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Best Practices for Strategic Communications During a Transaction

In a session at the Becker’s Hospital Review Annual Meeting in Chicago on May 18, Rex Burgdorfer of Juniper Advisory and Martin Machowsky, senior vice president for strategic communications at McGuireWoods Consulting, a subsidiary of the law firm McGuireWoods, discussed the importance of coupling hospital transaction preparation and process design with strong communication strategies to share the transaction message to hospital stakeholders.

Mr. Burgdorfer began the session emphasizing communication advisors as an added value to a transaction process. With communication strategy, hospitals share potential changes involved in transactions to stakeholders such as physicians, community members, unions and regulatory agencies.

Mr. Machowsky believes beginning with the end in mind is an effective approach to supplementing a transaction process with a communication strategy. "Establish objectives up front. Think more broadly about what it means to complete the deal. You do not want to ask the wrong questions," said Mr. Machowsky.

In order to begin with the end in mind, Mr. Machowsky and Mr. Burgdorfer recommend four objectives.

1. Maximize value for the community
2. Keep stakeholders informed and engaged
3. Meet the boards fiduciary duties
4. Minimize disruption of hospital operations

"If you invest the time and resources up front, you will have a smoother process down the road. When the FTC gets involves or when the nurses union gets agitated, it is better to have a communication response plan in place, rather than trying to create and implement a plan simultaneously," said Mr. Machowsky.

Next, Mr. Burgdorfer transitioned the conversation toward the design and implementation process. He believes there are three standout objectives for the early-stage design process for transactions.

1. Enable strong decision-making. It is important to help directors achieve fiduciary duty by allowing them to understand the basics of the transaction not only for understanding but for comparison to other transactions as well.

2. Maximize financial and non-financial terms.
There are important social standards such as the level of charity care provided and the retention of employees unions. "While these may not have dollar sign in front of them, they are hugely important."

3. Develop sound design. Design a process that is developed and implemented with the goal of receiving regulatory approval.
Mr. Machowsky closed the presentation by returning to his point that strong communication is important for an effective transaction. He focused on a three-phase communication process that hospitals should utilize to communicate resulting changes from a transaction.

3 communication phases


1. Strategic direction. Communicate objectives and goals to the hospital board, the executive team and medical staff leadership.

2. Pre-announcement.
Set the context by focusing communication toward internal stakeholders, community thought leaders and employees.

3. Announcement/post-announcement.
Communicate the transaction and its outcomes to internal stakeholders, approvers and the public, which includes patients.

More Articles on Hospital Transaction Processes:

Restructuring or Turning Around a Hospital: It Doesn’t Mean Bankruptcy

Strategic Thoughts for Independent Hospital Consolidations

6 Recent Hospital Mergers & Acquisitions








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