Mergers & Acquisitions and Procurement Support from Direct Supply® DSSI™

Why are Mergers & Acquisitions becoming so common?

According to the McKnight 2024 Outlook, nearly 40% of Skilled Nursing owners and executives believe they will sell some or all of their senior living portfolio in 2024. There are a number of reasons leading to these healthcare mergers and acquisitions within Skilled Nursing:

1. High inflation
2. Unstable Medicare and Medicaid reimbursements
3. Increased labor costs
4. Stagnant incoming revenue
5. High interest rate pressure

As inflation costs increase worldwide, many providers have struggled to gain a foothold financially. Even before inflation rose, it was difficult for smaller providers to manage procurement, labor costs and new regulations. Now they must do so while grappling with higher prices. This has led to smaller organizations merging with larger ones to absorb their financial burden. 

With our expertise, healthcare facilities can consolidate their supply chains, ensuring consistent product quality and availability across all locations. Direct Supply DSSI offers valuable support in managing increased demand, optimizing inventory, and reducing costs. Our data-driven insights and analytics provide a clear view of procurement activities, helping to identify opportunities for savings and efficiency improvements. By working with us, healthcare providers can focus on integrating their operations and delivering excellent resident care, knowing their procurement needs are in expert hands.

M&A trends continue to emerge as the senior living industry recovers from the COVID-19 pandemic. DSSI is here to help your organization establish efficient procedures in your procurement activity.

Mergers and Acquisitions: What problems can DSSI help with?

One large struggle is figuring out how to handle procurement. This struggle is especially evident when your team hasn’t had a designated procurement professional in the past. For most mid-sized organizations, managing vendors and establishing a procurement strategy are tasks that fall by the wayside. 

When merging or acquiring new companies or assets, there may be inconsistencies in supply chain management. This can lead to potential disruptions in product availability and quality. Coordinating inventory across multiple locations becomes more difficult, and managing increased demand can strain existing resources. Additionally, aligning the procurement strategies of merging entities can be challenging, as each organization may have different practices and vendor relationships. 

As your organization gets larger, these questions within procurement become necessary to answer to establish financial success. Saving time, cost reduction, and risk management become areas of interest. Getting your arms around what strategic procurement looks like in healthcare and senior living is priority one. And luckily, DSSI has a wealth of experience helping folks navigate that transition.

Our decades of experience in supply chain management helps our customers in the healthcare industry save money. We can help manage suppliers, improve contract management and develop a cost effective strategy that works for your business. 

When should DSSI get involved in the M&A process?

Early communication is key. One benefit of working with DSSI is the industry expertise established over the last 30+ years. Our procurement data from so many successful partnerships helps us to make informed decisions. The DSSI team is here to support your growth and success, and we can add significant value throughout the M&A process and beyond. 

The DSSI procurement strategy is built on supporting your relationships with your suppliers. We will support your communication with your supply chain throughout the process. We will implement a procurement system to give you the control that you’re looking for. Products and services your organization requires will be purchased from visible, trusted suppliers

The DSSI spend management consulting team will also support your expanding internal procurement team. The system establishes standardized purchasing processes and provides an opportunity for your organization to instill confidence. It can also aid in quickly acclimating the team members you have also acquired through the acquisition or merger. Your procurement department will be our close partner, working with us on supplier negotiating, inventory management, and ensuring compliance with your plans for your procurement operation.

How can healthcare providers leverage DSSI when acquiring new buildings?

Buildings are being shuffled like cards in a hand of poker and they’re changing owners rapidly. There’s an opportunity to leverage DSSI technology and industry expertise to establish a healthcare procurement strategy.

Establishing a data-driven strategy will reduce the time you need for procurement management, even in the short term. Whether that’s relationships with vendors or analyzing your spend to find opportunity for savings, or just less time managing the requests and approvals that are necessary for large purchases, all of those burdens can be lessened with a system like DSSI.

What are the benefits of partnering with DSSI?

There is a large list of benefits to the DSSI procurement solution in general. With respect to customers undergoing mergers and acquisitions in particular, one really stands out. Real-time visibility into the spend-down that’s happening in your buildings can be crucial to identifying opportunities for cost reduction. 

As a new owner, one challenge is the lack of long-standing personal relationships with your new employees. You’re trusting that they’re acting in your best interests, but you may be operating on blind faith. Working with DSSI ensures that a second eye is watching your new employees and helping them learn how you do business.

With DSSI, you can reduce risk, remove time consuming tasks and a wide range of other helpful benefits. You can see everything from the orders that are being placed, including your approvals on those orders. You can see how well your new buildings are complying to your existing contracts. If employees are ordering off contracts with vendors you have not approved, you’ll know.

Direct Supply DSSI allows you to be an active manager because it gives you visibility into data you would need. It’s better than being reactive based on the financial reporting that you would otherwise produce routinely. Protect your bottom line with DSSI.