Dion Sheidy, a partner in KPMG’s Healthcare Advisory practice, discusses healthcare’s changing landscape and how having the right advisor can help organizations navigate challenges and opportunities.

Tell us a little bit about your organization.

Dion Sheidy, KPMGKPMG LLP (KPMG) is a professional services firm and part of what is known as the "Big Four." We offer a broad array of services to our clients through our Audit, Tax, and Advisory practices. Healthcare is a key focus for us. With more than 1,700 healthcare and life sciences professionals, we serve about half of the 200 largest health systems and academic medical centers in the country, as well as many of the top 25 health insurers. We work with many state governments related to their activities with the exchanges. And we serve all of the top 20 life sciences companies.

What are some of the biggest issues you see affecting hospitals and health systems these days?

Several key trends are dramatically affecting healthcare providers. First, there is the evolution of payment from a fee-for-service model to one based on value, which may or may not include risk considerations. Organizations are struggling with developing the competencies and accessing the resources needed for appropriate readiness in this era of changing incentives. Business strategies should serve current needs, of course, which means continuing to operate under the traditional fee-for-service model. However, at the same time, organizations need to start to accommodate the inevitable shift to payments based on value—all while keeping an eye on containing costs and demonstrating quality. For example, organizations are improving efforts related to chronic disease management and wellness/disease prevention programs. In addition, they are learning to measure performance in new ways, focusing on outcomes at the population level.

The second trend impacting operations is the increase in consumerism. Healthcare is purchased much differently today than it was even 10 years ago. Traditionally, when you asked hospital executives about customer needs, they would focus on how they could serve physicians. That’s not the case anymore. Physicians are still a key part of the delivery model, but they are not the sole decision makers. Patients play a growing role, choosing among care providers based on an organization’s ability to deliver high quality and convenience at affordable prices. Health savings accounts and high-deductible plans are driving patients to assume greater financial responsibility for their care and to carefully consider how transparent organizations are about the relationship between quality and costs.

Finally, the third trend we see is that provider organizations are intent on optimizing the enterprise healthcare IT systems they’ve implemented to meet compliance requirements, such as Meaningful Use and ICD-10 conversion. Hospitals and provider organizations want to capitalize on these core and disruptive technology investments in order to gain operational efficiencies, create innovative new revenue streams, and positively impact population health management.

How does KPMG help address these needs?

As an organization, we’ve aligned our product and service offerings to help organizations meet current needs as well as prepare for the future. We offer more traditional advisory services related to helping organizations identify opportunities for revenue growth and revenue cycle optimization, cost management, regulatory compliance, and transactional assessments. But we take that a step further and also focus on ways to position healthcare providers for opportunities ahead and help them answer fundamental questions, such as: What does business in this next era of healthcare look like, and how will this new business model impact performance strategies and use of assets?

To help with the transition from volume to value, we are working with healthcare providers to examine demand, capacity, and service line profitability for the coming years. We also are helping them gain competencies in working with payment mechanisms that are different from fee-for-service and exploring how they can participate in ACOs, partnerships, and other arrangements with appropriate levels of shared risk.

An important aspect of this transition is analyzing the potential value of strategic relationships. We assess opportunities for physician integration and examine an organization’s physician acquisition strategy and role with health plans. Such relationships are particularly important as continuity of care bridges across facilities and government incentives related to population health management continue to grow.

In response to greater consumerism in the industry, we are working with healthcare providers to identify how to better monitor and report on quality measures. KPMG provides assistance across the board, from the process of selecting performance metrics to assessing clinicians’ ability to capture details of the patient encounter to performing experience mapping. Our work in data analytics is assisting healthcare providers in understanding the relationship between process change and quality outcomes, examining total costs of care, and reducing hospital admissions and lengths-of-stay to help cost-optimize the system.

When it comes to helping organizations derive greater value from their healthcare IT investments, KPMG is well positioned to provide services along the entire business spectrum from strategy through execution. Following previous technology investments over the past several years, KPMG recently announced its acquisition of healthcare consulting firm Beacon Partners, a top-ranked management consulting firm providing clinical, financial, and operational improvements to health systems nationwide.

KPMG can assist healthcare organizations with implementing the strategies, operational enhancements, enablement of technologies, security, and analytics required to be successful in a new, converged healthcare ecosystem. The acquisition of Beacon Partners, coupled with KPMG’s existing capabilities, provides clients with access to an integrated healthcare transformation service provider.

What are some key considerations for healthcare leaders when choosing a partner in such efforts?

Strategic alignment is important. I think it’s valuable to seek an advisor who can provide holistic approaches, deep industry insights, and next-generation data intelligence. Progress can’t exist in silos; taking into account long-standing business models, processes, and technologies while setting the stage for further developments in the future is imperative. This must be balanced with a changing regulatory environment. And finally, although the healthcare industry has a wealth of internal and industry data, it is critical for this data to be mined using advanced analytics tools to achieve actionable insights that help organizations improve outcomes and elevate quality measures.

Cultural fit is also key. Choosing an advisor is as much about the relationship as it is about the services being offered. Select people you want to work with. At the end of the day, you want to team with people with whom you’re in lock step, who share a vision of where you’re going, and who inspire confidence in their ability to deliver.

Are there any educational materials you would like to share to help healthcare providers in these efforts?

Visit our website for the following white papers: 

  • Revenue cycle 3.0: Harnessing the power of process analytics and automated workflow
  • Seeing beyond the numbers: Improving revenue cycle results through data visualization
  • Bigger data, better outcomes: Healthcare providers can improve operational decision making
  • The Big Data dividend: Enhancing provider revenues in an era of change
  • What works: Creating value-based healthcare organizations
  • What works: Creating new value with patients, caregivers and communities
KPMG© 2015 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity.

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Publication Date: Monday, June 01, 2015