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March 2015

Enlist Consultants Wisely
By Kathleen LePar, RN, MBA
For The Record
Vol. 27 No. 3 P. 6

Traditionally, most health care executives have used management consulting services for quick, temporary projects such as staff augmentation or IT solutions. But experienced management consultants also can be a valuable resource to develop a strategic approach to support the shift to value-based reimbursement, which involves unifying multiple initiatives to create new benchmarks and business models to improve patient outcomes at an affordable cost.

Population health management, business intelligence (BI) and analytics, ICD-10, system optimization, IT projects, and revenue cycle enhancements have been identified as the top strategic priorities for health care organizations in 2015. Many organizations are emphasizing initiatives that enhance EMR integration, improve revenue cycle management, and take advantage of BI to boost performance improvement programs and population health management. To be successful, it is recommended health care organizations adopt the following approaches to take full advantage of consulting services.

• To cost-effectively fill organizational gaps, provide an overall strategy as opposed to specialized niche services. Although an October 2013 Harvard Business Review article suggests more health care organizations are using outsourced services to meet a specific need, quick fixes often examine only one part of the solution. Workflow, processes, and staffing are often overlooked. For example, many organizations initially approached ICD-10 as a coding compliance issue. However, ICD-10 touches virtually every system and process, which results in tremendous financial, clinical, and legal implications. By not recognizing an initiative's other aspects, quick fixes frequently accomplish little and become time-consuming.

Health care consulting firms that can develop strategies, address operational improvements, and perform system optimizations provide the greatest benefit. By virtue of experience gained during engagements with multiple clients on a given issue, consulting firms can bring a wealth of insights and identify best practices that can be applied across organizations. Priorities such as meaningful use (MU), population health management, and BI require understanding the big picture to cost-effectively unify multiple initiatives, eliminate organizational silos, and foster collaboration.

• Support effective use of BI to inform decision making and accelerate outcomes. C-suite executives' information needs are changing; this will affect how they approach their roles. For example, in a value-based environment, CFOs will require additional information to analyze clinical outcome data to effectively manage financial and operational performance. Historically, revenue and key performance indicators were driven primarily by provider productivity, which was a result of an easily defined direct relationship between patient volume and reimbursement. Now, CFOs will need to focus on quality of care and patient outcomes that will impact the bottom line. Metrics, benchmarks, and reporting measures will need to be established, managed, and interpreted.

As organizations move toward managing population health and complying with MU attestation, leadership will be counted on to develop, direct, and drive BI infrastructure, including BI competency centers, which are becoming increasingly necessary to drive successful initiatives. In addition, CIOs must ensure essential systems are in place to provide prospective data that can be visually enhanced on easily accessible dashboards to enable leadership to make informed decisions that drive performance improvements and enhance patient outcomes.

• Emphasize infrastructure creation instead of meeting minimum regulatory thresholds to create sustainable change. Federal and state initiatives such as the Medicare EHR Incentive Program, the Delivery System Reform Incentive Payment Program, and the Medicare Shared Savings Program have provided funding to support health care system changes. Organizations should invest in building the internal processes and IT infrastructure needed to sustain an enduring transformation. Facilities are using the EHR Incentive Program as a way to gain fast funding and align their resources to meet the minimum requirements of MU stage 1. As a result, some have had difficulty achieving stage 2. In other cases, organizations have used the program as a motivator to accelerate implementation of their long-term strategic plan.

Since government funding will eventually run out, visionary organizations are investing in infrastructure to support long-term growth initiatives. Although challenging to implement, BI and analytics platforms that explore, analyze, and interpret data can lead to improved performance and outcomes. Management consultants specialize in developing data governance, data quality improvement, change management, and other processes that are needed to operate, grow, and optimize analytical platforms.

In addition, external experts can create a project management office capable of driving the development of a population health management care coordination strategy or establishing payment risk assessment capabilities. These strategies and process enhancements drive data to support actionable improvements.

• Prepare to manage customer growth during unprecedented consolidation. According to a Wall Street Journal article, as of May 2014, health care organizations represent about $125 billion or 20% of all proposed or active US corporate mergers and acquisitions. This consolidation will result in increased specialization and support the creation of centers of excellence. Simultaneously, the Affordable Care Act has resulted in millions of new customers for health insurers. The influx of patients will affect the operations of almost every health care organization's clinical and financial systems. Protecting the revenue stream during mergers and acquisitions, developing an IT strategy to manage legacy systems, and shaping a future plan to manage the increase in patients can benefit from additional expertise and support.

• Shape patient engagement strategies based on other industry models. By examining physician ratings, patient satisfaction scores, and hospital reviews, patients are evaluating data to help make health care choices. According to the Forrester Research report "Predictions 2015: Healthcare Retail Goes Live," "Whether it's online enrollment, health care personal financial tools, or improved engagement and care coordination, retail customer journeys will begin moving beyond experimentation to digital delivery products and services for mass adoption." Wearable technology, Apple's HealthKit, and patient portals have the potential to integrate with EMRs, which will enable patients to schedule appointments, view lab results, access care plans, pay bills, and track their health.

Because patient satisfaction scores will be linked to reimbursement, health care organizations must increase their emphasis on improving the consumer experience. But meeting such goals requires more than customer service skills. Similar to shopping at Amazon, patients are looking for convenience, efficiency, efficacy, and affordability. By applying strategies used in retail environments, health care organizations can help improve the patient experience.

• To address multiple initiatives, choose well-rounded management consulting firms. To create sustainable systems that can cost-effectively achieve improved health outcomes, consider partnering with experts who have experience working with many organization types. Often, selecting the best partner involves understanding the right mix of specialized skills and experience needed to make a project successful.

— Kathleen LePar, RN, MBA, is vice president of strategic advisory services at Beacon Partners.