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Practice dilemma: Planning to merge

We are thinking of merging with another practice, where do we start?

Start by asking yourself the following three key questions.

1.            What is the business case?

Ask yourself what is at stake here, focusing on four main areas.

Clinically, you may be better able to provide specialist GPs and nurses to cover a wider patient base after a merger. You might find a reduction of overheads because provision of financial, HR, clinical and administrative management can cover a larger organisation.

For patients, does the ‘catchment area' justify a merged practice?

You should also consider how a merger might impact on your existing contract.

2.            What does it look like from a human perspective?

Bear in mind that you will not only need to make sure the two practice teams start working together, but also that staff feel comfortable about being part of a larger organisation.

Staff may react to the news, especially if they feel their jobs are at stake, so don't forget to consult sensitive on how to manage the transition from practice to merged practice.

3.            How do we go about it?

It is a good idea to have an initial confidentiality agreement, so that all information supplied by one practice to the other is kept confidential. There needs to be full and honest disclosure between both practices about financial and management information. The information supplied needs to be 'tested' and questions raised, if appropriate (known as the 'due diligence' process). Ask your accountant to comment on the financial information supplied. Ask your lawyer to prepare an agreement covering the merger which, among other things, requires each merger partner to 'warrant' (i.e. contractually promise) the truthfulness of the information which each has supplied to the other.

Oliver Pool is an associate at specialist healthcare firm Veale Wasbrough Vizards