Feature Article

April 27, 2015 | Healthcare Consultants Forum Newsletter

Consultant Perspectives

Two Forum members share insights on top consulting issues they currently face and the associated challenges of bringing forward-thinking solutions to their clients in the age of health reform.

Author:

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Robin W. Singleton, FACHE
Executive Vice President
DHR International
Marietta, Ga.

Participants:
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Douglas T. Cardinal, FACHE
National Practice Leader, Physician Enterprise
Aon Hewitt
Atlanta

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Lisa T. Williams
President
Lisa Williams & Associates, LLC
Seattle

RS: What do you hear from your clients on their top five pressing issues?

DC: The general focus of my practice is physician enterprise consulting and more than 90 percent of my clients are hospitals and health systems. Consequently, most of the issues I hear about reflect specifically on issues related to the hospital-physician interface. Specifically, I tend to hear about:

  • Physician compensation issues—how to address physician compensation and incentives in this rapidly changing healthcare delivery and reimbursement environment.
  • Compliance issues surrounding how and how much physicians are paid.
  • The governance of physician groups affiliated with hospitals and health systems.
  • Physician leadership development.

LW: For me, they are:

  • Adjusting to the “retailization” of healthcare in an efficient yet successful manner (considering all angles of the market—insurance, provider and patient markets)
  • Retaining and engaging staff and physicians in a time when the organization must be nimble enough to effectively respond to the rapidly changing market(s)
  • Working with physician and executive leaders to learn how to balance and accommodate the growing patient requirement of quick, easy access with quality standards and goals
  • Being able to effectively forecast how the Affordable Care Act will likely continue to impact our healthcare environment
  • Determining how to establish a solid organizational growth strategy when the future of healthcare is so uncertain

RS: How often do you have a conversation with your clients and/or potential target clients surrounding these issues and how do you frame the ongoing dialogue?

DC: Virtually every time I interact with a client, one or more of the above issues is brought up. In general, I try to allow them to frame the dialogue by actively listening to what they are saying and sometimes, more importantly, on what they aren't saying. More often than not, the client will tee up the project themselves. At that point, the initial conversation evolves into the first project meeting as opportunities and options present themselves, and a preliminary approach is outlined. Needless to say, this strategy will only work if the client has a comfort level with me and the work we do.

For new clients or prospective clients, doing homework on their organization will highlight areas where they might benefit from our services. Then as I introduce myself and my organization, I emphasize those areas where my research has shown that there might be some common opportunities.

LW: This conversation is ever present and is usually the basis for deeper organizational strategy discussions. My consultation with clients is primarily around developing a strategy that will help transform the organization into one that will evolve and adjust to the changing market. This includes areas such as: strategic planning, strategy deployment, and executive and physician coaching. The dialogue is typically framed and designed to be an ongoing discussion. This is referred to as a master planning approach where we agree on the ideal state for the organization then create the master plan for the next three to five years. We review this plan at least quarterly and make adjustments based on changes in the healthcare environment and agree on the environmental triggers that would cause the organization to adjust their strategy. The framework allows the organization to stay focused yet adapt fairly quickly.

RS: Which of these issues do you find yourself spending the most time addressing in meaningful work projects?

DC: Unfortunately, the most repeated issue for many of my clients is the compliance issue. I say unfortunately because looking at compensation models and how much a physician is being paid is, in reality, a commodity. The client needs a letter stating that we think what the physician is being paid and how their pay is calculated are reasonable and of fair market value. Once written and presented to the appropriate committee, any questions raised can (although not always) take up a fair amount of time.

The most meaningful work we do generally involves designing or modifying the structure of a physician compensation plan to help address operational issues that are present. Many times these issues crop up because the patient demographics in the area have changed or the method of reimbursement has begun to shift, making the old compensation plan and its incentives inadequate to address the evolving environment. This is where we can provide a very real value to the client.

LW: Most of my time is spent working with organizational leaders to operationalize the master planning approach I previously mentioned. It takes a strong commitment at the highest organizational level. There is a lot of executive coaching that goes into supporting this type of approach. However, the result is an organization better equipped to adjust quickly and successfully.

RS: What are the challenges you face in staying current and how do you bring the current thinking to your clients?

DC: Staying current with the very rapidly evolving landscape that surrounds healthcare reimbursement and physician reimbursement is virtually a full-time job. Now, when you add in changing interpretations of regulations, the playing field gets really crowded. The best way I've found to keep current is to make it a habit to follow breaking stories in the healthcare trade press, then go to the source documents that are generally cited in the articles to look behind the scenes for specific issues that will need to be addressed. Talking to colleagues with expertise in other industries can often turn up alternative solutions that are applicable to healthcare. Also, I make it a point to attend one to two national conferences each year. In addition to networking and connecting with old friends and colleagues, many of the speakers have perspectives that can be adapted to the specific area of physician-hospital consulting.

LW: There are often varying interpretations of healthcare reform. This presents a great challenge not only in clarifying my own understanding but also in how best to consult with clients. Some organizations want to follow the lead of others in their local markets. It can be challenging to stay current on local competitors in addition to the client with whom I am working.

Our team works hard to stay current through:

  • Partnering with other consulting firms (primarily for the purpose of knowledge/information sharing in the spirit of truly trying to help our healthcare environment)
  • Attending conferences, webinars, healthcare forums, etc.
  • Reading as much current literature as possible
  • Most importantly, partnering with our clients to understand how they are staying current

RS: What changes stemming from healthcare reform are most likely to impact your work with clients?

DC: Fundamentally, healthcare reform (as we are currently seeing it) is an organizational and reimbursement mechanism that, as it evolves from fee-for-service reimbursement, will alter the way hospitals and physicians deliver care. Many of the foundational tenets of healthcare reform, such as population-based reimbursement and pay for quality outcomes, are fundamentally similar to some of the programs that were being touted in the first incarnation of managed care in the 1990s.

The challenge of materially changing the way we think about delivering healthcare will focus on the changes associated with an episode of care that is no longer a revenue generator but a cost generator. When reform is fully implemented, we will look to maintain the patient's level of health and function for as long as possible. Ultimately, this goal will be driven by the reimbursement system. Most forward-looking healthcare organizations are already embracing this concept and seriously thinking about how to make and survive the transition from where we are to where we are going. Assisting organizations through this transition is the most rewarding part of my job.

LW: I think about the individualization of the insurance industry with respect to:

  • Proliferation of products and the number of patients in public insurance exchanges
  • Substantial growth in the number of Medicaid beneficiaries
  • Growth in Medicare Advantage enrollment
  • Employers moving toward private insurance exchange markets

Consumers are encouraged to shop around for their healthcare. Some large employers, such as Boeing, are contracting directly with ACOs. Other large organizations are following suit.