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California’s Federally Certified Well being Facilities (FQHCs) are responding to a number of vital coverage modifications and reforms aimed toward enhancing well being look after the state’s numerous communities. They need to develop new capabilities and develop current ones whereas persevering with to wrestle with historic limitations round workforce and organizational infrastructure. Mergers between FQHCs can provide a path to attain the organizational infrastructure, scale, and attain required to satisfy these calls for and supply high-quality, culturally responsive care to all sufferers.
Whereas FQHC mergers in California have traditionally concerned a financially at-risk FQHC turning to a bigger and extra steady one for acquisition, California is more and more seeing equally sized and positioned well being facilities exploring mergers. These “mergers of equals” current distinctive alternatives and challenges.
This challenge temporary explores two mergers of equally sized FQHCs in California within the final two years. Every gives some broader reflections and themes that could be relevant to different FQHCs exploring merger alternatives with equally sized and positioned companions. These embrace:
- Scale to ship worth and influence. Enhanced monetary sustainability issues however will not be the driving drive to discover a “merger of equals.”
- Leveraging service strengths. A merger presents a possibility to leverage the service strengths of every accomplice throughout a wider set of web sites and geography.
- Organizational tradition. A merger of equally sized and positioned FQHCs presents a extra advanced problem in aligning operations and growing a shared organizational tradition.
- Shared identification. Crafting a shared organizational identification that displays the expectations of each organizations in a merger of equals requires comparable thoughtfulness throughout planning.
- Government management. The rising wave of FQHC CEO retirements within the subsequent a number of years presents a pure inflection level and alternative for organizations to discover a merger.
- Belief and partnership. Belief, honesty, and communication, significantly between the CEOs, symbolize a vital ingredient to a profitable merger resolution and transition.
- Going through arduous selections early. Surfacing key sticking factors early, corresponding to figuring out the persevering with CEO, organizational title and identification, and surviving company identification, might pave the way in which for a profitable merger course of.
- Rising functionality, not decreasing employees. Many equate a merger with employees downsizing or efficiencies. For the mergers highlighted on this paper, as with many different FQHC examples, the merger didn’t lead to employees reductions.
In abstract, a merger of equals might pose distinctive issues associated to organizational tradition, identification, or govt management continuity, however may additionally current distinctive promise to raise the long run influence and affect of FQHCs.
Concerning the Writer
This challenge temporary was ready by Rafael A. Gomez, MPP, founder and proprietor of El Cambio Consulting.
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