Episode 5: Navigating Healthcare M&A: Strategies for Success and Patient-Centric Outcomes

“Starting with that end in mind, casting that vision, we brought about stories of patients using the products, having an experience where this is what their life was like before. This is what it was like afterwards. We kept bringing it back to, remember, we're doing this for the patient.” - Elizabeth Hutson, Principal Consultant, Owner of EGH, LLC & Keynote Speaker

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Episode Spotlight: Regenerative Medicine and Business

Bradley Bostic talks with Elizabeth Hutson , Principal Consultant, Owner of EGH, LLC , with 25+ years of experience, about mergers and acquisitions (M&A) in healthcare. They discuss strategies for successful consolidation, focusing on improving patient care and organizational value.

Liz introduces her SMSO framework—Stabilize, Mobilize, Stabilize, Optimize—to guide organizations through integration. She stresses the importance of stability, clear communication, and empathy during transitions. Bradley highlights the need for cultural alignment and regulatory preparation, sharing insights from his experience at hc1 .

The episode emphasizes that M&A success is about more than numbers; it’s about building partnerships that enhance patient care. Leaders who focus on vision, empathy, and disciplined execution can create lasting value.

The Trend of Healthcare Consolidation

Hey there, friends of Boombostic Health. Thanks for joining us for another episode. I'm really excited about today's guest, Liz Hutson, who has been a healthcare leader for 25 years, believe it or not. And she has developed this special knack for a couple of things. One is public speaking. She's an emerging keynote speaker, and she talks about the challenges of execution and how to overcome those challenges and succeed. A lot of it's based on her experience with martial arts, which is pretty cool. So I'm not going to mess with her. I'm pretty sure she can do a roundhouse kick and knock me right out. So glad to have you on the show today, Liz.

Liz has her own consulting firm that focuses on making healthcare organizations higher performing enterprises, and all the complexities that go into that, and has a particular expertise in M&A. There's this major trend of consolidation in the healthcare world. So what we're going to talk about today is:

1. Why is that trend occurring?
2. What does it look like to succeed with M&A?
3. How are the benefits accruing to patients and to the bottom line?
4. What the methodology is that you can follow to ensure that you have a successful outcome with M&A.

I remember my father, who is 82 now and retired, but he used to be a banker and for his entire career, and he would use the phrase, "two dogs don't make a thoroughbred." I thought that was always like a pretty good phrase. So I'm sure in some cases, M&A is doomed from the beginning. In other cases, though, things don't work well from an execution perspective.

From Chemical Engineering to Healthcare Leadership

Before we dive in, though, I would love just to hear from you what it is that brought you into healthcare to begin with and then also talk a little bit about your education, which is extremely impressive as a chemical engineer. So you have a certain level of scientific depth that a lot of people don't have in the consulting world. So love to hear more about your background, why you're passionate about healthcare, and then we'll dive into the M&A topic.

LIZ: Absolutely. Well, thank you. Thank you for having me on. And yes, I started off in chemical engineering at the University of Illinois, and I'm a math science person. By nature with that, I'm interested in health care. So the first job that I had was with Bristol Myers Squibb, and it really was a yes to an opportunity that came along the way. I can't say that I was initially super passionate about health care, and that's why I went into it. But it was an interesting opportunity.

BRADLEY: And that was right out of school??

LIZ: That was right out of school. OK. So I was a senior, probably about March, just before graduation and trying to figure out where I'm going to be working, got this amazing opportunity and had a few other consumer products things as well. But health care seemed interesting to me, very relevant to all of us. We all have seen the hospital or seen a doctor or whatever it might be somewhere along the way. And it's very relevant.

BRADLEY: So it's so interesting that you say that. I think oftentimes it's lost on people that health care, like any other major part of our economy, is a business. It's the only business that has not yet been reconfigured to focus on the customer. I suspect that's part of what you do in your consulting.

LIZ: That's right. The first role that I had at Bristol Myers Squibb, I was working as an engineer. To your point, I studied chemical engineering. I worked in process engineering. So that was really all around a new product developed and now you want to scale that. How do you build that beyond from a bench top scale to a manufacturing scale? So that was what I was working on.

BRADLEY: Is there an example of a product that you worked on back then?

LIZ: It was adult medical nutritional - Boost nutrition.

BRADLEY: No way. That's my gosh. I've had at least 8000 grams of protein from boost.

LIZ: Yes. OK, there you go. So we worked on that. I thought it was fascinating to see the scale up. And I was even more interested in why do we make what we make? What if this is interesting to them? What is not? So there's a high protein version. There's a regular version. There's a high fiber version.?

LIZ: There's an organic version now.?

BRADLEY: Is there??

LIZ: I don't know. I doubt it. It's been 20 years. Sorry. That was sarcastic. But yeah, so when I was getting into that, I really was interested in the why.

BRADLEY: Well, that's scale, too. If you think about people talk about what can scale, you were on the front lines very early in your career, seeing something that affected so many people.

LIZ: That's right. In a lot of ways.?

BRADLEY: And all joking aside, clearly, that product has been consumed a lot of times by people who just aren't getting the kind of nutrition they need in their diet and so it has done a lot of good.

LIZ: Absolutely. I think that was my first real foray into working in health care, really understanding the impact of what that could be and then I had the opportunity to work at Cardinal Health. When I was at Cardinal, I started to lean in a little bit more to what would it look like to work on that side of things.

So I transitioned from engineering. My first job was still with engineering at Cardinal. I transitioned into marketing and marketing where I was doing the product development, really understood customer needs and following them around and going, what are your pain points that you're articulating? But then also, what are some of the things that you don't even realize that you need and how can we surprise and delight you? So working and developing products from the idea state and then my background is unique because I could work with engineers and I could work with a manufacturing team and say, this is how we need to make this, scale it up, work with customers and start to launch those things.

BRADLEY: Interesting. So is Boost considered a health product or a health care product? Or how does that fit?

LIZ: It falls in a nutraceutical world, right? So adult medical and nutritional. So another part of their business was infant formula, too. We're still talking in that nutritional space.

BRADLEY: Yeah, interesting. OK. So you didn't actually realize that you had such a big consumer experience there right out of the gate.

LIZ: Yeah.?

BRADLEY: And then you decided at some point, hey, I can take my talents and my experience to go help other people in health care. Was it something where you had been planning that and thinking about it? You maybe started doing some work on the side or how did you get into this?

LIZ: I'd love to say I have a very thought out plan of what I'm going to do five years, 10 years, 25 years from now. I think most of the time, the opportunities that I find myself in are a curious opportunity that presents itself, that feels within my genre or feels within the segment that I'm interested in. I say yes and I figure if it doesn't work out, I can try something else and so when I finished with Cardinal - and it was really an interesting idea that I had. Consulting might be interesting.?

I had someone approach me about this. I thought, let's start the consulting business and it was a yes. I thought I'd try it for a year if it worked out wonderful. If it didn't, then I'll go back to corporate America. Within the first few months, I knew it was perfect for me. So 13 years later, I'm still in it.?

BRADLEY: So for all the University of Illinois students, they should or should not have a crystal ball at this point?

LIZ: Probably not. No, no, I don't think so. I mean, I think it's important to know what you're good at, what you're interested in. So what is your passion area? And then where is there a need? If you can find the intersection of those three things, you've got something powerful.

So you don't have to have it all figured out. But I think if you just step in that direction, I think that's going to make a smart move.?

BRADLEY: I think that's right. And I think very rarely does that end up being your first job.

LIZ: Yeah, right. Oh, right.?

BRADLEY: You gain this body of experience, and I have actually gotten to the point where I act from a work perspective. Sometimes I don't know whether it's a weekday or weekend or any because it's interesting what I'm doing and it makes an impact on people. There's a way you can do the work as an end in and of itself and then the economics are an output from that.

LIZ: That's right.?

BRADLEY: But when it comes to these major health care moves and companies deciding to consolidate this, it's a lot. You know, it gets pretty complicated. Our company, hc1, actually recently made an acquisition and it's going really, really well. The reason is that the people are a great fit culturally. But it takes a lot of work every day. You know, like any relationship, you've got to make sure you're investing in that and doing the right things.

Heck, I don't know. Maybe your methodology that you have would be a power up, though, to even help us do more. I'm excited to hear more for selfish reasons. You know, but thanks for that background. You know, great that you're an Illinois person that's keeping your talents here in Illinois and growing the, you know, the base of health care. Are your clients generally around this part of the country or are they all over the country, all over the world, all over the world, all over the world?

LIZ: Yeah, we started off a little bit kind of narrow here in the Illinois area, but we have clients literally everywhere, all over the US. We have clients in China. We have clients in Bulgaria. We have clients in Mexico all over.

BRADLEY: Very cool. And is it word of mouth mainly?

LIZ: Mostly word of mouth. I mean, almost exclusively word of mouth.

Mastering M&A: The People, Planning and Process?

BRADLEY: Very cool. OK, awesome. Well, I'm super interested in learning more about that but let's get into our specific topic. So M&A, it's happening a ton in health care. You know, maybe just some conversation about the megatrends that are making that happen and then getting into this methodology and then some examples would be cool to talk about.

LIZ: Yeah, we think about mergers and acquisitions. There's a lot of reasons that those happen. There's a lot of reasons you have transition, whether it be consolidation, whether it be finding synergies with them that could be growth. To your point, you have two organizations that you just described that have a lot of value here, a lot of value here. You put them together. You unleash synergy with that. And now you're better together, right?

BRADLEY: That would be really obvious. Were you and did you have our boardroom tapped? Because we talked about better together. We're not the only ones. In fact, back to the when hc1 bought Accumen, we had these care packages that got sent out to all the team. And the theme was peanut butter and chocolate. They had like Reese's cups and then also peanut butter and jelly was in there. So, the better together is the theme. Everything's better together when you hope and it's the right stuff.

LIZ: Yeah, absolutely. Now, peanut butter and pickles, maybe it might not work.?

BRADLEY: And sometimes that happens, you know, with peanut butter and pickles. And it's like, who the heck wants to eat that?

LIZ: Exactly.?

BRADLEY: It's disgusting. So. All right. Yeah. So is this part of the methodology we think about, like which flavors are good together? OK, all right. I like that. You can kind of like personify the businesses or something like are these animals fit together or these exactly. OK, all right. Perfect. We're on this.

LIZ: Oh, yeah, absolutely. So there's other reasons for these transitions as well. So it could be, again, two organizations coming together. Could be that you have a location that's in a political area. Geographic area that's not as stable as it once was. So you have that geopolitical instability and so now you're looking to move things out or or create redundancy because it's not as strong as it once was before.?

BRADLEY: And that's bigger than ever with all the geopolitical instability and the, you know, the economic policies that affect where you can do business, how you can do business.

So with respect to your specific practice and the methodology you follow, I'm a company, I'm a med device company, and I want to go acquire another med device company because they've got a new product that can extend my sales reach and my label. How do you coach my team on how to do this right?

LIZ: That's right. OK, so you have two organizations. One, perhaps you're bringing in a small subset or perhaps you're acquiring the entire company. They're really similar in size and nature, whatever that might be. So understanding the scope and the scale is one of the first things that you want to do because you're creating a plan.

Now, let's talk about that sort of in three parts. So the first part, I would say, is:

Consider the people, right? So when you think about the value of the current organization and the value of the coming in organization from the two, you want to really understand what is a value. Oftentimes that's in the people. It's in the people that develop these beautiful products or services or whatever that might be.?

BRADLEY: It's like the intellectual capital that you're buying.

LIZ: The human factors in that are incredibly important. So understanding, assessing that so you don't, when you put those two together, you erode that value. You start with the people side of things, understand people are going to have different reactions to this. Some people are going to be super excited about the opportunity, the new products, maybe a new job, maybe something expands for them. They're ecstatic about it.

Equally, you're going to have another group of people that is scared about change on the whole. They're anxious. They're nervous. You could have people that are going to lose their jobs in the process. When you consolidate, you're not always going to have both roles that need to be there. Maybe a location is no longer going to be there in Nebraska. It's now going to move to Florida, let's say, right? And so you need to consider the fact that those emotions are raw. They're nervous. They're angry.?

So addressing that first and foremost, the people side of things, addressing that first and foremost, helping people understand the why behind it, helping them rally behind a larger cause beyond themselves, is a really important first part to start.?

BRADLEY: Right. So how is it that our mission is deeper by bringing these companies together so there's a purpose for what I'm doing??

LIZ: That's right.?

BRADLEY: Then it sounds like it's impossible to do this overnight, but doing as much pre-planning as you can.?

LIZ: Yes.?

BRADLEY: So when you announce this is happening, you can quickly come in and make the personnel decisions. And I feel like that's got to be the hardest part. It is so hard. It's the people part. It's so hard because they are people.?

LIZ: They have emotions and you're connected to these people. It's not necessarily that they're not great, it's just we don't need two.

BRADLEY: How soon before you can go in and just deploy humanoid robots that are AI powered? And then, you know, there's some joke, sorry, okay, you see, okay so not happening yet.?

LIZ: But yes, someday.?

BRADLEY: Yeah. I mean, I think someday probably we'll have humanoid robots not sooner rather than later cleaning up sticks in our yard, that kind of thing. So we can focus more on healthcare.

LIZ: What humans can uniquely bring.?

BRADLEY: Right.?

LIZ: There are things that we can simplify through AI. There are things that are, we'll call it mindless, if you will, that can be handed off to thought processes that don't need to be there. But there are things that only humans can do. There's creativity that comes from that, that only humans can do.?

BRADLEY: Right, so how do we bring more of that? Yeah. Allow time for that. Sorry to get off track. Yes. But that's true. I mean, it's interesting. It's on top of mind of everybody. So the second bucket, then once you get the people figured out, what's that one??

LIZ: Planning. So the political side of things nailed down. The second part of this is the planning. Oftentimes when you're bringing two organizations together or you can anticipate that there's a geopolitical instability that's coming, it might not be today, but it might be six months from now. It might be a year from now. You can anticipate perhaps prior to the election what might have happened, right, where it might go.?

A year ago, we didn't know for sure how that was going to play out but we had some hunches on how things might play out. Accordingly, how do you want to anticipate those? Because these kinds of transitions, mergers and acquisitions, location changes don't happen overnight. So you can't go, oh, wow, we have a problem over here. We need to change that. It's going to be a year before that actually plays itself out. So thoughtful planning on this is really important.?

BRADLEY: Even just the fundamentals of how do you market and sell? Is that something that you'll bring together at one common function??

LIZ: That's right.?

BRADLEY: I was on a call about that this morning, actually and it's critical. Like if you end up getting the value or you don't get the value from what you did.?

LIZ: Correct.?

BRADLEY: So we've got people planning. What's the third one??

SMSO Methodology?

LIZ: The last piece is the process. This is where we have a little bit of a unique method to how we go about this. The process is something we called SMSO and I co-developed this with a client of mine about 10 years ago. SMSO stands for stabilize, mobilize, stabilize, optimize. SMSO.?

BRADLEY: So it stabilizes twice??

LIZ: Twice.?

BRADLEY: Because when you mobilize, you get unstable??

LIZ: That's right. That's right. So when you think about the first stabilization, you want to make sure that when you make the move or when you do the transition, that both organizations, the from and the to, are both in a place to be able to handle a transition.?

Let's say it's a manufacturing transition. If you're going to pick up a location and move it to a different one, the equipment, the processes, the procedures, all of them have to be strong before you move them, because otherwise you're going to move them and they crumble, right? Or if you have two different organizations that are coming together and you're looking at how, hey, we've got some good value here, but it's not well documented, or we don't have a good process for this. We want to make that strong before you start to blend it in with where it's going to go to and you stabilize that first.

Mobilize is kind of simple, it's like it's the actual move or it's the actual transition that are happening with the thought of where you're headed next. You put it down in place, you stabilize it again, and then you don't work on optimization until the very last step. And this is the thing that I think is hard for everyone, myself included, because you're like, well, while I'm in here, while I'm making these changes, I might as well update this. I might as well work on the cost improvement, or I might as well make this more efficient, whatever that might be.?

The problem with that, though, is that you're adding scope, you often are adding time, you're adding cost, and so that value that you thought you were going to receive on, say, December of 2025, just got extended, right? And you've also added more risk to it or variables to it. And so if you stick that optimization in too soon, you really run the risk of having a lot of problems with it. So we make sure we are very aggressive about keeping that to the end.

BRADLEY: Well, I think the other thing is, its repetition is required for any team to learn. It's consistent with a sports team. You have to go through the plays over and over and over. At the end of every single football practice, I remember we would do special teams and everybody had to run on the field and do the same thing every single day. But when the heat was on and you were at the game, it was like muscle memory. You just instantly knew what to do.

LIZ: That’s right

BRADLEY: Did I mention my Hoosiers are undefeated? Okay, I just had to get that in.?

LIZ: You did!?

BRADLEY: Yeah, go Hoosiers. All right. Anyway, how's Illinois doing? I'm totally joking. I mean, you know, but they're not doing as well. No, usually we're not any good. So you know, it's but anyway, hold on to them. Yeah. So it's interesting. Just this morning, I was on a, yeah, we got to take it all in while we can, right? But this morning, I was on a meeting, because I'm an operator, you know, an investor in health tech and healthcare.?

So the things that you're talking about resonate with me a lot. There's this need to make sure you put into your product development function, the requirements to create the thing or the things that will be really compelling to your clients and in order to do that requires a lot of coordination, orchestration. It starts with a person or a team of people generating what we call a solution memo that lays out like, why is this going to matter what and, you know, if you think about it in one of the Amazon norms, creating “the what” that Bezos made very famous, creating the press release before you ever built the process, is anybody actually gonna care, you know, even just that type of process, to get that driven through the entire organization with two groups coming together, it takes some effort, you know, it takes some investment, and it takes some coaching.

I can see also where you would come into an enterprise that the high level executives generally know, hey, we need to do these things. But at the end of the day, they need help with an outside team to get everybody on the same page.?

LIZ: That right

BRADLEY: You know, because I, for me, like I can see what needs to be done. But I have a lot of things that I have to do on a given day. So and frankly, I'm not the best person to go train everybody on all the details.

Is that part of what you're doing is you're drilling all the way down and making sure everybody kind of knows how to march in the right way and achieve the same outcome.?

LIZ: We always talk about start with the end in mind. So to your point around that press release, right, the press release, this is what we wanted to look like at the end, rally all the people and the planning and the process around that vision. If we're clear on that vision, then every step along the way should be pointing in that way.?

Yes, each functional area, each work stream, each process, each part of this should line up with where we're headed in that direction. But you're right. You could have a great vision, but the devil's in the details, right? You could say, yes, when we put these two together, look at macro level. These are the financial synergies, the customer synergies, the product synergies that we should realize. If you don't execute on that well, you lose that value and in the process, you have brand damage that happens. So now your customers don't trust you.?

BRADLEY: Well, right.?

LIZ: They're frustrated that I used to have this thing before and used to have these service levels and this kind of customer service. I don't have that anymore. I don't trust you anymore. That's a huge problem.?

BRADLEY: Right.?

LIZ: You run the risk of losing employees because they're frustrated. They wanted to have this grand vision, but the plan wasn't executed well and so they feel frustrated.

M&A Triumphs: Real Stories of Success

BRADLEY: Right. Interesting. So this is a podcast about the business of health care and aligning what you're doing to innovate or create value with an economic model that ends up improving outcomes and boosting the bottom line for healthcare overall in many dimensions. You've had experience firsthand with some of these. What's a success story that you can share?

LIZ: Yes, yes. Several success stories. One I'll pick on because it was the first one and it was one of the first ones. And we were, we had two organizations, one that was based in Florida, one that was based in Louisville and they had various other locations. It was a complicated move in the sense we had some of it that was moving to Louisville, we had some of it that was moving to-

BRADLEY: Can you share what kind of company?

LIZ: Yeah, so this is a med device company.?

BRADLEY: Med device.

LIZ: Yeah, med device company. They do instruments. So it's heavily regulated, being used or in surgical settings.?

BRADLEY: Yes, yes. And along those lines, I'm glad you talked about the regulated piece of things. When you do a move like this, there's a lot of quality and regulatory considerations that need to be made. You can't just pick up and move and go, done, we're there, right? There's a lot of things from a documentation perspective, from a filing perspective with the FBA that you need-

Well, increasingly, you have to actually have real world evidence, which there's a really cool company called 3Aware that I co-founded that you should take a look at. It does real world evidence for data insights in medical devices specifically. But anyway, there's a whole bunch of, yes, it's 3Aware , but a whole bunch of considerations. You're bringing these companies together in all these different places. What's the, how did it, why did it play out well? Why did this one go well?

LIZ: Yes. Probably-

BRADLEY: Because you were involved.

LIZ: Because I was involved.

BRADLEY: Because you taught him, you taught him, yeah. You taught him all martial arts.

LIZ: Exactly.?

BRADLEY: And then they were disciplined.?

LIZ: They were disciplined. I also said, if you don't do this, I'm a martial artist.

BRADLEY: Right, right, right. And then you broke some bricks.

LIZ: Exactly. Right in front of the whole place. That's what I did, yes. No, we really followed the methodology. That's what we did. We started with the people. There were some people that were going to be losing their jobs in the process. They were sad. And I think a lot of times, consultants-

BRADLEY: Well, and some of their friends were still going to be there.

?LIZ: They were still going to be there.?

BRADLEY: So you have to make sure you treat people with dignity and professionally.?

LIZ: That's the thing. I think I was a part of, on the outside, watching someone else do a transition management and they were solid, technically. Solid with the plan. They knew manufacturing inside and out. That individual was more solid than me by a long shot. However-

BRADLEY: At martial arts?

LIZ: No.

BRADLEY: All right, because I was thinking Black Belt was probably better than what they had. Okay, I'm sorry.?

LIZ: In terms of this manufacturing-

BRADLEY: They were more expert in their domain.?

LIZ: Absolutely. However, they blew right past-

BRADLEY: Sorry, okay.

LIZ: They blew right past the people component of things. And so in the process, what happened was the team that was losing their jobs and seeing the team that was gaining this whole new facility, state-of-the-art, everything, and all the focus was on them, they were really frustrated. They were sad. They were angry and so what they did was they dug their heels and they didn't-

BRADLEY: Probably created some toxicity.

LIZ: Absolutely. So that's the compare-contrast, right? So if you take the time, it might take a little more time.?

The Power of Communication in M&A

BRADLEY: Fundamentally, it's ensuring that the communication and the involvement and buy-in of the people, both those people who are going to be along for the next leg of the journey and those who have to leave you at that point. That everybody sees why it is and ultimately, the business is bigger than any one individual. Unfortunately, to make that a healthy, successful, thriving situation, these hard decisions have to be made.

LIZ: That's correct. That's correct. So where we invested the time at the front end to really get everybody on board with that was time well spent.? I think a lot of times that where it doesn't go well, I'll give you an example in a moment of where it didn't go well, that's where it started, was with lack of people focus.

BRADLEY: Right.?

LIZ: The next part, so I said, there's a three-part plan to that, right? There's people, there's the plan, the fact that we knew that this was coming six months before it was coming, we started planning six months earlier, right? And then the third part, we used SMSO. We taught everyone SMSO. We used SMSO for the two and a half year long project that it was, and we rigorously followed that.

BRADLEY: Okay, very cool. The success quotient really is what I'm hearing all about the people and the scenarios where it falls apart. It's because people go toxic or they're confused or they're not clear. How do you get people to be comfortable though?

There is no perfect way. Even if we teach everybody martial arts, we still will have some challenges along the way and that takes a long time to get to the black belt. So when we need to get up and going in a few months, there will be issues. How do you set up an environment where people are comfortable giving feedback and getting involved so they don't just sit back and complain?

LIZ: Yes.?

BRADLEY: Because I've seen that happen pretty extensively in various situations. And then mechanically, is there some kind of a good way to do that? And also give kind of a quick, I do not buy into anonymous feedback. I think it's toxic. I think it causes all kinds of political morass. If you want to be part of a company, you should be there to help advance whatever it's trying to get done. And if you have an issue with something, come forward and help come up with a solution.

LIZ: Absolutely.?

BRADLEY: In any event, and I mean more in like business operations, like things that are just, let's build a great business together.?

LIZ: Sure. I think it always starts with aligning on what the big picture is. So to the point where you have people that are feeling angry, toxic, whatever about it, it has to do with the fact that they're losing, they have feelings and emotions about what's happening to them. They're not trusting of what's coming up next, right?

So how do we get past that particular group, for example? They were super excited about what they were doing because they were loving their end user, customer, their patients, whoever that might be. Blood, sweat and tears, generations within families that were putting in a lot of time and energy and effort to that.

We kept bringing it back to remember, we're doing this for the patient. We're doing this because we have a legacy of-?

BRADLEY: Connecting with that story of that individual as you care about, it's your family, it's your friend.?

LIZ: This could be you that's under the knife, right? When you bring it back to that, I think you're looking at something bigger than themselves and so when we were going through the project then, where we had frustrations, we keep bringing it back to a macro goal that all of us, every single person on the team had. That's the first step I think that is very centering. We're saying this for transition, but you can really use that in any part of life, either business, personal goals that you have in life. But if you can center it back on, whoops, what's the most important thing that is important to you??

BRADLEY: Is the mic interfering with you? Don't get too angry. We know you know martial arts. No, I'm with you. So fundamentally it's the people and the way that you bring them together, bring them along.?

You were talking earlier about getting everybody rallied, getting their attention. This is a complete tangent, but it reminded me of, did you ever hear the story about the, actually I think it was the thing about you being in front of everybody and breaking the brick. Made me think of this. The most famous product introduction that I'm aware of in terms of how simple it was, but how powerful it was, was Plexiglas. Have you ever heard this story?

LIZ: No, I don't think so.

BRADLEY: I'm fairly certain this is a true story. When Plexiglas came out, it was this really innovative thing. The only glass that existed or plastics that existed would not have the qualities of both glass and be so durable. Supposedly the product manager for this got up on stage and had a piece of Plexiglas in this frame and had a sledgehammer and didn't say a word and just walked up and just went, wham! Everybody was just like waiting for it to break and it didn't. Then he just walked off the stage and that was it. Everybody was just like, wow, it was amazing.?

I think people who are really good at leading at times of major change, they can get the attention. I think in this case, the sledgehammer with the Plexiglas is that purpose that we have, the why we're doing it. It sounds like that's why you've gotten into keynote speaking is that you're in these situations where you have to help get people focused, get them to rise above what they might do otherwise, which is really why you have coaches in general. You can be the most talented person in the world without a coach, you're not gonna achieve your goals.?

In fact, I was just watching the Arnold Schwarzenegger documentary. It's on Netflix now, and if you haven't watched it, I would. It's really interesting. I mean, talk about an incredibly successful story of somebody who came from the strangest beginnings to make that happen, and he had this view of like just be useful, and he overcame so much. But, you know, ultimately in his story, he's talking about the fact that you're going to have this huge adversity, but you always have to focus on what like envision what you're going to be like. He could see his face on Mr. Universe like he I'm going to do that.?

LIZ: Yes.?

BRADLEY: He had this coach named Joe Weider along the way, who basically took him under his wing and said, we're going to make you, you know, make that happen. It seems this kind of combination of belief and vision and having the coach.

LIZ: Yes.?

The Blueprint for M&A Success

BRADLEY: Talk to me some about how you're doing that. How are you inspiring this kind of action??

LIZ: Bigger picture visualization is such a powerful tool. I think, again, starting with that end in mind, casting that vision, we actually brought about stories of patients using the products, having an experience where this is what their life was like before. This is what it was like afterwards.

I'll tell you for my own self, I just went through a public speaking competition, world championship of public speaking. When I first started, I visualized myself on the final stage and everything I did, everything I worked towards, every moment that I spent practicing, getting feedback, reworking, had my visualization of me standing on that final stage. It's powerful. I love super powerful.?

BRADLEY: That's great, especially if you can get yourself to believe it.?

LIZ: Yes.?

BRADLEY: You know, yes, that's so cool. Yeah. Well, it feels like you're on to something really big and are a great fit with what we're doing here, because it's really this Boombostic Health concept is about creating this community of people who are bold leaders in healthcare, who want to learn from each other. And I'm sure you have conversations all the time with interesting, bold leaders who are doing big things. Would love to have you back on the podcast. Would love to have anybody you work with who you think would be a great fit, because this is the kind of thing that we want to bring to the world.

What I observe is that every week I'm getting a chance to hear these things from people, and there aren't enough other people hearing them. And I think in healthcare specifically, there's a lot of really technical and scientific work that's being done that's incredibly profound, but there isn't enough of that storytelling that connects it all the way to the patient.

LIZ: Sure.?

BRADLEY: We've been trying to do more of that in our companies, and it's making a big difference, because internally you see, gosh, our technology isn't just something we're selling to a business user in a hospital. It's something that's ensuring that a baby, when it's born, is as healthy as possible. You know, it's something that is ensuring that a patient is diagnosed as early as possible. It's something that's predicting who could develop an issue like cognitive decline and getting them screened and treated sooner. That's a big takeaway that I'm hearing from your story and your approach as well.

LIZ: Context is everything, right? We're sitting in the four walls of a lab or an office or a building, whatever that might be, and we don't have that bigger picture, that connection. We lose that. For me personally, I was in health care, and loved it for a lot of different reasons. My daughter was born two months premature, and I found myself at Children's here in the city.?

BRADLEY: Right. That's scary.?

LIZ: It was very scary. Day to day, we didn't know if she was going to make it. I saw these Cardinal trucks coming in and out of that hospital, and it was a realization for me of, my God, what I'm doing is important. I knew it, but now this is my own daughter, right? So if I wasn't already on fire, it just blew up at that point in healthcare, education were my two passion areas. Life is all about both those things.

BRADLEY: Right. Well, healthcare affects everybody. Yeah. So, well, thank you so much for being here. This has been an incredibly interesting and insightful conversation. I definitely think that what you're doing is making a big impact and you're clearly fit the bold leader mold. I am super excited to see your next keynote speech. We need more people like you out there leading the charge in health care.?

LIZ: I appreciate that. Thank you so much.?

BRADLEY: Thanks for being here. We'll transition to bring Emily on to talk about the legal and regulatory implications of M&A in health care.

The Verdict: Legal and Regulatory Insights

Preparation for M&A Success

BRADLEY: Now it's time for another verdict with Emily Johnson coming out of the conversation with Liz Hutson, where we covered the healthcare consolidation trend and the keys to a successful M&A deal. As a healthcare regulatory attorney, I know you get involved a lot with these combinations. I thought it would be great if you could get into some of the details on the anatomy of a deal and how do you prepare overall to ensure that you have the best chance of success when you put two companies together?

EMILY: Yeah, great question. I wish more of my clients had asked me that in advance instead of just going to market. It really is a multi-month advance preparation to have the most successful transition when you're talking about a transaction. It's not just going to market. It's getting your ducks in a row in advance, which includes your financials. A large part of that in the healthcare industry is your compliance. So do a billing and coding audit, figure out where your weaknesses and vulnerabilities are.?

The last thing you want is for these issues to come off during the diligence phase because they will drive down the purchase price and they will drive up your legal costs and they will delay your closing. You know, people like to give lawyers the bad rap as the deal prevention squad. But if you're not the deal prevention squad, sometimes issues need to be addressed when people don't do their homework leading up to a transaction. On the buy side, it's similar, right? You still need to understand and do your homework on the entity that you're buying because the last thing that you want is surprises. Again, they might come up in the diligence process or if they don't, if they haven't yet, they will come up in the diligence process.

When you have a deal that has reps and warranties insurance and now you're talking specific indemnities and impacting what that process looks like, it can all be extremely frustrating. So we frequently counsel our clients on buy side and sell side to have a strategy. Buy side is a little bit different. You can have a playbook that you put together that lists the things that you want to look at, the homework. You're going to look at the items you're going to ask for from the selling entity so that you can properly vet their business like you would do with anything.

Sell side is more of a process. Sell side is like selling your house, right? You don't just invite people in to see your house. You make repairs. You fix things. You make it look the best that it can look. You stage the furniture. We stage the furniture, sure. To drag up the purchase price and the interest in the business or in the house, but in this case, in the business.

So doing these things in advance, once in advance, working with qualified investment bankers who can put together the right combinations, the right strategies is really, really important and can be really helpful. You don't need an investment banker on every deal. I'm sure my investment banking friends are probably kicking me for saying that. But you do need them on top. It's important to have the right people in your place.

BRADLEY: For the record, I'd never call you the deal prevention squad. There are certainly attorneys who are more about solutions than they are about creating hurdles. But I think it's I think the great ones find the path through all that chaos.

EMILY: Correct.?

Understanding Reps and Warranties Insurance

BRADLEY: You touched on something that I think would be worthwhile talking in more detail about, which is reps and warranties insurance. So in any deal, any sophisticated deal, though, there will be reps and warranties, representations and warranties that are provided by the seller that says you can count on this. It's like a guarantee. We're going to do these certain things or these things are true. The buyer wants protection in the event that some of those things aren't true and so there's this entire space of insurance that is able to support that need. Talk a little bit about that, because I think a lot of people aren't really familiar with this.?

EMILY: There is reps and warranties insurance that will cover certain indemnifiable events or situations that arise in the course of a deal. When you do that, those are usually like larger back deals. When you do that, it drives up the cost of the deal for the buyer because there is risk associated with whatever you're getting the insurance for. So it slows down the process. It can add tremendous value. It can add tremendous benefit because it's sort of taking the risk off the entity and bringing in like an all day for the seller.?

BRADLEY:? For the seller, it's much better because it limits their exposure to having to come out of pocket or have a clawback on whatever they were paid on the deal. I just think that's such an interesting aspect of the entire business insurance world.?

EMILY: It is. It is. It can be frustrating, but it can also be really, really great. It's just another piece of the puzzle of a transaction. Right, and it's got room to help.

Corporate Practice of Medicine

BRADLEY: Corporate practice of medicine issues in certain deals. Maybe just touch on that.

EMILY: Yes. So corporate practice of medicine basically regulates who can own a professional entity that's driven by state law. Certain states have restrictions on non-licensed individuals from owning a professional entity. That's why you often see in health care transactions what we refer to as an MSO arrangement or management services organization where you have one non-clinical entity that sits towards the top and owns the clinical entities underneath, but the clinical entities themselves remain individually owned by the physicians.?

All clinical decision-making is still left to the physicians. What happens is the profits then speed up to the management company, and that's how you overcome corporate practice of medicine considerations. Again, you see that a lot in private equity deals or larger combinations of physician groups where you have these multi-specialty practices, but also like large national practices.

BRADLEY: Yeah, so the bottom line is Liz talked about her consulting. They have people planning and process. They do this SMSO, stabilize, mobilize, stabilize, optimize and then there's this whole other layer, though, of detail of pre-deal work that allows you to put together companies in a manner that as they move forward together, each side is protected. The main point I heard was to get started early with that and be proactive with it. Don't wait for some surprise to come up if you're looking to sell a business.

EMILY: Correct.?

BRADLEY: Okay, great. Well, as always, super insightful. Thanks so much, Emily. Appreciate it. Thanks for joining us for another Boombostic Health podcast. We'll look forward to seeing you next time.

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