
Change management initiatives
Concentrate on communication at all levels
Monitor employee stress levels
Be aware of people!!
• Fair and objective reselection processes and
role allocation
• Provide management with the skills and
training to sensitively handle M&A issues
• (including redundancy)
• Create a super-ordinate goal which will unify
work efforts
Do !!!
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Do take advice
HR
Legal
Finance
Business Advisors
Technical help where needed
Do !!!
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Business plan
Commerce
Consider Cultures
Think about who pays the cheque and what
do they want
• Win/Win
Do !!!!
big difference
Make a
to the quality
of patient services, health outcomes and
improved experience ….in a positive direction ;)
What ChilversMcCrea can do for you.
• Create relationships to assist you towards
success by making use of our very wide
contact base
• From finance to all types of governance, we
can support you from start up or help build
business further for established organisations
• Support you with excellent commercial and
clinical development, pathways etc.
What ChilversMcCrea can do for you.
• Help you develop strong and effective
mechanisms of clinical and other governance
• Provide expertise and innovation in service
delivery, with outcomes research, particularly
in relation to clinical pathways and new
technologies
• All of the above in the community or the
hospital, or indeed in between
Thank you
Dr Rory McCrea
rory@chilversmccrea.com
07715538510