According to the Lehigh Valley Economic Development Corporation, the Lehigh Valley’s top industry by employment is health care and social assistance. More than 30,000 people work for the region’s two largest employers, Lehigh Valley Health Network and St. Luke’s University Health Network.
By 2022, forecasted employment for the health care sector in the Lehigh Valley is expected to total 57,395.
It is no exaggeration to say health care is big business in the Lehigh Valley. In fact, health care is big business across the nation. Again, according to the Lehigh Valley Economic Development Corporation, health care and social assistance rose from 13 percent of the national GDP in 1995 to 17 percent in 2014.
What should vendors to the Lehigh Valley health care sector be looking at?
Companies servicing the health care sector in the Lehigh Valley are challenged to anticipate evolving needs of this growing sector. Just as a growing child will need a new suit of clothes, a growing client will require new solutions to shifting problem sets.
For health care providers, including hospitals and multi-office physician practices, there will be more patients, more employees, more supplies, more security guards, more insurance, more of just about everything. To help manage these ever increasing needs, health care providers are increasingly seeking vendors who can provide end-to-end service offerings
As a function of seeking vendors who can provide these end-to-end service offerings, health care providers are looking for ways of consolidating and using fewer vendors. If a food service vendor, for example, can also offer menu-planning services that would be a win from the hospital’s perspective. The hospital won’t need as many vendors. By consolidating to fewer vendors who can offer end-to-end solutions, a hospital requires fewer vendor management resources when all scarce resources are already being strained.
In our Mergers & Acquisitions practice at Corporate Advisory Solutions, we work with outsourced business services companies operating in both the debt collection and revenue cycle management sectors. When advising these companies regarding ways to provide end-to-end service offerings to hospitals and multi-office physician practices, we recommend they focus on “patient engagement.”
Forward thinking debt collection agencies have been transitioning from their traditional focus on billing and collection services, and evolving into full service vendors that can also provide front-end revenue cycle service offerings. These service offerings will include various “patient engagement” points including billing eligibility, over and under payment and patient financing
Revenue cycle management vendors who wish to either grow their businesses, or defend their client relationships from end-to-end service competitors, have been adding debt collection capabilities to their service offerings
If your Lehigh Valley company is playing in the healthcare sector, this is an excellent time to consider expanding your service footprint by reviewing different acquisition strategies. These strategies can include both upstream and downstream service offerings. You will not only be growing your revenue base, but you will also be defending your company from competitors. Remember your healthcare clients wish to shrink their vendor community with end-to-end service solution. Don’t let a competitor arrive at the party before you do.
If you are thinking of selling your business, this could be a good time valuation wise to think about transitioning or selling out completely. Since you get to sell your company only one time, consider enlisting the support of a Mergers & Acquisitions specialist. This person will be able to properly value your business, and then find a home in which your business will be a valuable component.
Michael Lamm is Managing Partner at Corporate Advisory Solutions (www.corpadvisorysolutions.com), a boutique merchant bank headquartered in Philadelphia and serving Lehigh Valley businesses. Michael can be reached at email@example.com or 202-904-7192.