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October 9, 2023

The healthcare industry is a complex and rigid space where change is often rejected. Any evolution in this sector not only signifies business decisions but also influences the overall quality and accessibility of patient care. In this article, Roy Schoenberg, President & Co-CEO at Amwell, delves into the intricacies of navigating M&A in the healthcare industry.

"In the tech world, while financial incentives matter, employees seek purpose. Without alignment on purpose and feeling they make a significant impact, they may leave, regardless of the pay." - Roy Schoenberg

The healthcare industry is extremely unique. It’s the only industry where the consumers/patients don’t know what they're consuming. The providers/clinicians don't know the costs of the services they provide. The payers/insurance companies are disconnected from the care decision-making process. 

Due to this nature, the healthcare industry requires third-party companies to broker the interactions of all three players in the market, which is highly regulated. 

M&A in Healthcare

According to Roy, M&A in the healthcare industry is never about inorganic financial growth. Their primary driver is to acquire competencies or capabilities to advance the current business of the company. 

For Amwell, their first large acquisition was Avizia. Avizia was already inside the provider environment, allowing clinicians to use technology to deliver care to patients. Acquiring them comes with a lot of capabilities, including custom software for 40+ clinical specialties. This will broaden telehealth options for Amwell’s clients, offering a unified platform.

Because of this approach, Amwell is looking for something very specific and has not participated in any auction processes. All of their deals are proprietary.

The 3 Cycles of Due Diligence

Due diligence is rigorous and time-consuming. According to Roy, it must be systematically divided among functional teams to form opinions at different levels, which will be helpful in further decision-making. Roy emphasizes that Amwell uses a three-pronged approach when it comes to diligence:

  1. Direct Diligence

This involves engaging directly with the target company's leadership to grasp their values, culture, and operations. It sets the groundwork for further analysis.

  1. Analyzing Findings

After collecting data, the team reviews and discusses it to verify the target's claims, ensuring alignment and identifying risks.

  1. Evaluate Gut Feelings

Beyond data, trust your team's instincts and gut reactions. Set a time to gather their opinions and feedback. If something doesn't feel right, explore it further to ensure a successful acquisition.

Roy believes it's imperative to maintain communication and remain closely involved during diligence. This helps to stay grounded in the business strategy, leading to key employee retention. 


When it comes to integration, it’s all about respecting the acquired company’s operation. Recognize their unique capability and ensure they continue to carry their magic even after the integration. This will also help in retaining all key employees.

However, the best way to retain all employees is to achieve alignment on purpose. In the healthcare industry, compensation alone is not enough. People in this industry are looking to make an impact globally and want to be proud of their work. They have to feel like they found a new home after the acquisition.

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