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Wednesday, February 21, 2024
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Hidden-Value of Healthcare Consultants: Using Third-Party Subject Matter Advisors to Innovate and Validate Decisions and Processes

By Brian Meshkin, Managing Partner, Profound Ventures

Healthcare consultants provide advisory services to healthcare providers, such as hospitals, physicians, and laboratories, as well as payers like insurance companies and product companies such as pharmaceutical and medical device clients.  These advisory services can include strategic planning, financial operations, human resources, information technology, operations, and supply chain management. Healthcare consultants can help make recommendations to reduce costs, increase efficiency, and more. Beyond these typical potential benefits, I would suggest that the truly hidden value of healthcare consultants is having third-party subject matter advisors to innovate and validate decisions and processes.

Strategic management consulting incorporates almost 60% of consulting services delivered to healthcare clients. These advisory services include providing expertise and guidance concerning the organization’s strategic direction. These services may include advice related to mergers or acquisitions, raising capital, facilities planning, as well as governance and compliance procedures. Governance and compliance procedure consulting has grown dramatically due to increasing legislative and regulatory measures by governments that increase risk and administrative burdens. The remaining 40% of healthcare consulting services involve financial management and operations, human resources, and information technology.

In each of these categories, using third party subject matter advisors can support innovation and validation of decisions and processes.

Innovation

The reality of leading and managing a business involves a “nose to the grindstone” focus on the tactical implementation of plans, processes, and people.  When we are focused on what is in immediately in front of us, it is sometimes hard to look up and see farther into the future.  As such, a subject matter consultant advisor can help assess and plan for the future.  This difference in perspective allows for innovative thinking.

This type of innovative thinking can help identify opportunities, blunt threats, enhance strengths and overcome weaknesses.  Healthcare consultants can help clients think through changing market dynamics and customer expectations, develop commercial and clinical plans, develop site plans and financing measures for facilities planning, develop health economic analyses to support reimbursement, or help think through strategic planning of growth through mergers, acquisitions, or investment.  The mere difference in perspective and the inclusion of a team with outside experience provides value in driving innovation.

However, not all consultants or consulting firms are equal. At the end of the day, everyone has good ideas and can create a power point presentation.  The key to success is implementation, and so finding healthcare consultants with actual industry experience implementing germane initiatives who understand the details of implementation of an organizations specific needs are critical. With consultants who know how to both “talk” and “walk” their recommendations, those healthcare consultants can work with clients to support the implementation of critical innovations. This is one hidden value of healthcare consultants because organizations cannot possibly possess all the wisdom and experience needed to innovate successfully. Those innovations likely involve doing things differently, and thus those people within existing organizations may lack the perspective – and even potentially lack the experience – to develop and implement those innovations.

Validation

In the high-risk industry of healthcare with its often extensive, frequently changing, and sometime nebulous sets of rules, regulations, and compliance oversight, the value of using healthcare consultants can support the validation of those measures intended to reduce risk. Healthcare and life science companies face tremendous regulatory and legal risks.  Whether it is federal or state regulatory bodies, various levels of legislative and judicial rules, federal health programs, and more and more punitive government actions, the “guilty until proven innocent” bias that now permeates the healthcare industry raises the need to find “third party” subject matter experts to appropriately review, audit, and help construct the processes, documentation, training, and evaluation of all areas where there is risk.

Here are several examples.

  • A healthcare provider such as a hospital or physician group would want to use a third-party subject matter expert in medical billing to assist them in reviewing and creating revenue cycle management processes and operations.
  • A company that holds patient data would want to use a third-party subject matter expert in various privacy laws to assist them in reviewing and creating patient privacy processes, documentation, and quality controls.
  • An organization that is developing a clinical trial or medical education program that involves compensating clinicians who are reimbursed by a federal health program would want to seek the advice of legal counsel to ensure that those processes adhere to the appropriate safe harbors and regulatory framework, and likely contract with a third-party valuation firm to assess fair market value for that compensation to providers.
  • A manufacturer of a new product requiring regulatory clearance would want to use a third-party subject matter expert in the specific type of clearance and product to help them develop the documentation, product or service, clinical development plan, and possibly even participate in the dialogue with the regulatory bodies.

At the end of the day, if there is ever a question raised or accusation levied against an organization or individual decision-maker, the “accused” would need to rely upon more than their own internal decision-making to support the processes and/or operations in question.  Unfortunately, we now live in a world where misinformation is created and spread rapidly, the media does not check its facts or sources as it looks for sensational stories, and the government’s lack of discretion and unlimited resources present a huge risk across many areas of healthcare.  When it is commonly accepted than any federal prosecutor “can indict a ham sandwich if they want to” and at the same time, over 90% of those accused ultimately pay a fine or go to jail, the “bar” of the accusers and those who can cause an organization harm is very low.  As such, it is critical for healthcare and life science organizations to use third-party subject matter advisors to provide validation of the processes, decision-making, and operations of those areas where the risk is greatest.

In conclusion, the hidden value of healthcare consultants is the innovation and validation they can help bring through their external perspective to those areas of the business where the risk is highest – whether that risk is financial, competitive, clinical, regulatory, reimbursement, or compliance.  To not only survive but to thrive in an ever-growing healthcare industry that is under increasing oversight, the critical role of healthcare consulting will continue to grow.  While consulting as a budget category can sometimes be seen as a “nice to have” or “extra expense”, it has been my experience that having very good external subject matter advisors across key areas of risk is necessary to achieve successful levels of innovation and validation.

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