Back in 2008, when HealthCare Partners was developing its long-term plan for where the company wanted to be with information services in 2015, the C-suite called in outside consultants to help them get the job done. Rather than rely solely on its in-house expertise, the California healthcare system wanted knowledgeable experts who could validate what was going on in the industry, what was happening from a trends standpoint, and where the market was heading.
“It was about having experienced people that you can rely on” and, in HealthCare Partners’ case, a smaller firm where it could reach out to the principles if any problems cropped up, says Zan Calhoun, the system’s CIO at the time. HealthCare Partners turned to Woodland Hills, CA-based Top Tier Consulting to help it tackle the strategic planning task.
Now chief technology officer at Agilon Health, Calhoun says he still prefers smaller, “closer-to-home” organizations because they offer a better chance for personal relationships and better ability to control and manage what’s going on with projects.
In today’s world of fast-evolving health technology systems, gut-wrenching shifts in care and payment models as well as market consolidation, hospitals and health systems often turn to third parties to assist with assessment and decisionmaking. Knowing when to call in the experts and what to expect can help ensure the experience is a positive one.
When to ask for help?
There are several good reasons to hire consultants. One is a lack of internal resources. That could be due to management vacancies, or the proposed project could be temporary in nature and hospital officials don’t want to divert existing staff or hire more full-time employees to get it done.
Still another reason is to get a gut check on decisions that are of vital importance to the organization, like planning an acquisition or a major capital expansion.
In other cases, hospitals may have expertise, but bringing in a third party — say, to assess a vendor selection process — can lend independence and objectivity to the solution, resulting in more confidence in the final decision, says Brad Armstrong, senior partner at T2C.
Hospitals turn to consultants during mergers and acquisitions, not only to advise the logistics of deal itself but also on operational changes — figuring out how to bring two entities together in a way is more efficient and functional. Consultants can also bring needed expertise to issues like staff productivity and operational efficiencies.
In the IT area, health systems are looking to consultants to help them optimize use of their EHRs and the workflow around them. What a lot of organizations are dealing with now is how to make the EHR more effective and build more applications and integrations — data analytics, population health, devices — on top of that, Armstrong says.
The big thing now is population health, says Adam Higman, vice president of Soyring Consulting in St. Petersburg, FL. “You’ll have firms that specialize in finance, others that specialize in strategy, firm like us that specialize in operations, all helping systems try to wrap their arms around how to solve the problem and how that fits into [accountable care organizations]. Should they pursue an ACO model? Should they have an insurance product? And what does their outpatient service model look like?” he tells Healthcare Dive.
A typical, large health system will work with several consulting firms at the same time — someone to help with strategy, someone for finance and someone to assist with operational issues, from accreditation preparedness to departmental issues and quality outcomes.
Shopping for experts
Once the decision has been made to hire a third party, what should hospitals look for?
“Have a clear idea of who you are going to be working with day to day and what their experience and credentials are to the project,” says Higman. “If you have a bunch of folks with a business or finance background, but they’ve never worked in a hospital or healthcare entity, then you can run into a lot of issues.”
Hospitals also need to clearly define their goals as an organization and what they’re looking to get out of the engagement. “Consultants provide a lot of expertise and assistance, but they still need direction. At the end of the day, we’re a third party, we can’t make the decision for the healthcare organization,” Higman adds.
Armstrong agrees. There are consultants who will work independently, but their decisions are going to be much more effective if they’re integrated into the organization.
Once hospitals make the decision to bring in consultants and find a good fit, they need to manage them. “You don’t want to just hand your keys over to them,” Armstrong says. “You want someone you can bring along for the ride: You know why decisions are made, you buy into those decisions, and then as you implement, you’re getting up to speed on what the solution or process or technology being implemented is. So by the end, when it’s all implemented, you own it, you know it, you’re ready to take it over.”
Hospitals need to define the relationship, with a given set of responsibilities and a timeline and, as much as possible, deliverables, and never abdicate control, says Calhoun. “No matter how smart the people are, you’re bringing people in from the outside who don’t have the context for everything that’s going on.”
Consultants can’t work in a vacuum, either. So think about what resources they’ll need — whether its personnel support or operational assistance — to get the job done.
Return on investment
When it comes to measuring return on investment, think outside the box, experts say. “Not all projects are going to have a financial return,” say Higman. “If you’re talking about strategy or mission, it doesn’t really have anything to do with how it’s going to improve your finances at the end of the day, but it’s something that, as an organization or a not-for-profit, that’s core to what you’re trying to provide to the community.”
Other issues, like quality outcomes, are more about cost avoidance, not cost savings, he adds.
When hospitals brought in experts to help them build EHRs, there was no obvious ROI, but it built a foundation for a lot of ROI-type issues that would be built on that, Armstrong says. “Once you’ve got the EHR in place, you look at your revenue cycle, you look at population health, you look at outcomes … I think that’s where we’re really starting to see ROI coming in.”