Optimising healthcare transactions: Tactics for success in a complex deal environment
Abstract
The healthcare landscape is increasingly complex, characterised by economic uncertainty, regulatory challenges and rising operational costs. This paper provides a strategic framework for healthcare leaders to navigate this challenging deal environment. Despite economic pressures, merger and acquisition (M&A) activities remain robust, driven by strategic considerations rather than pure expansion motives. Important trends include horizontal and vertical consolidation, innovative joint ventures, strategic partnerships and direct equity investments, all aimed at enhancing operational efficiency, expanding into emerging value pools, and fostering innovation. This paper also delves into the evolving transaction strategies within healthcare systems, highlighting the importance of programmatic capital allocation and structured innovation investments. It outlines the crucial factors for successful execution, such as modernising capital allocation; creating effective governance structures; and building capabilities to test, learn and scale innovations. By leveraging these strategies, healthcare systems can better position themselves for sustainable growth, improve patient outcomes and create value in an increasingly dynamic and competitive market.
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Author's Biography
Feby Abraham , PhD, is Executive Vice President, Chief Strategy Officer at Memorial Hermann Health System, where he is responsible for leading strategy and strategic planning for the organisation and for driving its strategic investments, corporate development, strategic market insights and innovation efforts. Feby has more than 20 years of experience in the healthcare sector. Prior to joining Memorial Hermann, he served as a partner at McKinsey & Co., where he worked for nearly 12 years advising private equity funds across sectors, including healthcare. Prior to this, in early 2008, he worked as a research investigator with a focus on data analytics and mathematical modelling at GlaxoSmithKline (GSK). Feby holds a PhD in mechanical engineering from Rice University and has a bachelor of technology from the Indian Institute of Technology, Mumbai. Feby sits on the board of Memorial Hermann’s joint ventures, including its partnership with GoHealth Urgent Care and with Accentcare on home health and hospice. He also serves as an independent director at CapitalRx, a next-generation tech-enabled pharmacy benefit management company, as well as Hamilton Health Box, which is a disruptive mobile and on-site clinical model designed for small- and medium-sized employers as well as rural communities. Recently, Feby has been named one of Modern Healthcare’s Top Innovators of 2023 and 2024.
Ross Clements is Vice President of Strategy at Memorial Hermann Health System. In this role, he leads system-wide strategic efforts tied to Memorial Hermann’s enterprise priorities, including value-based care and growth, and drives annual strategic planning processes in partnership with leaders from across the system. Ross also supports Memorial Hermann’s Innovation Hub, corporate development activities and strategic direct investments. Ross joined Memorial Hermann in 2016 to support the Neuroscience Service Line prior to transitioning into his role in Corporate Strategy in 2019. Since then, he has led efforts to develop and implement Memorial Hermann’s enterprise and service line strategies, as well as support other corporate development activities. Among his many contributions in this space, Ross has played an integral role in Memorial Hermann’s transition to a service line operating model in partnership with its executive leadership team and has led multiple large-scale initiatives for the system tied to value-based care. He has also led a wide range of strategic partnerships, joint ventures and other corporate development activities on behalf of Memorial Hermann. Prior to joining Memorial Hermann, Ross served as a manager with Bain & Company, where he led multiple engagements with Fortune 1,000 clients, advising executives on growth opportunities, full-potential analyses, strategic road maps and optimisation of corporate operating models.
Chris Shea serves as Memorial Hermann Health System Deputy General Counsel and General Counsel of Memorial Hermann Health Plan. He has been with Memorial Hermann since 2012 and leads the system’s strategic transactions, focusing on mergers and acquisitions, joint ventures, partnerships and value-based arrangements. Chris also manages Memorial Hermann’s legal transactional team, handles corporate governance matters and oversees all of the system’s health plan legal work. Chris has practiced law since 1996, and prior to joining Memorial Hermann his roles included General Counsel for a large downtown medical centre and Chief Legal Officer and Chief Compliance Officer for a hospital management company. His experience also includes over eight years in private legal practice. Chris serves as an adjunct professor at University of Houston Law Center, where he teaches a course in healthcare transactions. Chris earned his undergraduate degree from the University of Notre Dame in Notre Dame, Indiana, and his law degree from the College of William and Mary Marshall — Wythe School of Law in Williamsburg, Virginia.
Citation
Abraham, Feby, Clements, Ross and Shea, Chris (2024, December 1). Optimising healthcare transactions: Tactics for success in a complex deal environment. In the Management in Healthcare: A Peer-Reviewed Journal, Volume 9, Issue 2. https://doi.org/10.69554/UYUN3909.
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