M&A Series: The Impact of Consolidation on Provider Data Management – Hospital, Health System and Provider M&A

Large scale mergers among healthcare providers have routinely been grabbing headlines over the past several years. In 2017 alone, there were 115 transactions at the health system and hospital level (up 13% from 2016), with 10 of those transactions involving sellers with net revenues of $1 billion or greater.[i] Most notably, the California Department of Justice recently cleared the $28 billion merger of Dignity Health and Catholic Health Initiatives.

Supporters of consolidation in the industry argue that this activity increases savings for patients through economies of scale – specifically, by driving down prices through increased provider leverage with payers. Patients, hypothetically, benefit from lower prices and a more tightly connected care network. Opponents of the mergers and acquisitions wave argue the loss of competition in the open market limits consumer choice and removes an inherent barrier to price gauging.

Whether one is for or against the M&A trend, there is an often-ignored issue —what happens to all the mission-critical data—including credentialing, enrollment, and provider directory information—when medical groups and health systems consolidate?

Consider this: the healthcare industry spends $2.1 billion dollars every year to ensure that provider data is accurate.[ii] Inefficient and redundant processes persist within all entities that manage provider data, including health plans, groups, and health systems. And there is a huge problem with reliability and integrity of this data. The integrity breaks down even further as M&A activity increases among providers.

These factors beg the question, are provider groups and health systems considering the implications of mergers on their data management strategies? Or more to the point, do they have a solid plan for how to ensure the integrity and continued flow of data as they bring disparate systems together?

Although there are countless implications and downstream consequences in the consolidation of health systems, we believe that the question of how to preserve provider data integrity is an important—if often overlooked—consideration. How can providers avoid inefficient and financially detrimental data problems during and after mergers? Here are 5 tips to help manage provider data through the M&A process:

1. Shift the approach from siloed, task-oriented data management to organization-level provider data management

Stop thinking about credentialing, enrollment, and claims data as separate activities. While provider data underpins all these tasks, a holistic approach towards managing provider data at the organization level will reduce both data inconsistencies and administrative costs.

2. Invest in technology to manage provider data

Short term investments in high quality tooling and streamlining of provider data input channels for tasks like credentialing and enrollment will save money in the long run. Organizations should consider which technology systems they use carefully and plan in detail for potential consolidation of that data. Keep in mind—siloed data repositories are extremely expensive to maintain and lead to inaccurate data because of inconsistent capture and erosion. An enterprise-level solution is a more sustainable option.

3. Prioritize data management considerations while streamlining operational and organizational structures

Consider providing newly consolidated teams additional training in credentialing and enrollment, or even more broadly, overall provider data management. As an organization grows or changes due to a merger, it is important to revisit and evolve the processes and structures around provider data. Prioritizing data and its effective management are key to the continued growth of your new provider group or health system.

4. Qualify and confirm directory information

If health plans are not calling regarding mismatched provider information already, they will be, especially as your group becomes larger. Constant solicitations and directory updates are disruptive to operations and distract from patient care delivery. Maintaining an accurate provider directory will reduce the disruption of audit calls.

5. Budget for continued investment

As the industry changes, particularly as population health and value-based care trends grow, data remains the lifeblood driving innovation within the industry. At the heart of these trends is need for accurate provider data. Continued investment in technology and resources to manage provider data is critical to long term success.


crankfrog has extensive experience helping organizations navigate their provider data problems. If your organization has recently gone through a merger or consolidation and needs help with the organizational and technological hurdles that come with an integration,  email us at info@crankfrog.com.


[i] Kaufman, Hall & Associates, LLC. 2017 in Review: The Year M&A Shook the Healthcare Landscape, 1/29/2018. https://www.kaufmanhall.com/sites/default/files/kh_report-ma-year-in-review_d4-rebrand.pdf.

[ii] Council for Affordable & Quality Healthcare. Defining the Provider Data Dilemma: Challenges, Opportunities and Call for Industry Collaboration, 9/29/2016.: https://www.caqh.org/sites/default/files/explorations/defining-provider-data-white-paper.pdf.