What should consumerism mean for our members’ long-term plans? And how can health care leaders turn best practices into action? For an on-the-ground perspective, Aly Seidel sat down with Zac Stillerman, COO of Advisory Board Consulting—which Modern Healthcare just named No. 2 on its list of largest health care consulting firms in the country.
Q: As head of Advisory Board Consulting, you and your team have worked directly with 340 health care organizations over the past year. What industry pressures are you seeing most acutely?
Stillerman: The health care world has been delving into the great unknown at astonishing speed. Things are no longer changing every decade, but every two years.
And there are so many new questions that providers need to be thinking about: Should we be partnering with pharmacies and other retail avenues? How do we think about engaging with customers? What's the right way to think about pricing? Should we change how we advertise services?
Even five years ago, that stuff wasn't on the radar screen. Part of our strategy practice is to figure out how particular health systems should place their bets and helping providers think about the trade-offs they need to make to position themselves for the future.
Q: What does it mean to start diving into the 'great unknown' you mentioned, given all the uncertainty?
Stillerman: There are a lot of changes to health care coming down the pipeline that will put either direct or indirect pressure on providers, and require them to do things they've never really done before.
Take alternative payment programs, which affect providers directly. Historically, it's been difficult for health systems to access data on performance outside of their walls. If you didn't own your post-acute network, then you didn't have any idea how a patient would perform in that network, from a clinical and from a financial perspective.
Unfortunately, that can't be the norm anymore. With mandatory bundles in joint and cardiac procedures, health systems need to think differently about care coordination and successes. Since you're now responsible for the total cost of care of a patient, or an episode of care, you need to know information about the post-acute stay. We've worked to provide hospitals and health systems with data about likely costs and likely outcomes for care outside their walls—care that they are now responsible for.
For instance, my team worked with a five-hospital system to utilize data on physician performance, referral management, and care management to create a value-driven network and expand risk-based contracts. And in the very first year, that data-driven approach led to a 12 percent reduction in cost of care among the target, high-risk population.
Q. What are some of those indirect pressures?
Stillerman: Consumerism is a great example. Patients are becoming more and more responsible for the overall health care dollar, so hospitals and health systems need to get more sophisticated about the way they work with patients when it comes to payment. Gone are the days when most patients had a very small co-pay. Now, the majority of individuals have thousand-dollar deductibles, and not all of them have the ability to pay it all out-of-pocket right away. How providers think about the financing conversation and how they work with patients when it comes to paying bills is a lot more important now than it was in the past.
That means hospitals and health systems need to be thinking even more about how they attract and serve customers. And they also need a long-term plan that accounts for the services they want to offer in the future, what the different demographics in their area will look like, and what type of services may be needed two, five, 10 years down the line that aren't in need now.
Hospitals also need to rethink the basic ways they interact with patients when they come to access services. As consumers have more and more choices, they are going to be more and more willing to seek out care at the place they feel most comfortable, where they feel most honored, where they feel most taken care of. Many hospitals and health systems have opportunities to improve their standing on those key factors.
Q. How do you see yourself and Advisory Board fitting into all of this?
Stillerman: Advisory Board Consulting is special because we base our work on best practices. We don't attempt to tackle every consulting engagement we could possibly do: We want to do consulting work where we feel like our research and technology have proven there is a right way of doing things.
As health care changes rapidly, it can be tempting to create consulting around the issue du jour. In consulting, when you do a great job for members, they want you to do more; sometimes they ask you to do things you really don't know that much about. And it takes a lot of discipline to say, 'Hey, we're not the best for that.'
But I think having that mindset allows us to serve our members better. We know who we are, and we know we want to grow and serve them more, but we also know who we aren't. We don't want to be a jack-of-all-trades consulting firm. When we operate on best practices, we can extend our support to help health systems and providers do things the right way, and really transform the way they operate.
Three reasons a health system doesn't need a consultant
Q. So what's the next step for health care leaders who are facing acute challenges and want consulting guidance?
Stillerman: To learn more, fill out our short form at advisory.com/consulting, and I'll make sure the right person gets back to you quickly.
I'd also recommend reading our white paper, "How to Select the Right Consulting Partner," which includes a checklist and questionnaire for health care leaders who are considering hiring outside help.
DOWNLOAD THE WHITE PAPER
Next in the Daily Briefing
Hospital groups urge CMS to slow down on payment reform