Alternatives to Merger Alternatives to Merger Legal and Structural - PDF document

Alternatives to Merger Legal and Structural Considerations Alternatives to Merger Alternatives to Merger Legal and Structural Considerations Legal and Structural Considerations Dan Mulholland Dan Mulholland Horty, Springer & Mattern Horty, Springer & Mattern Common Objectives in Affiliations Common Objectives in Affiliations • Maintaining/enhancing clinical services • Maintaining/enhancing clinical services • Physician recruitment and retention • Physician recruitment and retention • Information system upgrades • Information system upgrades • Improvement and expansion of facilities • Improvement and expansion of facilities • Lower operating costs/economies of scale • Lower operating costs/economies of scale • Access to capital • Access to capital • Continued community involvement • Continued community involvement • Managed care contracting • Managed care contracting • Clinical integration • Clinical integration 1

Alternatives to Merger Legal and Structural Considerations Structural Options Structural Options • Joint operating agreements • Joint operating agreements • Affiliation • Affiliation • Alliances/Networks • Alliances/Networks Alliance Models Alliance Models • Shared services/GPO • Shared services/GPO • Insurance platform • Insurance platform • Parent with limited reserved powers • Parent with limited reserved powers 2

Alternatives to Merger Legal and Structural Considerations Network Models Network Models • Geographically integrated • Geographically integrated nonprofit network nonprofit network • “Rent-a-brand” • “Rent-a-brand” Antitrust Integration Antitrust Integration Requirements Requirements • Common management • Common management • Board appointment/removal • Board appointment/removal • Treasury function • Treasury function • Fundamental corporate changes • Fundamental corporate changes 3

Alternatives to Merger Legal and Structural Considerations Authority Matrix Authority Matrix There are three options with respect There are three options with respect to everything done within a system: to everything done within a system: 1) Network can take action 1) Network can take action unilaterally unilaterally 2) Network must approve the action 2) Network must approve the action 3) Network approval not needed 3) Network approval not needed Consider these options with respect Consider these options with respect to each key function, such as: to each key function, such as: • Corporate matters • Corporate matters • Organizational leadership • Organizational leadership • Outside relationships • Outside relationships • Financial matters • Financial matters • Contracts • Contracts • Clinical services • Clinical services • Labor and personnel decisions • Labor and personnel decisions 4