How to Get the Most Out of Your Next Healthcare Consulting Engagement, Part I

The past several decades saw enormous growth in management consulting services supporting the healthcare industry to develop strategies, manage change and address a myriad of industry-specific complex problems. So how do provider organizations ensure they gain the greatest benefit from engaging a management consultant? This three-part blog series will explore what can be done in advance of a consulting engagement, during the project itself, and in the implementation period following the consultation to ensure success.

Understanding When to Use a Consultant

Healthcare practices use the services of a consultant for many different reasons, most often it is a need for subject matter expertise combined with a neutral outside party to play a coordinating or facilitative role. Practice leaders who have established a trusting relationship with an outside advisor recognize a consultant may also be positioned to facilitate a difficult conversation, bring objectivity and best practice experience, or provide bench strength and depth to support a team in a difficult negotiation. No matter the topic at hand, the role of a trusted advisor is to support leadership in executing complex and difficult decisions, providing a counter-point perspective when needed, all in service of achieving organization objectives. 

Scope

Much of the work of a successful consulting engagement relates to how effectively the client seeking help is able to articulate the exact needs and external expertise they require. A common pitfall which has led many a project astray is a lack of clarity on what objectives are to be achieved, with either too broad or too narrow a scope being communicated to the consultants.  

Leaders should ask themselves what specific knowledge, prior experience or expertise they require from an outside resource and frame their request as intently and specifically as possible. This will help those evaluating proposals to weed out responses which aren’t a good match for the project. In considering a proposal from an external consultant to undertake the project work, alignment around the problem to be solved and whether the consultant has clearly reflected that understanding in their approach is crucial.

Governance

Some projects are narrow in scope and need only a few key constituents to work directly with the consultants to run the project and oversee the implementation of the recommendations. Frequently, consultants and external advisors are brought in to address larger, more political or challenging issues which will require an effective governance model before, during and after the project.  Consider the difference between a project to integrate virtual visits into a practice schedule, versus a project to align provider compensation with a shift to value-based care reimbursement.  The complexity of the issue at hand, the number of individuals and departments impacted by the potential changes and the political sensitivity of the matter require a very different approach to governance for the project. In the first circumstance, the practice manager, care team representatives and executive director may be the participants needed to ensure a well-informed assessment of the issues, evaluate possible solutions and work with the consultants to implement a solution for virtual visit appointments. In the compensation model project, it may be important to have both clinical and administrative sponsors, establish a representative council or steering committee to work with the consultants, to lay out a project plan which accounts for iterative recommendations and peer review, or to set up an advisory council who provide guidance and input, recognizing a decision-making process which culminates in board of directors or owner approval is required. 

These are matters of governance and are an important area for the organization to decide upon up front. Governance decisions have long-term implications for the success of any engagement, whether front line staff buy-in to the changes, whether key constituents felt their voices were heard and whether recommended changes will stick over time.

Budget

Organizations retaining the services of an outside consultant recognize the value of bringing in new expertise, and in this budget-constrained environment will want to achieve their goals in the most cost-effective manner possible. A primary consideration therefore lies with establishing a realistic and appropriate budget to accomplish the work. Time and material budgets are still used today for fairly simple engagements that have a narrow scope along with a defined start and stop.  In an effort to prevent cost-overruns and unexpected shock invoices, many organizations seek a fixed-price for the entire scope of work.  

Ultimately, the budget model for the project should never be more complex than the problem being solved, so unless the organization is entering into a long-term arrangement or retaining a consultant for multiple projects over a defined period of time, a fixed price approach may be the easiest to administer and be most predictable.

Deliverables

Knowing upfront what form the output of the consultation will take can also be central to success. Will there be a final report, will the consultant present to our board and facilitate a decision? Do we need our consultant to help align our strategic thinking, lay out a workplan of initiatives and help us develop the team to undertake the work? Project sponsors will want to put specific thought into what form(s) they need the output from the consultation to take.  Adding the need for a final board report at the last minute of an engagement is likely to incur extra cost if it is not understood that will be a requirement at the outset. Experienced consultants should be able to recommend output which will match the scope of work if it is understood correctly.

The elements above are just a few of the key matters management and leadership should put their minds to in advance of engaging a consultant for a project.  In our next posts on this topic, we will address factors which influence the success of an active project supported by a consultant and how organizations can ensure success after the engagement is concluded.