Practice merger
management service
To assist merging entities in order to guarantee a smooth and successful transition
Primary care organisations are considering consolidation
Primary care mergers
In an increasingly challenging environment, many primary care organisations are considering consolidation as a key strategy to improve their business functions. We have compiled a thorough overview of the primary legal issues that we can assist you on, should you embark on the merger process. Additionally, transition can be difficult, particularly when organisations are undergoing a merger or restructuring, and we are here to assist merging entities in order to guarantee a smooth and successful transition.
Mergers in primary care
The term 'merger' is commonly utilised to describe a wide array of transactions within primary care providers. It typically refers to a scenario where two or more organisations unite under a single ownership structure. This ownership model can manifest in various ways, but for example purposes we will use a situation where two primary care organisations are merging (entity A and entity B):
- The owners of A may take over the ownership and operation of entity B with the owners of entity B falling away.
- The owners of entity A and entity B may join to jointly operate both organisations.
Whichever model applies, we will help you to weigh up the potential benefits as well as disadvantages to determine whether it is the right decision for you.
Benefits of working at scale
There are several potential advantages of merging, depending on the circumstances. For example, a merger may:
Stability - Create greater stability as one organisation or a group of organisations.
Opportunity - Create a greater opportunity to establish broad multi-disciplinary teams that enable an effective output to proper triage.
Access - Create the ability to offer increased or extended patient access
Reduce Costs - Reduce costs by bulk buying supplies across multiple sites and create the opportunity to reduce the base line costs through the sharing of functions, facilities, and premises.
Reduce workload pressures - Create the ability to reduce workload pressures and the over reliance on temporary staff by establishing a broader more permanent team.
Potential - The potential to gain greater clinical expertise and skills.
Merger pitfalls and mitigations
If a merger is not planned and prepared properly, it can lead to strains within the partnership and cause a breakdown in relationships.
It is important that all the parties communicate effectively throughout the merger to ensure it is successful. We act as an intermediary and meet with the main stakeholders regularly to discuss the combined ethos, the shared operational functions and ultimately the progress of the merger.
Business plan help
We will help you prepare a business plan which identifies:
The business proposal.
The shared objectives, aims and vision.
Background of the merging parties.
The business plan for year 1, 5 and 10.
Reasons and benefits of merging.
Communication and consultation strategy with staff, patients and commissioners.
Potential timeline.
Liabilities
We will also help you identify specific liabilities, costs and income which pre-date the merger. In connection with liabilities, we take action to mitigate the liabilities or to ring-fence them as part of the terms applying to the merger, so it is clear which party is responsible for which liabilities.
In addition, we ensure there is greater visibility on the likely recurring costs that may be borne by the owners of the merged parties. We will also help you to articulate clearly which contracts (commercial contracts) will form part of the merger and those that won’t.
In terms of income and costs, we help clients be clear (and document) how income and costs up to and including the date of merger will be apportioned. We usually complete this on a time basis, so those
attributable to a specific entity for the period pre-merger will be borne to the party/ parties that operated/owned that individual entity.
Decision-making processes
It is challenging to address this issue because the goal of the merger is usually to establish a more extensive partnership or ownership under an existing organisation. Nevertheless, we guarantee that decision-making processes are clearly defined in the recently formulated partnership agreement (in case of a merger between partnerships) or other operational agreements to provide transparency regarding the expectations of all parties after the merger, the level of influence each party will hold, and the decision-making procedures.
With partnerships, numerous opportunities are available. We offer guidance and, upon mutual agreement, assist in establishing a leadership team that includes members from all disciplines. This team compile a roster of critical decisions that necessitate approval from all partners or a specific majority.
It is possible that every organisation involved in a merger may have to compromise some of their independence, but we make certain that there is a common goal or belief shared by all parties. Conversations are guided in the initial phases to guarantee that everyone is aligned in pursuing the same goals and are knowledgeable about each other's anticipations.
Patient consultancy process
Prior to finalising the merger, we guarantee effective communication with patients regarding the proposed merger, as well as the implementation of a well-defined strategy for merging the operations of all entities involved.
Cost and time constraints during the infancy of a merger.
We will ensure you maintain a practical approach towards timelines. Based on our experience and expertise, we understand that hurrying through the process (especially in defining the values, operational procedures, and legal agreements overseeing the organisation or its stakeholder’s post-merger) increases the chances of introducing a phase of instability and doubt during the initial stages of the merger.
We’ll create a timeline as a reference point and to ensure deadlines are met to avoid any unnecessary delays. A cost analysis of the merger will also be established to understand the financial implications of the merger and our accountants will provide impartial financial advice to all parties. You will be advised on profitability, expenses, capital contributions, operating funds, tax, core contract value, assets, and redundancy payments.
Why choose our professiomal policy writing services?
We will arrange all the necessary paperwork for NHS England, Integrated Care Board and CQC approval.
We will commandeer the whole process of IT infrastructure and the technical merger processes.
We will ensure all due diligence is undertaken at key milestones.
We will liaise with PCSE and NHS Pensions.
We will facilitate discussions and create a plan for premises and how best to utilise them. There are several options available including operating from separate premises, operating from one of the current premises (albeit the approval from the ICB will likely be needed, as this will represent a variation to the core NHS contract that stipulates the need to provide services from the locality that is being dropped), or investing in a new purpose-built surgery premises.
We will consider how the premises are owned, whether they are leased or owned and if the latter, whether the premises are owned as a partnership asset or a personal asset – and how they will be handled on completion of the merger (i.e., will there be a sale and leaseback, will they be acquired by the continuing partners/ owners etc).
We will advise you on any tax consequences that may arise from the proposed handling of premises (whether CGT, SDLT or otherwise) will be considered early and borne in mind.
It may be agreed that some partners will retire either before or after the merger. Where this is the case, we will ensure the terms of the partner's retirement is agreed and documented. If they are to continue in a salaried role, establish the terms applicable to their employment and ensure they are agreed and documented.
We will facilitate discussion on whether there is a need to take measures in connection with the staff, because of the merger. For example, issues concerning duplication in roles, inconsistencies in duties or differences in salary and leave entitlements may arise.
Depending on the structure of the merger, we may need to assist with the requirement to inform and consult with staff in accordance with TUPE regulations.
