The strategic power of rationalization of applications in mergers and health acquisitions
Merions and acquisitions of health care continues to reflect and sink. The activity culminated in 2024 with a wave of large -scale transactions, but now health care organizations adopt a more cautious approach – pulled in part by wider economic -contrary winds such as proposed Medicaid cuts, evolving prices and uncertainty around the 340B program. Analysts provide that the merger activity will continue, but in adjustment and departures, shaped by new strategies and innovative agreement structures which are increasingly involving a mixture of large systems, regional actors and non -traditional partners.
Whatever the rate of transactions, mergers and acquisitions transactions remain intrinsically complex, bringing together not only financial models, but thousands of employees, millions of patients and vast physical and digital infrastructures. One of the most expensive and consecutive challenges is integration.
Over the past decade, health systems have quickly digitized, which has resulted in application environments swollen with redundant, underused and inherited systems. Analysts estimate that 20 to 30 percent of computer system resources within merged health systems are in double or obsolete. Without controls, these systems continue to drain resources, to introduce cybersecurity vulnerabilities and to slow innovation long after the conclusion of an agreement. This is where the rationalization of applications becomes not only useful, but essential.
The rationalization of applications is a strategic lever which can provide an immediate return on investment and a long -term business value. By investing capital budgets in the rationalization and archiving of implementations, health systems can considerably reduce operating expenses – reducing license costs, infrastructure requests and support charges. At the same time, they reduce risks, improve access to data and prepare the way for evolutionary innovation.
By rationalizing applications a fundamental part of the mergers and acquisitions strategy from the start, health care organizations can save immediate cost, reduce risks and lay the foundations for a lean, unified and ready -to -future business.
Here are three key steps:
1. Integrate the interfunctional governance of the first day – Strong governance is the basis of any effort to rationalize successful applications. Without this, inertia and internal resistance can derail even the most promising strategies. In a scenario of mergers and acquisitions, where teams of different cultures and systems meet, governance helps align stakeholders in the clinical, IT, legal and financial fields.
2. Operationalizes downgrading with a scalable “mounting chain” – The scale and speed of rationalization of applications during an agreement of mergers and acquisitions require accuracy, efficiency and reproducible processes. The most successful health systems deal with downgrading as a factory “mounting chain”. This approach includes progressive planning for supplier management and contracts, budgeting, data migration, compliance and end user support. In the first phase, technological teams should tackle tasks such as data ingestion, conversion and migration. The next phase covers the actual downgrading itself, as well as the technical examination, the support of the end user and the regulatory compliance. A structured “mounting chain” approach transforms cleaning applications into a reproducible commercial process that reduces spreading and unlocks savings.
3. Creation for long -term value with activation of modern data – The rationalization of applications is not a unique cleaning – it is a strategy for creating a sustainable IT environment and ready for innovation. The key is to have a modern data management platform that supports real-time access, patients’ longitudinal files, regulatory compliance and advanced analysis. Instead of archiving data in passive and inaccessible silos, avant -garde organizations use active archiving solutions that fit perfectly with the DSE workflows – allowing clinicians to recover the longitudinal stories of patients in real time. These solutions stimulate not only innovation, but also help health systems to meet regulatory requirements, improve cybersecurity and reduce the maintenance of risky and obsolete systems.
Even if the activity of Fussements and Acquisitions of Health Care fluctuates and that the transactions structures are evolving, the rationalization of applications remains a strategic lever which should be integrated into the investment thesis of the first day. A well -executed plan does not simply reduce it to spreading or lower costs; It secures the company, ensures compliance and creates the conditions for the prosperation of innovation. By consolidating the inherited data in the active archives and modern data of Lakehouse data, organizations unlock high -quality real -time data that can fuel AI tools, the appearance of clinical trials, information on population health and predictive modeling. In today’s volatile financial climate, health systems cannot afford to neglect the proven return on investment which comes from the consolidation of the inherited data in the active archives and the Data Lakehouse platforms.
Photo: Kritchanut, Getty Images
Jason Z. Rose, MHSA, is a serial entrepreneur who brings 30 years of technological innovation, commercial development, strategy and leadership experience in health care. He is a visionary, with a proven experience of taking disruptive products from the concepts of white table with high annual income supported to allow business success. Jason is currently CEO and a member of the Cleanese Board of Directors, a data activation platform company that is associated with health care organizations to increase data value, governance and transparency.
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