Determining the Process
Once an organization has identified its cost reconfiguration opportunities, it must put into place a process to ensure that those opportunities are realized and, once realized, maintained.
Who should be involved?
The overall process needs to be sponsored by the CEO. Within this overall framework, specific elements can be sponsored by a designated team, or by selected business unit leaders. The boards of health systems, networks, and other participants need to be kept informed, as do selected physician and staff forums.
Communication about the process has to occur frequently in order to avoid rumors and unneeded concerns.
Many parties can contribute useful ideas and options, including:
- Organizations that publish comparison metrics that suggest opportunities based on similar processes at other organizations
- Staff and physicians who work within the organization and see opportunities
- Consultants who have assisted other organizations with similar issues and processes
The best advice is to use input from all of the above.
Should we use outside consultants?
Most organizations use outside consultants, at a minimum, as one source of metrics for setting cost reduction targets. Consulting sources include:
- Lean or other process consultant experts
- Consultants that specialize in cost reduction strategies for health systems. Many of these consultants work across the different parts of a health system, sometimes using different approaches on different issues and elements
- Actuaries, especially to assist in the transition from volume to value-based contracting
If so, what role should outside consultants play?
Consultants can play a wide spectrum of potential roles, ranging from:
- Embedded consultant teams that work closely with internal teams for a significant period of time (some of whom are reimbursed as a percentage of savings)
- Consultants whose role is primarily in designing the process, with consulting assistance limited to setting cost targets and suggesting possible avenues of approach
- Regardless of whether an organization uses outside consultants, senior leadership has to “own the process” (it cannot be “the consultant’s decisions”)
- Physician leaders play a key role in convincing their peers of the validity of the process
- A portfolio of cost-changing initiatives, including many with relatively small impacts, can allow several initiatives to occur at different parts of the system at the same time
- Consider using a broad-based team from multiple levels and elements of the organization to provide overall coordination and guidance
- Communicate plans early and update on progress often
- Remember that optimization of costs is a continuous process; ensure processes are in place to maintain cost savings once they have been achieved