This is the last blog in our four-part series. To view Part 1, Part 2, and Part 3, click below.
- “Healthcare Technology Part 1: Trends and Use Cases”
- “Healthcare Technology Part 2: Main Pain Points and Typical Profile”
- “Healthcare Technology, Part 3: Why Providers Say “I Gotta Have SD-WAN!”
Today’s blog focuses on merger, acquisition, and partnership within the healthcare vertical and how SD-WAN simplifies and streamlines the process.
Healthcare is constantly in a state of evolution, from advances in treatment, to state-of-the-art medical devices, to where services are offered and patients can be treated (hospitals vs. clinics). Evolution of the healthcare organization also occurs in the form of mergers, acquisitions, and partnerships (MAP), the success of which depend on the integration of each organization’s respective networks.
How fast is MAP growing? Let’s look at some facts:
- 2017: There were a total of 115 transactions that represented a 13% increase over 2016. (Source)
- 2018: In the first quarter of 2018, 30 MPAs were announced, a 11% increase from the same period in 2017.
- Large-sized deals: Of these 30, three had over $1B in annual revenue and another four had revenue between $500M and $1B.
- PwC, who handles many M&A deals, reported at the end of 2017 that it had experienced 13 straight quarters of more than 200 MPAs in healthcare, totaling $175.2B.
The trend of increasing MAP activities and the instance of high-revenue healthcare organizations participating in this trend shows no sign of slowing down. According to a study, the 2018 HealthLeaders Media Mergers, Acquisitions, and Partnerships Survey (source), the majority of respondents expect their MAP activity to increase over the next three years (see Chart 1).
Why Is the Network Important to MAP?
As is the case in any vertical, when two companies merge or one purchases another, the integration of the two can be very complicated, especially for very large organizations. In healthcare, the complexity exists in ensuring that patient records belonging to each company remain secure and accurate, but now must be accessible by both organizations. Companies are not successfully integrated until its data is fully integrated. And their respective data integration is dependent on a smooth network integration.
According to Health Catalyst, “top-performing MAPs across all industries focus first on data integration and have a plan to do so within six months post-merger. Additionally, 40% of the MPA value in healthcare can be tied directly to IT strategy. Without a focus on IT integration, that 40% is at high risk.”
Turning to SD-WAN
The challenge in the healthcare industry is how quickly and securely these organizations can bring new MPA sites into the parent network. Initially, the acquiring company will provide the MPA sites limited access to resources from the parent company and once fully on-boarded, they are converted into a production standard and provided full access to production and existing corporate sites.
Complexity is introduced because MPA sites already have their own connectivity in place. In a standard networking environment, the parent company would have to rip and replace existing circuits and infrastructure in the MPA sites to be integrated into the parent company. This process can often take longer than this six-month process, typically taking a year or two to fully move over all sites.
However, parent companies that have adopted SD-WAN do not have this issue. With SD-WAN, healthcare organizations are able to extend the SD-WAN network architecture into the newly acquired sites by deploying edges and with zero touch provisioning, adding them into the centralized management and orchestration portal. From this orchestrator, IT managers can easily monitor, manage, and control network activity across the entire environment.
Further simplifying the process is the ability to control how new sites and organizations are brought into the parent network through the use of customized profile creation. Without SD-WAN, entirely new equipment must be deployed to each site and highly-trained technicians must spend much time installing the new equipment, manually configuring it, testing it, and ensuring each that each is connected and accessing the appropriate information. SD-WAN eliminates this time-intensive process as its edges do not require a highly-skilled technician to install (it’s often as simple as plugging in two to three cords), and with pre-established profiles deployed instantaneously across all edges, human error is eliminated. This process not only eliminates potential mistakes but shortens the window to full data and network integration.
To learn more about Healthcare and SD-WAN, enjoy the following resources: